ACIT, Trichy V. M/s. Southern Construction Enterprises, Trichy

ITA 2011/CHNY/2011

• Counselvise Citation: 201121714 RSA 2011
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2012
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 19-07-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 12-12-2011
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENNAI SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER .. 1. I.T.A. NO.2011/MDS/2011 ASST. YEAR : 2002-03 2. I.T.A. NO.2012/MDS/2011 ASST. YEAR : 2003-04 3. I.T.A. NO.2013/MDS/2011 ASST. YEAR : 2004-05 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE I(1), TIRUCHY. V. M/S. SOUTHERN CONSTRUCTION ENTERPRISES, NO.20, CHINNA CHETTY STREET, WORAIYUR, TIRUCHY. PAN: ABLFS8118D (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI KEB RENGARAJAN, JR. STANDING COUNSEL ASSESSEE BY : NONE DATE OF HEARING : 19 TH JULY 2012 DATE OF PRONOUNCEMENT : 19 TH JULY 2012 O R D E R PER BENCH : THESE THREE APPEALS HAVE BEEN PREFERRED BY REVENU E AGAINST THE COMMON ORDER OF THE CIT(APPEALS), TIRUCHIRAPALLI, D ATED 08.9.2011 IN ITA NOS.229,231 & 230/20010-11 FOR THE ASST. YEARS 2002 -03, 2003-04 & 2004-05 RESPECTIVELY. THE RELEVANT PROCEEDINGS ARE UNDER S EC.143(3) READ WITH SEC.147 OF THE I.T. ACT, 1962, IN SHORT THE ACT. WE FIND THAT THE GROUNDS RAISED ARE I.T.A. NO.2011-2012/MDS/11 2 IDENTICAL IN ALL APPEALS AND, THEREFORE, ITA NO.201 1/MDS/2011 IS TAKEN AS LEAD CASE FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THESE CASES HAVE BEEN CALLED TWICE FOR HEARING . A PERUSAL OF THE PAPER BOOK REVEALS THAT THE ASSESSEES, MD NAMELY S HRI K. SAMPATH (MANAGING PARTNER) HAS BEEN SERVED NOTICE ON 06.6.2012 THROUG H DR. THE REPORT DULY STAMPED/SIGNED BY SHRI K. SAMPATH IN THIS REGARD IS AVAILABLE BEFORE US. THEREFORE, WE PROCEED EX-PARTE AGAINST THE RESPONDE NT IN THE ABSENCE OF ANY REPRESENTATION. 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASS ESSEE IS A FIRM ENGAGED IN THE REAL ESTATE BUSINESS WHO FILED ITS R ETURN OF INCOME ON 07.1.2009 ADMITTING LOSS OF F.40,758/- IT HAD COME INTO EXIS TENCE ON 29.1.1997. ITS MANAGING PARTNER IS SHRI K. SAMPATH WHOSE PREMISES WAS SEARCHED IN THE SEARCH ASSESSMENT WAS COMPLETED UNDER SEC.158BC O F THE ACT AND INCOME ARISING FROM TRANSACTION RELATING TO NANGAVARAM PA NNAI LANDS WERE ASSESSED IN HIS HANDS. HE PREFERRED APPEAL IN WHICH THE CIT(AP PEALS) DIRECTED THE ASSESSING OFFICER TO ASSESSEE PROFITS FROM NANGAVARAM PANNAI LANDS IN THE HANDS OF THE ASSESSEE FIRM BY RETURNING A FINDING THAT THE SAID SALE TRANSACTIONS WERE IN FACT CARRIED ON BY THE ASSESSEE. 4. IN FURTHERANCE TO THE REMAND PROCEEDINGS, THE A SSESSING OFFICER ISSUED NOTICE TO THE ASSESSEE UNDER SEC.148 OF THE ACT ON 16.6.2009. IN RESPONSE, THE ASSESSEE EXPRESSED ITS ADHERENCE WITH THE RETURN ALREADY FILED. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UND ER SEC.143(2) OF THE ACT TO I.T.A. NO.2011-2012/MDS/11 3 DETERMINE THE INCOME ASSESSABLE WITH REFERENCE TO T HE SALE TRANSACTION OF NANGAVARAM PANNAI LANDS. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT IT HAD SOLD 7 PLOTS OF TOTAL AREA OF 25,608 SQ .FT. FOR A SUM OF F.19.47 LAKHS. THEREFORE, AFTER ADJUSTING THE COST OF PLOT, REGIST RATION CHARGES, COMMISSION AND OTHER EXPENSES IT HAD INCURRED A LOSS OF F.47,758/- . IT ALSO FILED OTHER DETAILS OF COMPENSATION PAID FOR EVICTION, PLOT ADVANCE ETC. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 23.12.2010 CONSIDERED THE IN COME FROM THE AFORESAID LOSS AT F.33,29,170/-(AT THE RATE OF F.140/- PER SQ . FT.) IN THE CASE OF THE ASSESSEE. FURTHER, REGARDING COMPENSATION PAID TO M/S. ROCKFORT GAS AGENCY ETC., THE CLAIM OF THE ASSESSEE FOR PAYMENT OF COMP ENSATION OF F.4 LAKHS WAS RESTRICTED TO RS.2 LAKHS. IN THIS MANNER, THE ASSE SSEES INCOME WAS ASSESSED AS F.15,41,412/-. 