M/s. ANAMIKA REAL ESTATES P. LTD., MUMBAI V. ITO Wd. - 9(1)(1), MUMBAI

ITA 2065/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1845 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 23-03-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 09-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: P JOTHWANI
• Keywords: Non compliance
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI H BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, (ACCOUNTANT MEMBER), AND SMT. ASHA VIJAYARAGHAVAN, (JUDICIAL MEMBER) ITA NO.2065/MUM./2007 ASSESSMENT YEAR : 2002-03 DATE OF HEARING 23.3.2010 ANAMIKA REAL ESTATES P. LTD., BENZA TOWER NR. SANSKRUTI THAKUR COMPLEX, BORIVALI (E) MUMBAI 400 101 PAN AABCA1819K .. APPELLANT VS INCOME TAX OFFICER, WARD 9(1)(1) AAYAKAR BHAWAN, M.K. ROAD, MUMBAI 20 RESPONDENT APPELLANT BY : SHRI P. JOTHWANI RESPONDENT BY : SHRI KESHAV SAXENA O R D E R PER PRAMOD KUMAR A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRE CTED AGAINST THE ORDER DATED 24 TH JANUARY 2007, PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT U/S 144 R/W SECTION 147 OF THE INCOME TAX ACT, 1961 (FO R SHORT THE ACT ) FOR THE ASSESSMENT YEAR 2002-03. ITA NO.2065/MUM./2007 ANAMIKA REAL ESTATE P. LTD. [2] 2. GRIEVANCE RAISED BY THE ASSESSEE, ARE AS FOLLOWS:- 1(A) THE LEARNED CIT(A) ERRED IN CONFIRMING THE AD DITION OF RS.5,67,05,537/- (BEING EXCESS OF RECEIPTS OVER WORK IN PROGRESS) AS INCOME OF THE APPELLANT AGAINST RETURNED LOSS. THE SAME MAY BE DELETED. (B) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT APPELLANT HAS BEEN REPORTING PROFIT FROM YEAR TO YEAR AT 8% OF THE W.I .P. AND THIS METHOD HAS BEEN ACCEPTED IN THE PAST. HENCE, LEARNED CIT(A) THEREFO RE ERRED IN CONFIRMING THE ADDITION. THE SAME MAY BE DELETED. (C) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT ADVANCES RECEIVED AGAINST SALE OF FLATS AND DEPOSITS RECEIVED ARE NOT TRADING RECEIPTS, THEREFORE, ERRED IN CONFIRMING THE ADDITION. (D) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT ADVANCE RECEIVED AGAINST SALE OF FLATS ARE ON ACCOUNT OF RESTRICTIVE COVENANT AND UNLESS THOSE CONDITIONS ARE FULFILLED, THEY ARE ADVANCES AND CAN NOT ASSUME THE CHARACTER OF TRADING RECEIPTS. THE ADDITION MAY THEREFORE BE DEL ETED. (E) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT DEPOSITS RECEIVED ARE BROUGHT FORWARD FROM EARLIER AND ACCEPTED AS GENUIN E. HENCE, IT CANNOT BE A TRADING RECEIPTS OF THE ASSESSEE. THE ADDITION MAY THEREFORE BE DELETED. (F) THE LEARNED CIT(A) OUGHT TO GAVE APPRECIATED TH AT APPELLANT CANNOT BE TAXED ON A NOTIONAL INCOME I.E., DIFFERENCE BETWEEN ADVANCE AND DEPOSIT RECEIVED MINUS WIP ON THE GROUND THAT APPELLANT WOU LD EARN SUCH INCOME. THE ADDITION MAY THEREFORE BE DELETED. (G) WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THAT COST IS NOT RECOUPED I.E., ADVANCE RECEIVED IS RS.6,82,14,287/- AND WIP IS RS.7,04,02,562/-. THE ADDITION MUST THER EFORE, BE DELETED. (H) WITHOUT PREJUDICE, YOUR APPELLANT PROJECT IS IN COMPLETE, WHICH THE LEARNED INCOME TAX OFFICER PRESUMED AS COMPLETE AND NOTIONALLY WORKED OUT ERRONEOUS PROFIT, YOUR APPELLANT FILED PHOTOGRAPHS OF THE INCOMPLETE STRUCTURES ON THE DATE OF FILING THE FIRST APPEAL ALONG WITH T HE SET OF APPEAL PAPERS, WHICH THE LEARNED CIT(A) HAVE IGNORED AND/OR DISREGARDED. (2) IN THE ALTERNATE AND WITHOUT PREJUDICE TO ABOV E, THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT EVEN IN THE CASE OF BEST JUDGMENTS ASSESSMENT, ITA NO.2065/MUM./2007 ANAMIKA REAL ESTATE P. LTD. [3] THE ASSESSING OFFICER HAS TO TAKE INTO CONSIDERATIO N PAST HISTORY OF THE CASE AND IT MUST CONFIRM TO RULES OF JUSTICE, EQUITY AND GOO D CONSCIENCE AND CANNOT BE ARBITRARY AND CAPRICIOUS. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDING CONSTRUCTION BUT IT HAD NOT FILED ANY RETURN OF INCOME. WHEN NOTICE U/S 148 WAS SERVE D UPON THE ASSESSEE, THE ASSESSEE INITIALLY SOUGHT SOME TIME ON THE GROUND THAT THE C OMPANY IS INOPERATIVE FOR SOME YEARS DUE TO DISPUTE BETWEEN THE DIRECTORS, BUT LATER, ON 25 TH OCTOBER 2005, FILED A RETURN WHICH WAS TIME BARRED. THE ASSESSEE ALSO DID NOT COMPLY W ITH THE REQUISITIONS MADE BY THE ASSESSING OFFICER FROM TIME TO TIME. FINALLY, THE A SSESSING OFFICER OBTAINED SOME INFORMATION REGARDING BANK ACCOUNTS AND TRANSACTION S THEREIN DIRECTLY FROM ASSESSEES BANKERS AND, BASED ON THE INFORMATION SO AVAILABLE AS ALSO INFORMATION FROM BELATED RETURN FILED BY THE ASSESSEE, FRAMED THE ASSESSMENT U/S 14 4 AT RS.5,67,05,537/-. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LE ARNED CIT(A) BUT WITHOUT ANY SUCCESS. LEARNED CIT(A) REJECTED THE GRIEVANCES OF THE ASSES SEE AND CONCLUDED AS FOLLOWS. 5. I HAVE GONE THROUGH THE CONTENTION OF THE APPEL LANT AS WELL AS THAT OF THE ASSESSING OFFICER. ON PERUSAL OF THE AB OVE FACTS OF THE CASE, IT IS NOT IN DISPUTE THAT ALL THROUGH OUT THE ASSESSME NT PROCEEDINGS DESPITE VARIOUS OPPORTUNITIES BEING GIVEN THE APPELLANT COM PANY HAD NOT CO- OPERATED WITH THE DEPARTMENT. FURTHER, IT IS EQUALL Y TRUE THAT APPELLANT HAS NOT EXPLAINED ANY RECEIPTS AND SOURCE THEREOF A ND THEREFORE UNDER THE CIRCUMSTANCES A.O. IS LEFT WITH NO CHOICE BUT T O DRAW HER CONCLUSION BASED ON THE MATERIAL AVAILABLE. CONSIDERING THE FA CT THAT APPELLANT HAS NOT EXPLAINED THE SOURCES OF FUNDS AS WELL GENUINEN ESS OF SUCH TRANSACTIONS AS ALSO CREDITWORTHINESS OF SUCH CREDI TORS, A.O. WAS DUTY BOUND TO MAKE SUCH ADDITION. THUS IN THE YEAR UNDER CONSIDERATION SINCE THE ASSESSEE HAS NOT CO-OPERATED WITH THE DEPARTMEN T WHICH RESULTED IN EX-PARTE ORDER BASED ON THE INFORMATION GATHERED FR OM OTHER SOURCES AS DISCUSSED ABOVE AND ALSO IN VIEW OF THE FACT THAT T HE MONEY HAS BEEN TRANSFERRED FROM THE ACCOUNT OF THE APPELLANT COMPA NY AND LOANS AND ADVANCES WERE GIVEN TO THE DIRECTORS AND TO OTHER P ERSONS WHICH HAS GOT NO BEARING WITH RESPECT TO CONSTRUCTION THERE WAS N OTHING ON RECORD TO SUPPORT THE CLAIM. IT IS PERTINENT TO NOTE THAT TAX AUDIT REPORT U/S 44AB AS PER THE I.T. ACT WAS NOT FILED ALONG WITH THE RE TURN OF INCOME FOR WHICH PENALTY PROCEEDINGS U/S 271B HAVE BEEN INITIA TED FOR NON- ITA NO.2065/MUM./2007 ANAMIKA REAL ESTATE P. LTD. [4] FURNISHING OF TAX AUDIT REPORT U/S 44AB SIMILARLY P ENALTY U/S 271(1)(B) FOR NON COMPLIANCE / NON-FILING OF DETAILS WAS ALSO IMPOSED. THE APPELLANT HAS ALSO NOT BEEN ABLE TO EXPLAIN THE DEP OSIT AS WELL AS WITHDRAWAL FROM THE BANK ACCOUNT BY THE VARIOUS CON CERNS / PERSONS OF THE APPELLANT GROUP. THE ONUS IS ON THE ASSESSEE TO SUBSTANTIATE ITS CLAIM THAT THE MONIES WITHDRAWN FROM THE BANK ACCOU NT OF THE APPELLANT COMPANY WERE FOR THE BUSINESS PURPOSE OF THE ASSESSEE AND NOT FOR THE PERSONAL USE OF THE VARIOUS CONCERNS / PERSON OF THE APPELLANTS GROUP. AND THEREFORE, LOOKING TO THE OV ERALL FACTS OF THE CASE, I AM CONSTRAINED TO CONFIRM SUCH RECEIPTS AMOUNTING TO RS.5,67,05,537/- ADDED BY ASSESSING OFFICER TO THE INCOME OF THE ASS ESSEE SINCE APPELLANT HAS FAILED TO EXPLAIN ITS RETURN OF INCOME DESPITE ENOUGH OPPORTUNITIES BEING GIVEN. THIS GROUND OF APPEAL IS THUS DISMISSE D. 4. THE ASSESSEE IS NOT SATISFIED AND IS IN APPEAL BEFO RE US. 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PERUS ED THE MATERIAL ON RECORD, WE DEEM IT FIT AND PROPER TO REMIT THE MATT ER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER GIVING YET ANO THER OPPORTUNITY OF HEARING TO THE ASSESSEE PARTICULARLY AS ALL THE FACTUAL CONTENTI ONS AND ARGUMENTS NOW ADVANCED BEFORE US, HAVE NOT BEEN EXAMINED ON MERITS BY ANY OF THE AUTHORITIES BELOW. WHILE THE ASSESSEE MAY HAVE HAD REASONABLE GROUNDS FOR HI S NON-APPEARANCE BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER, AS THERE WAS INFIGHTING AMONGST THE DIRECTORS AND OPERATIONS OF THE ASSESSEE COMPANY HA D REMAINED SUSPENDED, IT DOES NOT MEAN THAT THE ASSESSEE CAN BE ALLOWED TO BYPASS THE ASSESSING OFFICER ALTOGETHER. AS THE ASSESSEE HAS GIVEN US AN UNDERTA KING TO COMPLY WITH REQUISITIONS OF THE ASSESSING OFFICER AND CO-OPERATE IN EXPEDITI OUS DISPOSAL OF FRESH ASSESSMENT, WE HEREBY REMIT THE MATTER TO THE FILE OF THE ASSES SING OFFICER AND DIRECT THE ASSESSEE TO FULLY CO-OPERATE IN COMPLETING THE FRES H ASSESSMENT. IN CASE ASSESSEE DOES NOT DO SO, OR RESORT TO ANY DELAYING TACTICS, THE ASSESSING OFFICER WILL BE AT LIBERTY TO TAKE SUCH ACTION, INCLUDING, BUT NOT LIM ITED TO, EX-PARTE ASSESSMENT AS HE MAY DEEM FIT . WITH THE CONSENT OF PARTIES, THE MAT TER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER AS SUCH. ITA NO.2065/MUM./2007 ANAMIKA REAL ESTATE P. LTD. [5] 6. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PU RPOSES IN TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 30 TH DAY OF APRIL 2010. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI; 30 TH DAY OF APRIL 2010 COPIES OF THE ORDER FORWARDED TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT, MUMBAI (4) CIT(A), MUMBAI (5) DR, H BENCH (6) GUARD FILE TRUE COPY BY ORDER, ETC. ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PRADEEP J. CHOWDHURY MUMBAI BENCHES SR. PRIVATE SECRETARY ITA NO.2065/MUM./2007 ANAMIKA REAL ESTATE P. LTD. [6] DATE INITIAL 1. DRAFT DICTATED ON 23.3.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 23.4.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 23.4.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 23.4.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23.4.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 30.4.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 30.4.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER