M/s Bhagyasai Constructions, Visakhapatnam V. The ACIT, Circle-3(1), Visakhapatnam

ITA 190/VIZ/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50325 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH L PETER
• Assessee Lawyers: K K VISWESWARA RAO
• Keywords: Prejudicial to interest; Revised return
• Section: 143(3); 263

Judgement Text

ITA NO.190/VIZAG/2011 BHAGYASAI CONSTNS., VSKP PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.190/VIZAG/2011 ASSESSMENT YEAR: 2006-07 M/S. BHAGYASAI CONSTRUCTIONS VISAKHAPATNAM ACIT CIRCLE-3(1) VISAKHAPATNAM (APPELLANT) PAN NO: AADFB 8017H VS. (RESPONDENT) APPELLANT BY: SHRI K.K. VISWESWARA RAO, ADVOCATE RESPONDENT BY: SHRI TH.L. PETER, CIT(DR) ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 23.2.2011 PASSED BY LEARNED CIT-I, VISAKHAPATNAM UN DER SECTION 263 OF THE ACT AND IT RELATES TO THE ASSESSMENT YEAR 2006- 07. THE ASSESSEE IS ASSAILING THE DECISION OF LEARNED CIT IN INVOKING T HE REVISION PROCEEDING UNDER SECTION 263 OF THE ACT. 2. THE FACTS RELATING TO THE CASE ARE STATED IN BR IEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF APARTMEN TS. THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED UNDER SE CTION 143(3) OF THE ACT BY DETERMINING THE TOTAL INCOME AT RS.18,21,130/-. THE LEARNED CIT NOTICED THAT THE ASSESSEE HAD FILED ITS RETURN OF I NCOME ORIGINALLY ON 31.10.2006 DECLARING TAXABLE INCOME OF RS.23,98,680 /-. LATER THE ASSESSEE FILED A REVISED RETURN ALONG WITH A REVISED COMPUTA TION OF INCOME DECLARING A TOTAL INCOME OF RS.11,64,390/-. THE SAID REVISED RETURN WAS FILED ON 14.11.2008, I.E. BEYOND THE TIME PERMISSIBLE FOR FI LING THE REVISED RETURN. THE ASSESSING OFFICER ACCEPTED THE REVISED RETURN A ND COMPLETED THE ITA NO.190/VIZAG/2011 BHAGYASAI CONSTNS., VSKP PAGE 2 OF 3 ASSESSMENT BY MAKING SOME ADDITIONS. HENCE, THE LEA RNED CIT TOOK THE VIEW THAT THE ACTION OF THE ASSESSING OFFICER IN AC TING UPON THE REVISED RETURN WHICH HAS RESULTED IN REDUCTION OF TOTAL INC OME IS ERRONEOUS AND PREJUDICIAL TO INTERESTS OF THE REVENUE. HOWEVER, IN THE REVISION PROCEEDINGS, NONE APPEARED ON BEHALF OF THE ASSESSE E BEFORE LEARNED CIT. HENCE THE LEARNED CIT, IN AN EX-PARTE ORDER, SET AS IDE THE ASSESSMENT AND DIRECTED THE ASSESSING OFFICER TO REDO THE ASSESSME NT DE-NOVO. AGGRIEVED BY THE ORDER OF LEARNED CIT, THE ASSESSEE IS IN APP EAL BEFORE US. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD BEEN FOLLOWING PRO JECT COMPLETION METHOD FOR OFFERING INCOME. HOWEVER, DURING THE C OURSE OF ASSESSMENT PROCEEDING RELATING TO THE IMMEDIATELY PRECEDING YE AR, I.E. ASSESSMENT YEAR 2005-06, THE ASSESSING OFFICER CHOSE TO TAX THE INC OME OF THE ASSESSEE UNDER PERCENTAGE COMPLETION METHOD AND ACCORDINGL Y A PORTION OF INCOME THAT HAD BEEN OFFERED IN THE IMPUGNED ASSESSMENT YE AR 2006-07 CAME TO BE TAXED IN THE ASSESSMENT YEAR 2005-06 ITSELF. TH E SAID ACTION OF THE ASSESSING OFFICER HAS COMPELLED THE ASSESSEE TO FIL E A REVISED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 IN ORDER TO REDUCE THE PORTION OF INCOME THAT WAS TAXED IN THE ASSESSMENT YEAR 2005-0 6. ACCORDINGLY, HE SUBMITTED THAT THERE IS NO ERROR IN THE ORDER OF TH E ASSESSING OFFICER, AS THE IMPUGNED INCOME CANNOT BE SUBJECTED TO DOUBLE TAXAT ION. 4. HOWEVER, THE LEARNED D.R SUBMITTED THAT THE FACTS NARRATED BY THE LEARNED A.R ARE NOT BORNE OUT OF RECORD AND HENCE T HEY REQUIRE NECESSARY VERIFICATION. HE FURTHER SUBMITTED THAT THE ASSESS EE HAS FAILED TO APPEAR BEFORE LEARNED CIT AND HENCE THE LEARNED CIT COULD NOT HAVE BEEN APPRISED OF ALL THESE FACTS. 5. AFTER HEARING RIVAL CONTENTIONS, WE ARE OF T HE VIEW THAT THE ISSUE SHOULD BE SET ASIDE TO THE FILE OF LEARNED CIT, AS THE ASSESSEE HAS FAILED TO ITA NO.190/VIZAG/2011 BHAGYASAI CONSTNS., VSKP PAGE 3 OF 3 APPEAR BEFORE HIM. FURTHER THE FACTS NARRATED BY T HE LEARNED A.R ALSO REQUIRE NECESSARY VERIFICATION AND THE SAME MAY HAV E A BEARING ON THE DECISION OF LEARNED CIT. ACCORDINGLY, WE SET ASID E THE ORDER OF LEARNED CIT AND RESTORE THE ISSUE BACK TO HIS FILE IN ORDER TO ENABLE HIM TO ADJUDICATE THE ISSUE AFRESH AFTER CONSIDERING THE E XPLANATIONS OF THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE DETAILS AND INFORMATION THAT MAY BE CALLED FOR BY LEARNED CIT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. . PRONOUNCED IN THE OPEN COURT ON 15.7.2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 15 TH JULY, 2011. COPY TO 1 M/S. BHAGYASAI CONSTRUCTIONS, C/O MURTHY ASSOCIAT ES, CHARTERED ACCOUNTANTS, FLAT NO.102, LAKSHMI APARTMENTS, FACOR LAYOUT, WALTAIR UPLANDS, VISAKHAPATNAM-530 003 2 ACIT, CIRCLE-3(1), VISAKHAPATNAM 3 4. THE CIT VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM