Kasi Housing & Development Ltd., CHENNAI V. DCIT, CHENNAI

ITA 2043/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7985 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-02-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 06-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Presumptive income
• Section: 44AD; 143(3); 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBE R AND SHRI. G. PAVAN KUMAR, JUDICIAL MEMBER ./I.T.A. NO.2043/MDS/2015 / ASSESSMENT YEAR :2000-01 M/S. KASI HOUSING & DEVELOPMENT LTD, NO.91-92, JAWAHARLAL NEHRU SALAI, ASHOK NAGAR, CHENNAI 600 083. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(4) CHENNAI. [PAN AAACK 3559M ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE $% ! ' # /RESPONDENT BY : SHRI. A.V.SREEKANTH, IRS, JCIT. & ' ' ( /DATE OF HEARING : 02-02-2016 ) ' ' ( /DATE OF PRONOUNCEMENT : 17-02-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-8, CHENNAI IN ITA NO.79/2011- ITA NO.2043/MDS/2015. :- 2 -: 12, DATED 31.08.2015 FOR THE ASSESSMENT YEAR 2000-2 001 PASSED U/S. 143(3) AND 250 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE RAISED ONLY ONE SUBSTANTIVE GROUND IN RESPECT OF PRESUMPTIVE TAXATION AND ESTIMATION OF INCOME AT 8% INSTEAD OF 12% DETERMINED BY THE ASSESSING OFFICER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S IN THE BUSINESS OF REAL ESTATE AND FILED RETURN OF INCOME ON 30.11.2000 WITH TOTAL LOSS OF A5,06,390/- AND THE RETURN WAS PROCES SED U/S.143(1) OF THE ACT AND AS THE CASE WAS SELECTED UNDER SCRUTINY AND NOTICE WAS ISSUED. THE ASSESSING OFFICER DETERMINED INCOME U/ SEC144 OF THE ACT DATED 10.02.2003 AT A33,12,376/-. THE ASSESSING O FFICER COMPLETED ASSESSMENT IN THE ABSENCE OF ANY EVIDENCE AND ESTIM ATED 20% OF GROSS SALES AT A33,12,376/- AS ASSESSED INCOME AND RAISED THE DEMAND. AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS ) BY ORDERS IN ITA NO.218 /07-08, DATED 07.03.2008 RELIED ON THE I TAT ORDER IN ASSESSEE OWN CASE DATED 26.08.1998 FOR THE ASSESSME NT YEAR 1998-99 AND ESTIMATED THE INCOME AT 12% OF GROSS SALES. AG GRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL, AND THE TRIBUNAL IN ITA NO.1144/MDS/2008 DATED 03.03.2009 REMITTED THE MATTER BACK TO ITA NO.2043/MDS/2015. :- 3 -: THE FILE OF THE ASSESSING OFFICER. PRESENTLY, THE ASSESSING OFFICER AS PER THE DIRECTIONS OF THE ITAT POSTED THE CASE FOR HEARING. THE LD. AUTHORISED REPRESENTATIVE OF ASSESSEE FILED DETAILS EXPLAINING A1,26,17,760/- WAS INCURRED TOWARDS DIRECT EXPENDIT URE AND PRODUCED BREAK UP OF EXPENSES TO THE EXTENT OF A51,57,089/- AND FOR OTHER EXPENDITURES, COULD NOT PRODUCE BILLS. FURTHER, T HE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ACCOUNTS OF THE C OMPANY ARE AUDITED AND DUE TO SURVEY OPERATIONS, THE BOOKS OF ACCOUNTS AND OTHER RECORDS ARE IMPOUNDED BY THE INCOME TAX DEPAR TMENT. THE ASSESSING OFFICER INSPITE OF GIVING ADEQUATE OPPORT UNITY, THE ASSESSEE COULD NOT PROVIDE ANY EVIDENCE TO SUPPORT THE EXPL ANATIONS AND RELIED ON THE COMMISSIONER OF INCOME TAX (APPEALS) ORDER PERTAINING TO THE ASSESSMENT YEAR 1998-99 AND ADOPTED 12% OF GROSS SA LES AS REASONABLE ESTIMATION OF INCOME AND MADE BEST JUDGM ENT ASSESSMENT U/SEC. 144 OF THE ACT DATED 5.4.2011 ASSESSED INCOM E OF A19,87,426/- AND RAISED DEMAND. AGGRIEVED BY THE ORDER OF THE AS SESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS) 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE REITERATED HIS SUBMISSIONS MADE IN A SSESSMENT PROCEEDINGS AND THE LD. ASSESSING OFFICER RELIED ON ITAT ORDER IN ITA NO.2043/MDS/2015. :- 4 -: ASSESSEE OWN CASE FOR ASSESSMENT YEAR 1998-99 AND T HAT THE ASSESSEE IS SAME AND SAME BUSINESS IS CARRIED ON, ESTIMATED INCOME @12% OF GROSS SALES AND SUCH ESTIMATION IS ON HIGHER SIDE A ND THE ASSESSEE IS PASSING THROUGH FINANCIAL CRISIS AND DUE TO THE AD VERSE CIRCUMSTANCES NOT IN A POSITION TO PRODUCE ANY DOCUMENTARY EVIDEN CE AND PLEADED FOR REDUCTION OF ESTIMATION AT 8% AS PER THE PROVIS IONS OF SEC. 44AD OF THE ACT. BUT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE ORDER OF THE ASSESSING OFFICER. AGGRIEVED BY T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE ASSAILED AN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE THE TRIBUNAL, THE LD. AUTHORISED REPRESENTAT IVE REITERATED HIS SUBMISSIONS MADE BEFORE ASSESSING OF FICER AND COMMISSIONER OF INCOME TAX (APPEALS) AND SUBSTANTIA TED HIS GROUNDS WITH ARGUMENTS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ESTIMATION AT 12% INSPITE O F ASSESSEE DEMONSTRATED THE CIRCUMSTANCES AND REJECTION OF BOO KS OF ACCOUNTS. THE BUSINESS OF THE ASSESSEE IS PASSING THROUGH THE TOUGHEST SITUATIONS IN THE REAL ESTATE MARKET AND PLEADED FO R ESTIMATION AT 8% OF GROSS SALES INSTEAD OF 12% AS DETERMINED BY LD. ASSESSING OFFICER AND PRAYED FOR ALLOWING THE APPEAL. ITA NO.2043/MDS/2015. :- 5 -: 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND VEHEMENTLY OPPO SED TO THE GROUNDS OF THE ASSESSEE. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD AND ALSO PROVISIONS OF LAW. THE LD. AUTHORI SED REPRESENTATIVE HAS SUBSTANTIATED HIS CLAIM FOR NON - PRODUCTION O F BILLS IN ASSESSMENT PROCEEDINGS AND THE ASSESSEE IS FIGHTING SECOND RO UND OF LITIGATION WITH THE INCOME TAX DEPARTMENT WERE THE ASSESSING O FFICER HAS ESTIMATED INCOME AT 20% OF GROSS SALES DUE TO NON A VAILABILITY OF EVIDENCE. THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) FOLLOWING THE ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 1998-99 REDUCED THE ESTIMATION TO 12%. THE ASSESSE E AGGRIEVED BY THE ORDER OF CIT(A) FILED AN APPEAL WITH THE TRIBUN AL. THE TRIBUNAL IN ITA NO.1144/MDS/2008 DATED 03.03.2009 REMITTED THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OF FICER PASSED ORDER U/S.144 OF THE ACT ESTIMATING AT 12% OF GROSS SALES AND COMMISSIONER OF INCOME TAX (APPEALS) HAS ENDORSED THE FINDINGS O F THE ASSESSING OFFICER. THE LD. AUTHORISED REPRESENTATIVE HAS EXP RESSED THE GENUINE HARDSHIP OF THE COMPANY, PASSING THROUGH FINANCIAL DIFFICULTIES AND ESTIMATION AT 12% IS MUCH HIGHER AND REQUESTED FOR REDUCTION OF ITA NO.2043/MDS/2015. :- 6 -: ESTIMATION TO 8% AS PER THE PROVISIONS OF SEC.44AD. WE CONSIDERING THE APPARENT FACTS AND ALSO CIRCUMSTANCES OF ESTIMA TION AT 12% PERTAINING TO EARLIER ASSESSMENT YEARS AND THE CURR ENT MARKET CONDITIONS CHANGED DUE TO SLUMP IN REAL ESTATE BUSI NESS. IN OUR OPINION THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CANNOT BE SUSTAINED AND WE SET ASIDE THE ORDER AND DIRE CT THE ASSESSING OFFICER TO ESTIMATE INCOME AT 8% ON GROSS SALES AND PASS THE ORDER. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.2043/MDS/2015 IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 17TH DAY OF FE BRUARY, 2016 AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) # $% / ACCOUNTANT MEMBER ( & . ' ( ) (G. PAVAN KUMAR) ) $% / JUDICIAL MEMBER *& / CHENNAI + / DATED:17TH FEBRUARY, 2016 KV , ' $'./ 0/' / COPY TO: 1 . ! / APPELLANT 4. 1' / CIT 2. $% ! / RESPONDENT 5. /2 3 $'4 / DR 3. 1' () / CIT(A) 6. 3 7 8 & / GF ITA NO.2043/MDS/2015. :- 7 -: