The DCIT, Circle-3, Surat V. M/s. Jagdamba Corporation, Surat

ITA 2224/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0268 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 05-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Income from undisclosed sources; Principle of natural justice; Deemed to accrue or arise in india
• Section: 69C; 143(3); 244A; 133A; 80IB; 68; 69; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI S. S. GODARA, JM, & SHRI MANISH BORA D, AM. ITA NO.2224/AHD/2011 & ITA NO.1935/AHD/2012 ASST. YEAR: 2008-09 DCIT/ ACIT, CIRCLE-3, SURAT. VS. M/S JAGDAMBA CORPORATION, BLOCK NO.23, AT & PO GODADARA, CANAL ROAD, NEAR DHRUV PARK SOCIETY, SURAT. APPELLANT RESPONDENT PAN AAFFJ 7196K APPELLANT BY SHRI PRASOON KABRA, SR.DR RESPONDENT BY WRITTEN SUBMISSION DATE OF HEARING: 19/9/2016 DATE OF PRONOUNCEMENT: 20/10/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THESE TWO APPEALS OF REVENUE FOR ASST. YEAR 2008-0 9 ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A)- II, SURAT, DATED 22/06/2011 & 20.06.2012 IN APPEAL NO.CAS-II/244/10- 11/104 & CAS- II/131/2011-12, PASSED AGAINST ORDER U/S 143(3) OF THE IT ACT, 1961 (IN SHORT THE ACT) DATED 22.11.2010 AND ORDER U/S 2 44A OF THE ACT, DT.12.08.2011 FRAMED BY DCIT, CIRCLE-3, SURAT. AS B OTH THE APPEALS RELATE TO THE SAME ASSESSEE AND THE ISSUES ARE LINK ED THEY HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 2224 & 1935 ASST. YEAR 2008-09 2 2. FIRST WE TAKE UP ITA NO.2224/AHD/2011. BRIEF FAC TS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPMENT AND BUILDING OF RESIDENTIAL PROPERTY. E -RETURN OF INCOME FOR A.Y. 2008-09 DECLARING TOTAL INCOME AT NIL WAS FILED ON 28.09.2008. THE CASE WAS SELECTED FOR SCRUTINY. THE FIRM HAD COMMENCED CONSTRUCTION OF TWO RESIDENTIAL HOUSING P ROJECTS KNOWN AS 'MANIBHADRA RESIDENCY' AND 'LAXMI PARK ROW HOUSE ' IN FINANCIAL YEAR 2004-05. THE FIRM HAS ADOPTED PROJECT COMPLETI ON METHOD FOR RECOGNITION OF REVENUE. ALL THE CONSTRUCTION EXPENS ES, ADMINISTRATIVE EXPENSES AND FINANCIAL CHARGES PERTAINING TO THE PR OJECT ARE DEBITED TO WORK IN PROGRESS ACCOUNT. IN THIS CASE, A SURVEY U/S.133A OF THE IT ACT WAS C ARRIED OUT AT THE BUSINESS PREMISES, OF THE ASSESSEE. DURING THE COUR SE OF SURVEY, THE DIARY WAS FOUND AND IMPOUNDED AND THE ASSESSEE MADE DISCLOSURE OF RS.2,01,10,511/- ON THE BASIS OF ENTRIES RECORDE D IN THIS DAIRY AS UNDISCLOSED INCOME CONFIRMED BY THE AR OF THE ASSES SEE VIDE HIS LETTER DATED 15.11.2010. HOWEVER, AS PER THE ANNUAL ACCOUNT OF THE FIRM FOR THE PERIOD ENDED 31.3.2008 FILED ALONG WITH RETURN OF INCOME IT WAS NOTED THAT THE SAID INCOME OF RS.2,01,10,500/- WHICH WAS NOT RECORDED I N THE BOOKS OF A/CS AT THE TIME OF SURVEY, HAS BEEN SHOWN AS UNACC OUNTED RECEIPTS DISCLOSED IN SURVEY UNDER CURRENT LIABILITIES AND P ROVISIONS. OUT OF THIS AMOUNT OF RS.1,12,98,147/- IS USED FOR BUILDING AND DEVELOPMENT OF THE PROPERTY AND REMAINING AMOUNT IS SHOWN AS RECEI VABLE.' ITA NO. 2224 & 1935 ASST. YEAR 2008-09 3 THE AUDITOR OF THE ASSESSEE GAVE THE FOLLOWING 'NOT E UNDER SIGNIFICANT ACCOUNTING POLICIES' OF THE AUDIT REPORT ALONG WITH RETURN OF INCOME. THE PROJECT DEVELOPMENT SITE OF THE FIRM WAS SURVEY ED BY INCOME TAX OFFICIALS DURING THE YEAR UNDER CONSIDERATION. THE FIRM HAD MADE DISCLOSURE IN SURVEY OF UNACCOUNTED RECEIPTS OF RS. 201.10 LACS EARNED FORM THE SAID PROJECT. THE SAID RECEIPTS WER E HOWEVER UTILIZED IN THE PROJECT AS COST OF CONSTRUCTION. IN VIEW OF THE FACT THAT THE FIRM HAS ADOPTED PROJECT COMPL ETION METHOD OF ACCOUNTING, THE UNACCOUNTED RECEIPTS OF R S.201.10 LACS IS SHOWN UNDER THE ACCOUNT HEAD 'UNACCOUNTED BOOKING R ECEIPTS' ON LIABILITY SIDE OF THE BALANCE SHEET AND WILL BE OFF ERED TO INCOME IN THE YEAR IN WHICH THE ENTIRE PROJECT IS COMPLETED. THIS IS DONE IN CONFORMITY OF THE PROVISIONS OF THE ACT AND IN ACCORDANCE WITH THE GENERALLY ACCEPTED ACCOUNTING P RINCIPLES, PRACTICES AND PROCEDURES. THE ARGUMENT OF AR WAS CONSIDERED BUT SAME WAS NOT ACCEPTED BY THE ASSESSING OFFICER AS THE DISCLOSURE OF RS.2,01 ,10,500/- MADE DURING THE SURVEY U/S.133A OF THE IT ACT HAS NOT BE EN DISPUTED BY THE ASSESSEE AND THE APPELLANT HAS ALSO NOT RETRACT ED THE STATEMENT OF DISCLOSURE MADE ON 13/14.03.2008. ITA NO. 2224 & 1935 ASST. YEAR 2008-09 4 LD. ASSESSING OFFICER HELD THAT AGAINST THE UNACCOU NTED INCOME OF RS.2,01,10,511/- OFFERED BY THE ASSESSEE DURING THE COURSE OF SURVEY, NO EXPENSES CAN BE CLAIMED IN ANY MANNER WH ATSOEVER, VIZ. BY DEBITING CORRESPONDING EXPENSES A/C AND TRANSFER RING IT TO W.I.P A/C AS DONE BY THE ASSESSEE AND ACCORDINGLY MADE AD DITION U/S 68/69/69C OF THE ACT. 3. ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A) AND SU CCEEDED AND THE ORDER OF LD. ASSESSING OFFICER WAS SET ASIDE. 4. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL RAISING FOLLOWING GROUNDS IN THIS APPEAL :- [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A)-II, SURAT, HAS ERRED IN DELETING THE ADDITION MADE TOWA RDS THE AMOUNT RS.2,01,10,511/- DISCLOSED DURING THE COURSE OF SUR VEY U/S. 133A OF THE ACT AND CREDITED IN BOOKS OF ACCOUNTS AS UNACCOUNT ED RECEIPTS UNDER THE HEAD CURRENT LIABILITIES AND PROVISIONS, WITHOU T NOTING THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST ON HIM T O PROVE THE SOURCES OF THE RECEIPTS WITHIN THE MEANING OF THE PROVISION S OF U/S. 68 OF THE I.T. ACT. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET-SIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE AB OVE EXTENT. 5. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWE VER, WRITTEN SUBMISSIONS WERE PLACED ON RECORD. THEREFORE, WITH THE ASSISTANCE OF LD. DR AND GOING THROUGH THE WRITTEN SUBMISSIONS FI LED BY THE ASSESSEE, WE PROCEED TO ADJUDICATE THE APPEAL. ITA NO. 2224 & 1935 ASST. YEAR 2008-09 5 6. LD. DR VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. ASSESSING OFFICER. ON THE PART OF ASSESSEE FOLLOWIN G WRITTEN SUBMISSIONS WERE PLACED BEFORE US :- (1) WRITTEN SUBMISSION DATED 1.2.2016 PLACED ON REC ORD ON 2.2.2016 WHICH READS AS UNDER :- 1. OUR ABOVE SAID CLIENT IS IN RECEIPT OF THE NOTICE OF PERSONAL HEARING IN THE SUBJECT APPEAL PREFERRED BY THE INCOME TAX DEPARTMENT AND IN RESPON SE TO THE SAME WE HAVE TO MOST HUMBLY SUBMIT AS FOLLOWS FOR THE KIND CONSIDERATION AND IMMEDIATE REFERENCE OF YOUR HONOURS AS PER THE INFORMATION AND EXPLANATION PROVIDED BY TH E SAID CLIENT. THE PERSONAL HEARING HAS BEEN FIXED ON FEBRUARY 10, 2016. THE APPEAL HAS BEEN PREFERRED BY THE DEPART MENT RAISING FOLLOWING GROUND OF APPEAL. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, IN BOOKS OF ACCOUNTS AS UNACCOUNTED RECEIPTS UNDER THE HEAD CURRENT LIAB ILITIES AND PROVISIONS, WITHOUT NOTING THAT THE ASSESSEE FAILED TO DISCHARGE TH E ONUS CAST ON HIM TO PROVE THE SOURCES OF THE RECEIPTS WITHIN THE MEANIN G OF THE PROVISIONS OF SECTION 68 OF THE I.T. ACT.' THE BRIEF FACTS AND THE CONTENTIONS OF THE FIRM FOR DI SMISSING THE APPEAL OF THE DEPARTMENT AND UPHOLDING THE ORDER OF THE LEARNED CIT(A) ARE NA RRATED HEREIN BELOW FOR THE KIND CONSIDERATION AND IMMEDIATE REFERENCE OF THE HON'BLE BENCH. THE FIRM IS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. IT WAS UNDERTA KING DEVELOPMENT OF REAL ESTATE PROJECT QUALIFYING FOR CONDITIONS PRESCRIBED U/S. 80IB(10) OF THE ACT. THE ENTIRE PROFIT OF THE FIRM, ON COMPLETION OF THE PROJECT WAS CLAIMED AS DEDUCTION U/S. 80-1B(10) OF THE ACT. YOUR HONOUR MAY KINDLY APPRECIATE THAT THE APPELLAN T HAD CLAIMED DEDUCTION U/S. 80-IB[10) OF THE ACT ON THE ENTIRE INCOME OF THE FIRM INCLUDING INCO ME DISCLOSED IN SURVEY ON COMPLETION OF THE PROJECT DURING AY 2010-11. THE DEDUCTION HAS BEEN U NDISPUTEDLY ALLOWED BY THE LEARNED ASSESSING OFFICER FOR AY 2010-1 1. 2. DURING THE SUBJECT YEAR SURVEY WAS UNDERTAKEN BY THE DEPARTMENT SURVEY TEAM AT THE PROJECT SITE OF THE FIRM. THE PARTNER OF THE FIRM SHRI VARJANGBHAI R JIIARIA MADE A DISCLOSURE OF INCOME OF RS. 201.10 LACS. DISCLOSURE WAS SPECIFICALLY MADE TOWARDS 'UNACCOUNT ED CURRENT YEAR BUSINESS INCOME EARNED OUT OF THE PROTECT OF THE FIRM'. THE RELEVANT REPLY BY THE PARTNER OF THE FIRM SHRI VARJANGBHAI JILARIA IN RESPONSE TO STATEMENT RECORDED BY THE DEPARTMENT OFFICIALS IS AS FOLLOWS. 