DEPUTY COMMISSIONER OF INCOME TAX 31(3), MUMBAI V. SEA PRINCESS REALTY, MUMBAI

ITA 2133/MUM/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3503 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2014-2015
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.2133/M/2018 ASSESSMENT YEAR: 2014-15 DCIT 31(3), ROOM NO.110, C-13, 1 ST FLOOR, PRATYAKSH KAR BHAVAN, BKC BANDRA (EAST), MUMBAI - 400051 VS. M/S. SEA PRINCESS REALTY, H WING, ASHOKRAJ SV. ROAD, GOREGAON WEST, MUMBAI - 400062 PAN: AAFFM0605C (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIMAL PUNAMIYA, A.R. REVENUE BY : SHRI MANOJ MISHRA, D.R. DATE OF HEARING : 29.01.2021 DATE OF PRONOUNCEMENT : 06.04.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 29.12.2017 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2014-15. 2. THE ONLY ISSUE CHALLENGED BY THE REVENUE IN THE VARIOUS GROUNDS OF APPEAL IS AS REGARDS DELETION OF ADDITIO N BY LD. CIT(A) AS MADE BY THE AO BY ADOPTING PERCENTAGE COMPLETION METHOD AS AGAINST THE PROJECT COMPLETION METHOD ADOPTED BY THE ASSESSEE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PR OPERTY DEVELOPER AND FILED RETURN OF INCOME ON 28.11.2014 DECLARING AN ITA NO.2133/M/2018 M/S. SEA PRINCESS REALTY 2 INCOME OF RS.21,64,100/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASS ESSEE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE DU LY ISSUED AND SERVED UPON THE ASSESSEE. FINALLY, THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 23.12.2016 PASSED UNDER SECTION 143(3) OF THE ACT BY MAKING AN ADDITION OF THE INCO ME WHICH HAS ALREADY BEEN OFFERED BY THE ASSESSEE TO TAX AND HAS BEEN ACCEPTED BY THE REVENUE IN ASSESSMENT YEAR 2015-16 ON PROJECT COMPLETION METHOD. 4. THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSE E BY HOLDING THAT IN THE SUBSEQUENT YEAR, THE ASSESSEE H AS OFFERED THE INCOME TO THE TAX IN A.Y. 2015-16 AND THE SAME HAS BEEN ACCEPTED BY THE DEPARTMENT AS PER THE ACCOUNTING PO LICY FOLLOWED BY THE ASSESSEE CONSISTENTLY OF PROJECT CO MPLETION METHOD. THE RELEVANT OPERATIVE PART OF LD CIT(A) O RDER IS AS UNDER: 6.3.19 ON CAREFUL EXAMINATION OF THE MATTER, I AM OF THEN VIEW THAT THE IMPUGNED ADDITIONS ARE NOT SUSTAINABLE FOR THE REASONS THAT FIRSTLY, THE METHOD EMPLOYED BY THE APPELLANT IN THE PRESENT CASE I.E. PROJECT COMP LETION METHOD , IS REGULARLY EMPLOYED BY THE APPELLANT AND IT HAS BEEN ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS; SECONDLY, THERE IS NO MANDATORY ACCOUNTING S TANDARD PRESCRIBING THE METHOD OF WORKING OUT PERCENTAGE STAGE OF COMPLETIO N AND THIRDLY, AS PER PROJECT COMPLETION METHOD FOLLOWED BY ASSESSEE, ENTIRE PROF IT OF THE PROJECT HAVE BEEN OFFERED TO TAX IN SUBSEQUENT AY 2015-16, WHICH HAD BEEN ACCEPTED BY ASSESSING OFFICER. UNDER THESE FACTS AND CIRCUMSTANCES AS MEN TIONED ABOVE AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONA L HIGH COURT AS CITED SUPRA AND THE RULE OF CONSISTENCY, I FIND THAT THE ADDITIONS CANNOT BE SUSTAINED. THE SAME ARE, THEREFORE, DELETED. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT IF THE AOS THEORY IS ACCEPTED IT WILL RESULT INTO DOUBLE TAXATION OF THE SAME INCOME. THE LD. C IT(A) HAS CORRECTLY PASSED THE ORDER BY RECORDING A FINDING O F FACT THAT THE INCOME HAS BEEN ASSESSED IN A.Y. 2015-16 AS PER THE ACCOUNTING ITA NO.2133/M/2018 M/S. SEA PRINCESS REALTY 3 POLICY OF PROJECT COMPLETION METHOD REGULARLY FOLLO WED BY THE ASSESSEE. IN VIEW OF THESE FACTS, WE DO NOT FIND A NY INFIRMITY IN THE ORDER OF LD. CIT(A) AND ACCORDINGLY THE SAME IS UPHELD. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.04.2021. SD/- SD/- ( AMARJIT SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 06.04.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.