5. THE ASSESSEE PREFERRED APPEAL WHICH HAS BEEN P ARTLY ACCEPTED BY CIT(APPEALS) AFTER VERIFYING THE DETAILS FILED BY T HE ASSESSEES REPRESENTATIVE IN ITS RETURN REGARDING NANGAVARAM PANNAI LANDS WHIC H ARE REPRODUCED AS UNDER :- S.NO. NAME DATE OF SALE PLOT NO. SQ. FT. RATE PER SQ. FT. SALE CONSIDERATION 1 VINCENT A 27.04.01 9 2400 100 240000 2 SUBRAMANI V 27.04.01 37 2400 100 240000 3 SANTHANAKRISHNAN V 27.04.01 11 2130 100 213000 4 FRANSIS S 25.01.02 22 2400 100 240000 5 ARUMAIRAJ 25.01.02 19&20 3600(1200+2400) 100 36000 6 ANTONYSAMY A 15.03.02 23 2940 100 294 000 19470 1947000 I.T.A. NO.2011-2012/MDS/11 4 THE CIT(APPEALS) HAS FURTHER DIRECTED THE ASSESSING OFFICER TO EXCLUDE AREA OF 6139 SQ.FT., FOR THE CALCULATION OF SALES TURNOVER . REGARDING THE OTHER CLAIM OF PAYMENT TO M/S. ROCKFORT GAS AGENCY (SUPRA), THE AS SESSING OFFICER HAS BEEN DIRECTED TO RE-COMPUTE THE INCOME. 6. THEREFORE, THE REVENUE HAS RAISED THE GROUND B EFORE US. 7. THE DR BEFORE US HAS REITERATED THE PLEAS STATE D IN THE GROUNDS AND SUBMITTED THAT THE CIT(APPEALS) HAS ERRED IN GR ANTING RELIEF TO THE ASSESSEE WITHOUT GIVING ANY OPPORTUNITY OF HEARING TO REVENU E BEFORE CONSIDERING ASSESSEES DETAILS SUBMITTED. HENCE, HE HAS PRAYED FOR ACCEPTANCE OF THE APPEAL. 8. WE HAVE HEARD THE DR AND ALSO PERUSED THE RELEV ANT FINDINGS. IT TRANSPIRES THAT THE ASSESSING OFFICER HAD TAXED THE SALE RETURNS OF NANGAVARAM PANNAI LANDS IN ASSESSEES HANDS (SUPRA). WE FIND THAT IN APPEAL, THE CIT(APPEALS) HAS CONSIDERED THE SOME WRITTEN SUBMIS SIONS FOR THE FIRST TIME WHICH READ AS UNDER :- ON VERIFYING THE DETAILS FILED BY THE APPELLANTS AUTHORIZED REPRESENTATIVE IN HIS WRITTEN SUBMISSION FOR SALE O F LAND AT NANGAVARAM PANNAI FOR THE ASSESSMENT YEAR 2002-03 REGARDING 7 PLOTS SOLD TO SEVEN INDIVIDUAL PARTIES ALONG WITH TOTAL AREA OF LAND IN SQ. FT., WHICH INCLUDES AREA LEFT FOR ROAD AND PUBLIC PURPOSES. I.T.A. NO.2011-2012/MDS/11 5 IN OUR OPINION, THE DETAILS MENTIONED IN THE ASSESS EES WRITTEN SUBMISSIONS HEREIN ABOVE AS CONSIDERED BY CIT(APPEALS) DO NOT C LEARLY SPELL OUT AS TO HOW THE SAME WERE VERIFIED. UNDER THE PROVISIONS OF TH E ACT, THE CIT(APPEALS) HAS GOT THE JURISDICTION TO ADMIT ADDITIONAL EVIDENCE W HICH COULD NOT BE PRODUCED BEFORE THE ASSESSING AUTHORITY. BUT AT THE SAME TI ME, IT HAS TO BE UNDER CERTAIN CONDITION. ONE OF THE FOREMOST CONDITIONS IS THAT THE OTHER PARTY HAS TO BE GRANTED OPPORTUNITY OF BEING HEARD. WE NOTICE FROM THE ORDER OF CIT(APPEALS) THAT NO SUCH OPPORTUNITY HAS BEEN GIVEN. THEREFORE , WITHOUT EXPRESSING ANY OPINION ON THE MERITS OF THE CASE AND IN ORDER TO D O JUSTICE BETWEEN THE PARTIES, WE DEEM IT APPROPRIATE TO REMIT THE MATTER BACK TO ASSESSING OFFICER FOR DECISION IN ACCORDANCE WITH LAW, AFTER HEARING THE ASSESSEE WHO WOULD BE AT LIBERTY TO TAKE ALL PLEAS AND EVIDENCE, IF ANY, AVAILABLE IN SUPPORT OF ITS CLAIM. DISPOSED OF ACCORDINGLY. 9. ITA NOS.2012 & 2013/MDS/2011 : IN THESE APPEALS ALSO, THE DR HAS MADE THE SIMILA R SUBMISSION AND OUR DISCUSSION HEREIN ABOVE COVERS THESE CASES AS W ELL.. THEREFORE, WE RESTORE THESE CASES ALSO TO THE ASSESSING OFFICER WITH THE SAME DIRECTION (SUPRA). I.T.A. NO.2011-2012/MDS/11 6 10. IN THE RESULT, THE APPEALS ARE ALLOWED FOR STA TISTICAL PURPOSE. 11. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARI NG THE APPEALS ON 19 TH JULY 2012. SD/-/- SD/- ( ABRAHAM P. GEORGE ) (S.S. GODA RA) ACCOUNTANT MEMBER JUDICI AL MEMBER CHENNAI, DATED : 19 TH JULY 2012 JLS. COPY TO:- 1) ASSESSEE 2) ASSESSING OFFICER 3) CIT(APPEALS) 4) C.I.T 5) D.R. (6) GUARD FILE