'Q.23 IN QUESTION NO. 22 REFERRED TO HEREIN ABOVE, YOU HAVE MADE VOLUNTARY DISCLOSURE OF UNACCOUNTED INCOME OF RS. 2,01,10,51 1/- BEING EARNED BY M/S. JAGDAMBA CORPORATION, DURING THE CURRENT FINANCIAL YE AR 2007-08, ON WHICH TAX DULY PAYABLE HAS TO BE PAID BY YOUR FIRM. IN THIS REGARD, E XPLAIN AS TO WHERE IS THIS ITA NO. 2224 & 1935 ASST. YEAR 2008-09 6 UNACCOUNTED INCOME DISCLOSED PLACED BY YOU? IN WHICH AC COUNT THE DISCLOSURE OF UNACCOUNTED INCOME IS TO BE MADE? WHETHER CONSENT O F ALL THE PARTNERS OF THE FIRM HAS BEEN OBTAINED IN MAKING THE AFORESAID DISCLOSURE OF UNACCOUNTED INCOME? ANS. OUR AFORESAID FIRM M/S. JAGDAMBA CORPORATION HAS CAR RIED OUT TWO PROJECTS, (1) MANIBHADRA RESIDENCY, ADAJAN AND (2} LAXMI PARK ROW HOUSE, CANAL ROAD, GODADRA DURING FY 2007-08. THE FIRM HAS EARNED RS. 2,01,10,511/- DURING CURRENT FINANCIAL YEAR 2007-08 OUT OF AND ON ACCOUNT OF THE AFORESAID TWO PROJECTS VIZ. MANIBHADRA RESIDENCY, AC/A/AN AND LAXMI PARK ROW HOUSE. OUT OF THE SAID INCOME OF RS. 2,01,10,51 1 /-, RS. 1,20,98,147/- HAS BEEN USED IN BUILDING AND DEVELOPMENT OF BOTH THE PROJECTS. THE REMAINING AMOUNT OF RS. 80 ,12,364/- COMPRISES OF RECEIVABLES OF THE FIRM TO BE RECEIVED ON ACCOUNT OF BOTH THE AFORESAID PROJECTS. FOR MAKING DISCLOSURE OF UNACCOUNTED INCOME OF THE FIRM I HAVE TAKEN CONSENT OF ALL THE PARTNERS ON TELEPHONE AND THE SAME IS BINDING TO ALL TH E PARTNERS OF THE FIRM.' YOUR HONOURS MAY APPRECIATE THAT THE AFORESAID STAT EMENT IS REPRODUCED IN ASSESSMENT ORDER AT PAGE NO. 5 AND THE FACTS OF THE SAME ARE NOT DISPUT ED BV THE LEARNED ASSESSING OFFICER. FROM THE AFORESAID STATEMENT IT IS EVIDENT THAT THE PARTNER OF THE FIRM HAS IN CLEAR AND DISTINCT WORDS EXPLAINED IN HIS STATEMENT THAT THE DISCLOSUR E OF UNACCOUNTED INCOME OF RS. 201.10 LACS IS EARNED OUT THE BUSINESS OF DEVELOPMENT OF TWO PROJE CTS SURVEYED BY THE INCOME TAX DEPARTMENT OFFICIALS. 3. HOWEVER, THE LEARNED ASSESSING OFFICER TREATED THE INCOME OF THE FIRM AS DEEMED INCOME U/S. 68, 69 & 69C OF THE ACT ON THE GROUND THAT THE ASSE SSEE FAILED TO OFFER AN EXPLANATION REGARDING THE SOURCE OF RS. 2,01,10,511/- CREDITED IN ITS BOO KS OF ACCOUNTS, EVEN THOUGH DURING THE COURSE OF SURVEY U/S. 133A OF THE ACT ON 13.03.2008, THE P ARTNER OF THE ASSESSEE FIRM ACCEPTED RS. 2,01,10,511/- AS THE RECEIPT OF THE FIRM FROM UNDIS CLOSED SOURCES. YOUR HONOURS MAY APPRECIATE THAT THE VERSION OF THE LEARNED ASSESSING OFFICER IS ABSOLUTELY CONTORTED, SINCE THE PARTNER OF THE FIRM IN HIS STA TEMENT HAS IN CLEAR AND DISTINCT WORDS MENTIONED THE DISCLOSURE AS UNACCOUNTED CURRENT YEAR BUSINESS INCOME OF THE TWO PROJECTS UNDERTAKEN BY THE APPELLANT FIRM. HENCE, IT CANNOT BE SAID TO HAVE BEEN EARNED FROM U NDISCLOSED SOURCES. 4. IN THIS REGARD, YOUR HONOURS MAY APPRECIATE THA T THE FACTS IN THE CASE OF THE APPELLANT ARE SQUARELY COVERED BY THE FOLLOWING JUDICIAL PRONOUNC EMENTS OF JURISDICTIONAL BENCH OF THE AHMEDABAD ITAT. A) M/S. SUYOG CORPORATION IN APPEAL NO.568/AHD/2012 IS DISMISSED BY THE HON 'BLE BENCH-C OF THE TRIBUNAL VIDE ORDER DATED 26/08/2015. A COPY OF THE SAID ORDER IS ENCLOSED HEREWITH AS AN NEXURE-1. THE HON'BLE BENCH HAS WHILE DISMISSING THE DEPARTMENT APPEAL HELD AS FOLLOWS. '5. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT EXACTLY THE SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN THE CASE OF SHREE PADMAVATI DEVELOPERS (SUPRA). THE F INDING RECORDED BY THE TRIBUNAL READS AS UNDER: 7. WE HAVE HEARD BOFH THE SIDES. WE HAVE ALSO PERUSED THE IMPUGNED STATEMENT OF MR. MAHENDRA KATARIA RECORDED ON 27/28.12.2006. IN R EPLY TO A QUESTION, IT WAS ITA NO. 2224 & 1935 ASST. YEAR 2008-09 7 CATEGORICALLY STATED, QUOTE ' (I)RS.50,000/- SALES PROCEEDS OF FLAT NOT RECORDED IN BOOKS.' UNQUOTE. CONSEQUENT THEREUPON, THE SAID AMOU NT OF RS. 50 LACS WAS DULY DISCLOSED IN THE PROFIT & LOSS ACCOUNT DRAWN ON 31.3.20 07, IN THE CASE OF THE CIT VS. SUMAN PAPER AND BOARD LTD. [2009J314 ITR 1 19 (GUJ.) AN OBSERVATION HAS BEEN MADE THAT MANUFACTURING AND SALE OF BOARD PAPER AND CRAFT PAPER HAPPENED TO BE THE ONLY SOURCE OF INCOME OF THE ASSESSEE, THEREFOR E THE AMOUNT DISCLOSED CONSEQUENCE UPON THE SEARCH PARTAKES THE CHARACTER OF BUSINESS INCOME AND ELIGIBLE FOR THE DEDUCTION U/S.80IB/80IA OF THE I.T. A CT. IN THE PRESENT CASE, THE ASSESSEE HAS ADMITTED THAT THE IMPUGNED AMOUNT WAS PART OF THE SAL E CONSIDERATION RECEIVED IN CASH AT THE TIME OF BOOKING OF FLATS AND, THEREFORE, THE AMOUNT HAD DIRECT AND PROXIMATE CONNECT/ON WITH THE NORMAL BUSINESS OF CONSTRUCTION ACTIVITY, HENCE ELLIGIBLE FOR THE DEDUCT/ON U/S.80IB(W) OF THE /.T. ACT. BECAUSE OF THE FACTUAL AS A/SO LEGAL ASPECT OF THE CASE, WE HEREBY CONFIRM THE FINDING OF LEARNED CIT(APPEALS) AND DIS MISS THIS GROUND OF THE REVENUE. * * * * DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF C/T VS. SHETH DEVE LOPERS P. LTD., 25 FAXMANN.COM 173 * * * * 8. IN VIEW OF THE ABOVE CONCLUSION, WE ARE OF THE OPINION THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE A BOVE DECISION. THE ID. FIRST APPELLATE AUTHORITY HAS RIGHTLY CONSIDERED THE AMOUNT DISCLOSED BY THE ASSESSEE DURING THE COURSE OF SURVEY AS ELIGIBLE FOR GRANT OF DEDUCTION UNDER SECTION 80IB{ 10) OF THE INCOME TAX ACT. ACCORDINGLY, THIS GROUND OF APPEAL OF THE REVENUE I S DISMISSED.' B) MY HOME DEVELOPERS V. INCOME-TAX OFFI CER, WARD- 7(2), SURAT [2015] 62 TAXMANN.COM 132 (AHMEDABAD - TRIB.). '/T IS EVIDENT THAT, AS PER REVENUE, THE NOTING IN THE DIARY WHICH WAS FOUND DURING COURSE OF SURVEY IS THE DETAILS OF ON-MONEY RECEIVED FOR B OOKING OF THE FLAT IN ORNATE HOUSE PROJECT AND THE TOTAL OF SUCH RECEIPT IS RS. 76.25 LAKHS. THE ASSESSEE WAS ASKED TO STATE HOW IT IS REFLECTED IN THE ASSESSEE'S BOOKS OF ACCO UNT. IN RESPONSE FOR WHICH THE ASSESSEE ADMITTED THE RECEIPT WAS ON-MONEY RELATING TO BOOKI NG IN THE PROJECT ORNATE HOUSE, WHICH THE ASSESSEE DECLARED AS UNDISCLOSED INCOME OF THE ASSESSEE-FIRM FOR THE CURRENT YEAR. THE SUM OF RS. 76.25 LAKHS IS CREDITED IN THE ASSESSEE'S PROFIT AND LOSS ACCOUNT AS BUSINESS INCOME. THE ABOVE FACTS HAVE NOT BEEN DISPUTED BY THE REVENUE. THUS, FROM THE ABOVE STATEMENT, IT IS EVIDEN T THAT THE SUM OF RS. 76.25 LAKHS FOUND RECORDED IN THE DIARY WAS ACCEPTED TO BE THE NOTING RELATING TO RECEIPT OF ON-MONEY FOR THE BOOKING OF FLAT IN ORNATE HOUSE BY THE REVENU E AUTHORITIES AS WELL AS THE ASSESSEE. NOW, THE REVENUE IS TAXING THE SUM OF RS. 76.25 LAKHS BUT INSTEAD OF BUSINESS INCOME, TREATING THE SAME AS INCOME FRO M OTHER SOURCES. THERE IS NO JUSTIFICATION FOR THE DIFFERENT STAND OF THE REVENUE A UTHORITIES - ONE AT THE TIME OF SURVEY AND ANOTHER AT THE TIME OF REGULAR ASSESSMENT . DURING THE COURSE OF SURVEY, THE REVENUE AUTHORITIES THEMSELVES HAVE CONSIDERED TH E RECEIPT NOTED IN THE DIARY TO BE ON-MONEY RECEIVED FOR BOOKING OF THE FLATS IN ORNAT E HOUSE. THE ASSESSEE ADMITTED THE SAME AND SURRENDERED THE SUM OF RS. 76. 25 LAKHS AS ITS INCOME FROM ORNATE HOUSE PROJECT. ADMITTEDLY, THE ASSESSEE DID NOT HAVE ANY OTHER BUSINESS ACTIVITY DURING THE YEAR UNDER CONSIDERATION. CONSIDERIN G THE TOTALITY OF THESE FACTS AND THE ARGUMENTS OF BOTH THE SIDES, FHERE WAS NO JUSTIFICATION FOR THE ASSESSING OFFICER FO HOLD THAT THE SUM OF RS. 76.25 LAKHS WAS THE INCOME FROM OTHER SOURCES AND NOT THE INCOME FROM ORNATE HOUSE PROJECT. (PARA J2J. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION UNDER SECTION 80- 18(10) ON THE SUM OF RS. 76,25 LAKHS ALSO. [PARA 13].' ITA NO. 2224 & 1935 ASST. YEAR 2008-09 8 C) CIT V. SHILPA DYEING & PRINTING MILLS (P.) LTD . [2013] 39 TAXMANN.COM 3 (GUJARAT) 'SECTION 7] PERMITS AN ASSESSEE TO SET OFF LOSS OTHER THAN THAT OF CAPITAL GAINS AGAIN ST INCOME FROM OTHER HEAD. THIS VERY ISSUE CAME UP FOR CONSIDERATION BEFORE THE MADRAS HIGH COURT IN CASE OF C/T V. CHENS'TNG VENTURES [2007] 291 IJR 258/163 TAXMAN 175, WHEREIN IT WAS HELD THAT INCOME TAX IS ONLY ONE TAX AND LEVIED ON THE SUM TOTAL OF THE INCOME CLASSIFIED AND CHARGEABLE UNDER THE VARIOUS HEADS. SECTION 14 HAS CLASSIFIED THE DIFFERENT HEADS OF INCOME AND INCOME UNDER EACH HEA D IS SEPARATELY COMPUTED. INCOME WHICH IS COMPUTED IN ACCORDANCE WITH LAW IS ONE INC OME AND IT IS NOT A COLLECTION OF DISTINCT TAX LEVIED SEPARATELY ON EACH HEAD OF INCO ME AND IT IS NOT AN AGGREGATE OF VARIOUS FAXES COMPUTED WITH REFERENCE TO EACH OF THE DIFFERENT SOURCES SEP ARATELY.' D) CIT VS. SHETH DEVELOPERS P. LTD., 25 TAXMANN.CO M 173 SIMILARLY, THE QUESTION BEFORE THE HON'BLE BOMBAY H IGH COURT IN THE CASE OF SHETH DEVELOPERS PVT. LTD. (SUPRA) WAS AS UNDER: (]) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT DEDUCTIONS U/S. 80IB (10) HAS TO BE ALLOWED FROM THE INCOME COMPUTED AS UNDISCLOSED INCOME U/S. 69A OF THE INCO ME TAX ACT, 1961? (2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S. 8 0IB(10) WHERE NO SUCH CLAIM IS MADE BY THE ASSESSEE IN THE RETURN OF INCOME FOR THE BLOCK PERIOD? THE HON'BLE HIGH COURT HAS DECIDED BOTH THESE QUESTIO NS IN FAVOUR OF THE ASSESSEE. THE RELEVANT OBSERVATIONS OF THE HON'BLE HIGH COURT IN PARA -1 1 READ AS UNDER: '11. THE FURTHER CASE OF THE APPELLANT-REVENUE THAT IN VIEW OF SECTION 69A OF THE SAID ACT THE BENEFIT OF DEDUCTION UNDER CHAPTER VIA OF THE SAID ACT WOULD NOT BE AVAILABLE TO THE RESPONDENT ASSESSEE IS NOT WELL FOUNDED. IN T HE PRESENT FACTS IT IS NOT THE CASE OF THE REVENUE THAT THE MONEY FOUND IN POSSESSION OF THE RESPONDENT ASSESSEE COULD NOT BE EXPLAINED AND/OR ITS SOURCE COULD NOT BE EXPLAIN ED TO THE SATISFACTION OF THE ASSESSING OFFICER. IN THE PRESENT CASE UNDISCLOSED INCOME FOUND IN THE F ORM OF CASH WAS EXPLAINED AS HAVING BEEN ACQUIRED WHILE CARRYING ON BUSINESS AS A B UILDER AND THIS EXPLANATION WAS ACCEPTED BY THE ASSESSING OFFICER BY HAVING ASSE SSED THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD AS INCOME FROM PROFITS AND GAIN S OF BUSINESS OR PROFESSION. THEREFORE, THE RELIANCE BY THE REVENUE UPON THE DECIS ION OF THE GUJRAT HIGH COURT IN THE MATTER OF FAKIR MOHMED HAJI HASAN (SUPRA) IS NOT CORRECT AS THE FACTS OF THAT CASE ARE COMPLETELY DISTINGUISHABLE FROM THE PRESENT FACT S. IN THE PRESENT CASE, NO QUESTION OF APPLICATION OF SECTION 68,69 AND 69A, 698 AND 69C OF THE SAID ACT ARISES AS THE SAME HAS NOT BEEN INVOKED BY THE DEPARTMENT. IT IS AN ADMITTED POSITION BETWEEN THE PARTIES AS REFLECTED EVEN IN THE ORDER THE ASSESSING OFFICER THAT UNDISCLOSED INCOME WAS IN FACT RECEIVED BY THE RESPON DENT IN THE COURSE OF CARRYING OUT ITS BUSINESS ACTIVITIES AS A BUILDER. THE SAME WAS RETURNED BY THE X RESPONDENT AS INCOME ARISING FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION AND THE SAME WAS ACCEPTED BY THE DEPARTMENT UNLIKE IN THE MATTER OF FA KIR MOHMAD HAJI HASAN (SUPRA). 12. IN VIEW OF THE ABOVE THE ORDER DATED 12/10/2009 OF THE TRIBUNAL CANNOT BE FAULTED. THEREFORE, QUESTION (1) ABOVE IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE ITA NO. 2224 & 1935 ASST. YEAR 2008-09 9 RESPONDENT-ASSESSEE AND AGAINST THE APPELLANT-REVENUE. QUESTION {2} IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE RESPONDENT-ASSESSE E AND AGAINST THE APPELLANT- REVENUE.' 8. IN VIEW OF THE ABOVE CONCLUSION, WE ARE OF THE OP INION THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE AB OVE DECISION. THE ID. FIRST APPELLATE AUTHORITY HAS RIGHTLY CONSIDERED THE AMOUNT DISCLOSED BY THE ASSESSEE DURING THE COURSE OF SURVEY AS ELIGIBLE FOR GRANT OF DEDUCTION UNDER SECTION 8013(10) OF THE INCOME TAX ACT. ACCORDINGLY, THIS GROUND OF APP EAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D.' 5. THUS, YOUR HONOURS MAY APPRECIATE THAT THE PARTNER O F THE APPELLANT FIRM HAS EXPLICITLY MADE DISCLOSURE OF UNACCOUNTED BUSINESS RECEIPTS RECE IVED FROM PROJECT WHICH WERE UNDER DEVELOPMENT AND WHICH WERE SURVEYED BY THE DEPARTMEN T. HENCE, UNDER NO CIRCUMSTANCES CAN IT BE TREATED AS 'DEEMED INCOME' AND IT SHOULD BE TREATED AS 'BUSINESS INCOME' OF THE APPELLANT. ACCORDINGLY, TREATING IT AS BUSINESS INCOME, THE SAME H AS BEEN OFFERED BY THE APPELLANT TO TAX AS PROFIT FROM THE BOTH RESIDENTIAL PROJECTS DEVELO PED BY IT FOR AY 2010-11. DEDUCTION U/S. 80-16(10) OF THE ACT WAS CLAIMED ON THE SAME AND TH E SAME HAS BEEN ALLOWED FOR AY 2010- 11. PRAYER THE RESPONDENT FIRM, MOST HUMBLY PRAYS BEFORE THE H ON'BLE BENCH THAT THE FACTS OF THE FIRM BEING SQUARELY COVERED BY THE DECISION OF THIS VERY JURIS DICTIONAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SUYOG CORPORATION !TA NO. 568/AHD/2010, THE SUBJECT APPEAL AS PREFERRED BY THE DEPARTMENT MAY KINDLY BE DISMISSED AND THE ORDER OF THE HON'BL E CIT(A) MAY BE UPHELD. THE HON'BLE MEMBERS WOULD BE KIND ENOUGH IN ACCEPTI NG OUR HUMBLE SUBMISSION AND PRAYER MADE HEREIN ABOVE AND FOR THAT WE SHALL EVER REMAIN GRATEFUL AND DUTY BOUNDLY PRAY FOR THE SAME. (2) FURTHER ANOTHER WRITTEN SUBMISSION DATED 5 TH MAY, 2016 HAS BEEN PLACED ON RECORD WHICH READS AS UNDER :- OUR ABOVE SAID CLIENT IS IN RECEIPT OF NOTICE OF PERSONAL HEA RING IN THE SUBJECT APPEAL PREFERRED BY THE DEPARTMENT AGAINST THE ORDER OF LEARNED CIT(A) ALLO WING THE APPEAL OF THE ASSESSEE. IN ADDITION TO OUR EARLIER SUBMISSION FILED BEFORE YOUR HONOURS WE WOULD LIKE TO INFORM YOUR HONOUR TH AT THE FACTS OF THE CASE AND GROUNDS OF APPEAL OF THE DEPARTMENT IN THE CASE OF M/S. SUYOG CORPORATION ARE ABSOLUTELY SAME AS THAT IN THE CASE OF THIS FIR M. THE APPEAL PREFERRED BY THE DEPARTMENT IN THE CASE OF AA/S. SUYOG CORPORATION IN APPEAL NO. 568/A HD/2012 IS DISMISSED BY THE JURISDICTIONAL HON'BLE BENCH-C VIDE ORDER DOLED 26/08/2015. FURTHER, RELIANCE IS ALSO PLACED IN THE CASE OF DCI T VS. M/S. SUN CORPORATION IN APPEAL NO. 567/AHD/2012 WHEREIN THE APPEAL OF THE DEPARTMENT I S DISMISSED BY THE HON'BLE BENCH-B VIDE ORDER DATED 09/03/2016. A COPV OF THE SAID ORDERS IS ENCLOSED HEREWITH AS A NNEXURE-1 FOR THE IMMEDIATE REFERENCE OF YOUR HONOURS. ITA NO. 2224 & 1935 ASST. YEAR 2008-09 10 ACCORDINGLY, WE HEREBY MOST HUMBLY REQUEST YOUR HON OURS TO KINDLY CONSIDER THE DETAILED SUBMISSION FILED BEFORE YOUR HONOURS AND DISMISS THE APPEAL OF THE DEPARTMENT IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. 7. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE WR ITTEN SUBMISSIONS PLACED BEFORE US. SOLITARY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS AGAINST THE ACTION OF LD. CIT(A) FOR DELETING THE ADDITION MADE TOWARDS THE UNACCOUNTED INCOME DISCLOSED IN TH E COURSE OF SURVEY U/S 133A OF THE ACT AT RS.2,01,10,511/-. 8. FROM PERUSAL OF THE RECORDS, WE FIND THAT ASSESS EE WHO IS IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF RES IDENTIAL HOUSES DISCLOSED UNACCOUNTED ON MONEY OF RS,2,01,10,511 /- DURING THE COURSE OF SURVEY U/S 133A OF THE ACT CARRIED OUT ON 13.3.2008. THIS SURRENDER WAS ON THE BASIS OF IMPOUNDED DAIRY NAMED VALENTINE IN WHICH UNACCOUNTED PROJECT EXPENSES AND BUILDING MAT ERIAL AND LABOUR WERE MENTIONED AS RS.1,20,88,147/- AND UNACC OUNTED RECEIPTS OF RS.80,12,353/-. ON THE BASIS OF THE ABO VE SAID TWO FIGURES DISCLOSURES ON UNACCOUNTED INCOME WAS MADE AT RS.2, 01,10,511/-. WE FURTHER OBSERVE THAT ASSESSEE IS FOLLOWING COMPL ETION METHOD OF ACCOUNTING IN WHICH INCOME IS ACCOUNTED FOR WHEN TH E PROJECT IS COMPLETED. THERE IS NO DISPUTE BY THE REVENUE TO TH E EFFECT THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT WHICH GETS STRENGTHENED BY THE FACT THAT DEDUCTION U/S 80IB(10 ) OF THE ACT FOR ASST. YEAR 2010-11 WHICH ALSO INCLUDES THE TOTAL PR OFITS OF THE PROJECTS RELATING TO WHICH UNACCOUNTED INCOME WAS DISCLOSED HAS BEEN UNDISPUTEDLY ALLOWED BY THE ASSESSING OFFICER. THE ONLY DISPUTE WHICH NOW REMAINS IS WHETHER THIS INCOME WHICH HAS BEEN SHOWN AS ITA NO. 2224 & 1935 ASST. YEAR 2008-09 11 A CURRENT LIABILITY BY THE ASSESSEE IS TO BE TAXED IN THE YEAR OF DISCLOSURE I.E. ASST. YEAR 2008-09. 9. WE OBSERVE THAT LD. CIT(A) HAS DELETED THE IMPU GNED ADDITION RELYING ON THE DECISION OF THE CO-ORDINATE BENCH, A HMEDABAD, IN THE CASE OF M/S D. R. CONSTRUCTION IN ITA NO.2735/AHD/2 010 FOR ASST. YEAR 2008-09 BY OBSERVING AS UNDER:- 4.1 UPON CAREFUL CONSIDERATION OF THE DISCUSSI ON MADE IN THE ASSESSMENT ORDER, I FIND THAT THE ASSESSING OFFICE R HAS TREATED THE AMOUNT AT RS.2,01,10,511/- SHOWN BY THE APPELLANT IN WORK IN PROGRESS A/C. (WIP ) AS DEEMED INCOME U/S. 68/69/69C OF THE ACT, ON THE GROUND THAT THE ABOVE INCOME DISCLOSED BY THE APPELLANT DURING THE SURVEY CONDUCTED U/S. 133A OF THE ACT, IN THE RETURN FILED FO R THE YEAR UNDER CONSIDERATION, HAS BEEN CLUBBED AS ASSET, I.E. SHOWN AS 'WORK IN PROGRESS', AND ALSO AS UNACCOUNTED RECEIPTS UNDER THE HEAD 'CURREN T LIABILITIES AND PROVISIONS'. CONVERSELY. AMOUNT OF RS.2,01,10,511/- HAS B EEN SHOWN UNDER THE HEAD 'UNACCOUNTED BOOKING RECEIPTS' ON THE LIABIL ITY SIDE SINCE OF THE BALANCE SHEET AND AS 'WORK IN PROGRESS' ON THE ASSET SIDE O F THE BALANCE SHEET. THE ASSESSING OFFICER HAS NOT ACCEPTED THE CONTEN TION OF THE APPELLANT THAT THE ABOVE AMOUNT OF UNACCOUNTED BOOKING RECEIPTS HAS BEEN UTILIZED IN THE BUILDING AND DEVELOPMENT OF BOTH PROJECTS AS COST OF CONSTRUCTION FOR THE REASON THAT THE UNACCOUNTED BOOKING RECEIPTS TO THE EXTENT OF RS. 2.01.10 CRORE HAVE BEEN OFFE RED AS UNACCOUNTED INCOME OF THE F.Y. 2007-08 OUT OF THE TWO PROJECTS VIZ . 'MANIBHADRA RESIDENCY' AND 'LAXMI PARK ROW HOUSE', THEREFORE, AMOUNT OF RS.20 1.10 LACS SHOWN AS WIP IS DEEMED INCOME OF THE APPELLANT U/ . 6 H/&9/69C OF THE ACT. 4.2 THE APPELLANT'S CONTENTION ON THE OTHER H AND IS THAT THE ABOVE INCOME WAS DECLARED AS UNACCOUNTED BOOKING RECEI PTS FOR THE TWO PROJECTS VIZ 'MANIBHADRA RESIDENCY' AND LAXMI PARK ROW HOUSE' AND WAS RECEIVED DURING THE F.Y.2007-08, HOWEVER, S INCE IT IS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING, THE SAME IS SHOW N AS UNACCOUNTED BOOKING RECEIPT ON THE LIABILITY SIDE AND, FURTHE R, AS THE SAID AMOUNT HAS BEEN UTILIZED TOWARDS CONSTRUCTION COST OF BOTH P ROJECTS, IT HAS BEEN SHOWN UNDER THE HEAD WORK IN PROGRESS A/C., AN D THE INCOME FROM THE PROJECT MANIBHADRA RESIDENCY, HAS BEEN SHOW N IN THE F.Y. 2009-10 (A.Y. 2010-11) WHEREAS INCOME FROM THE PROJECT 'LAXMI PARK ROW HOUSE' HAS BEEN ITA NO. 2224 & 1935 ASST. YEAR 2008-09 12 SHOWN IN THE F.Y. 2010-11 (A.Y. 2011-12). THE ALT ERNATE SUBMISSION OF THE APPELLANT IS THAT THE DISCLOSURE AMOUNT OF RS.201.10 LAC S IS CONSIDERED AS INCOME OF THE CURRENT YEAR, THE APPELLANT IS ENTITLED FOR DEDUCTI ON U/S. 80IB(10) OF THE ACT. 4.3 I, THEREFORE, FIND THAT IN SO FAR AS DISCLOSURE OF RS. 201.10 LACS IS CONCERNED, THE SAME HAS NOT BEEN DISPUTED BY THE AP PELLANT. THE CRUX OF THE ISSUE INVOLVED IS AS TO IN WHICH YEAR THE ABOVE DIS CLOSURE AMOUNT IS TAXABLE VIZ: (I) WHETHER IN THE ASSESSMENT YEAR UNDER APPE AL I.E. A.Y. 2008-09 OR IN THE A.YS. IN WHICH INCOME FROM THE TWO PROJECTS HAS BEE N SHOWN, VIZ. 2010-11 AND 2011-12. (II) WHETHER THE APPELLANT IS JUSTIFIED TO TAKE THE ABOVE AMOUNT OF DISCLOSURE, I.E. UNACCOUNTED BOOKING RECEIPTS AS WORK IN PROGRESS IN THE: BOOKS OF ACCOUNTS IN THE YEAR UNDER CONSIDERATION. 4,4 THE ABOVE ISSUES WERE ALSO INVOLVED IN THE APP ELLATE ORDER DATED 31-08- 2010 IN THE CASE OF M/S. D.R. CONSTRUCTION DECIDED BY THE UNDER SIGNED WHICH HAS ALSO BEEN REFERRED TO BY THE ASSESSING OFFICER IN PAGE 11 OF THE ASSESSMENT ORDER. VIDE THE SAID APPELLATE ORDER, I HAD UPHELD THE ASSESSMENT ORDER, IN BRINGING TO TAX AMOUNT OF DISCLOSURE MADE DURING TH E COUISR OF SURVEY, AS AGAINST THE CONTENTION OF THE APPELLANT THAT SINCE IT WAS F OLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING, THE SAME HAS BEEN OFFERED AS INCOME ON THE COMPLETION OF THE PROJECTS. THE ABOVE ISSUE WAS ALSO BEFORE T HE ITAT, IN THE APPEAL FILED BY M/S. D.R. CONSTRUCTION AGAINST THE ABOVE APPELLATE ORDER VIDE ITA NO. 2735/AND/2010 IN A.Y. 2008-09. THE HONBLE BENC H OF THE ITAT, AHMEDABAD VIDE ORDER DATED 08-04-2011, HAS DECIDED THE FIRST ISSUE STATED ABOVE WHICH IS IDENTICAL TO THE ISSUE DISCUSSED IN PARA 14 OF THE ITAT'S ORDER, AS UNDER : 14. ONCE WHAT IS TO BE TAXED IS ON MONEY THEN IT HAS TO BE EXAMINED WHEN CAN IT BE TAXED. WHETHER IT CAN BE TAXED IN ASST. YEAR 200 8-09 ON THE BASIS OF STATEMENT OF SHRI RAVI KHANDELWAL ALONE? IN OUR CONSIDERED VI EW THE STATEMENT THAT ON MONEY IS INCOME IS A GENERIC FORM OF SAYING RECEIPT AS INCOME AND NOT IN THE SENSE OF TRUE INTERPRETATION OF THE TERM INCOME A S PER I.T. ACT. ON MONEY AS SUCH CANNOT BE TAXED ALONE UNLESS IT IS PROVED THAT ALL THE EXPENDITURE INCURRED ON THE PROJECT WAS RECORDED IN THE BOOKS OF ACCOUNT AN D ON MONEY COMPONENT WAS OVER AND ABOVE THE RECEIPTS RECORDED IN THE BOOKS. NO SUCH EVIDENCE HAS BEEN FURNISHED. TO THE CONTRARY IT IS UNDISPUTED POSITIO N THAT OUT OF THIS ON MONEY ASSESSEE HAS INCURRED VARIOUS EXPENDITURE/INVESTMEN T. THEREFORE, ON MONEY AS SUCH AND AS A WHOLE CANNOT BE TAXED OVER AND ABOVE THE INCOME ACCRUING ON THE BASIS OF ENTRIES RECORDED IN THE BOOKS OF ACCOUNT. FROM THIS IT FOLLOWS THAT ON MONEY HAS TO BE TREATED AS REVENUE RECEIPT AND NOT PURELY INCOME. THE EXPLANATION OF THE LD. AR IN THIS REGARD HAS TO BE ACCEPTED WHICH IS ALSO SUPPORTED ITA NO. 2224 & 1935 ASST. YEAR 2008-09 13 BY THE STATEMENT OF SHRI RAVI KHANDELWAL WHEN READ AS A WHOLE. THUS RS.10 CRORES AS SUCH CANNOT BE INCOME SEPARATELY TAXABLE TAKING IT IN ISOLATION OF EXPENDITURE INCURRED BY THE ASSESSEE AGAINST SUCH R ECEIPT. THEREFORE, BOTH ON MONEY AS WELL AS EXPENDITURE/INVESTMENT HAS TO BE SEPARATELY ACCOUNTED FOR/ADDED TO THE DECLARED RECEIPTS AND DECLARED EXP ENDITURE/INVESTMENT AS PER BOOKS TO WORK OUT TOTAL INCOME ACCRUED TO THE ASSES SEE AND TOTAL EXPENDITURE/INVESTMENT INCURRED BY IT 4.5. THE OTHER ISSUE, THAT IS AS TO WHEN THE INCOME OF SUCH RECEIPTS WOULD ACCRUE TO THE APPELLANT WAS ALSO INVOLVED IN THE ABOVE CAS E AND HAS BEEN. DISCUSSED IN PARA 15 OF THE ITAT'S ORDER, AS UNDER. A \ 15. THE NEXT ISSUE COMES AS TO WHEN THE INCOME OUT OF SUCH RECEIPT WOULD ACCRUE TO THE ASSESSEE. IN OUR CONSIDERED VIEW RECEIPT OF ON MONEY IS PART AND PARCEL OF MONEY RECEIVED ON SALE OF FLATS BY CHEQUE. THE AMOU NT RECEIVED BY CHEQUE BEFORE ACTUALLY TRANSFERRING THE FLATS TO THE PURCHASERS W ILL BE IN THE NATURE OF ADVANCE AND CANNOT BE SAID TO HAVE ACCRUED TO THE ASSESSEE. ASSESSEE HAS INCURRED EXPENDITURE/INVESTMENT IN THE PROJECT IN VARIOUS YE ARS BUT INCOME TO IT WILL ACCRUE ONLY WHEN FLATS ARE SOLD TO THE BUYERS. ADVANCE MON EY RECEIVED BY THE ASSESSEE CAN NEVER BE HIS INCOME. IT WOULD ONLY BE A LIABILI TY SHOWN IN THE BALANCE SHEET AS ADVANCES FROM THE CUSTOMERS AND WILL BE ADJUSTED AG AINST THE SALE PROCEEDS OF THE FLATS WHEN FLATS ARE TRANSFERRED TO THE PURCHASERS. THEREFORE, ACCRUAL OF INCOME TO THE ASSESSEE WILL NOT ARISE ON THE DATE WHEN IT REC EIVES CHEQUE OR CASH AGAINST SALE ON FLATS BUT WILL ARISE WHEN FLATS ARE TRANSFERRED TO THE BUYERS. TILL THEN IT WILL ONLY BE AN ADVANCE. WE NOTICE THAT ASSESSEE HAS BOOKED T HE FLATS FROM ASST. YEAR 2008-09 ON WARDS AND RECEIVED ADVANCES BY WAY OF CH EQUE. IT HAS ALSO RECEIVED ADVANCE IN CASH WHICH IS NOW DECLARED AS ON MONEY IN THE STATEMENT GIVEN BY SHRI RAVI KHANDELWAL. IN A CHART GIVEN BEFORE US BY THE ASSESSEE, NAMES OF THE PROSPECTIVE BUYERS AND THEIR PANS HAVE ALSO BEEN GI VEN AND ALSO THE DATE OF BOOKING. THERE WERE 122 SUCH BUYERS AND FROM WHOM ON MONEY IN CASH TO THE EXTENT OF RS.10 CRORES IS STATED TO BE RECEIVED. TH E OUTSTANDING AMOUNT AGAINST THEM IS ALSO SHOWN. THE AREA OF THE PREMISES BOOKED , RATE AT WHICH IT IS BOOKED AND THE DATE OF BOOKING ALL FALL IN THE FY 2006-07 AND 2007-08. BUT AS PER CERTIFICATE OF THE AUDITOR WHOSE CONTENTS ARE REFER RED TO ABOVE, ASSESSEE HAS SOLD TOTAL 149 UNITS IN FY 2009-10 AND 55 UNITS IN FY 20 10-11 UPTO 15.03.2011. IT HAS SHOWN TO HAVE ADJUSTED A SUM OF RS.4,18,68,899/- OU T OF RS.10 CRORES AGAINST SALE OF 149 FLATS/SHOPS AND OF RS.1,82,09,630/- AGAINST SALE OF 55 FLATS/SHOPS. THE REVENUE IS ACCORDINGLY RECOGNIZED ONLY WHEN FLATS/S HOPS ARE SOLD AND, THEREFORE, BOTH CHEQUE PORTION/CASH PORTION BEING THE ON MONE Y WOULD ACCRUE TO THE ASSESSEE IN THE YEAR WHEN FLATS/SHOPS ARE SOLD. THE REFORE, IN NO WAY SUM OF RS.10 CRORES AS A WHOLE CAN BE TAXED IN ASST. YEAR 2008-0 9 ON THE BASIS OF EXPENDITURE AS DEEMED INCOME U/S 69C. 4.6 ON THE ISSUE OF ACCRUAL OF INCOME IN THE CASE O F BUILDERS, THE ITAT IN PARA 17 OF THE ORDER HAS HELD, AS UNDER :- ITA NO. 2224 & 1935 ASST. YEAR 2008-09 14 AS ASSESSEE IS DEALING IN CAPITAL ASSET, AS STOCK-I N-TRADE, THE BASIC PRINCIPLE OF ACCRUAL OF INCOME WILL REMAIN THE SAME I.E. PROFIT ON SALE OF FLAT WILL ACCRUE TO THE ASSESSEE WHEN FLAT IS IN EXISTENCE AND THE SAME IS TRANSFERRED TO THE PURCHASER THROUGH THE TRANSFER DEED. THE PROFIT WOULD ARISE TO THE ASSESSEE ONLY ON EXECUTIO N OF TRANSFER DEED WHICH MAY BE REGISTERED IN THE SAME YEAR OR MAY BE IN THE SUBSEQ UENT YEAR FROM THESE CONCEPTS IT FOLLOWS THAT ACCRUAL IS ANTERIOR IN POINT OF TIME T HAN ARISE. POINT OF TAXABILITY IN THE CONTEXT OF TRANSFER OF AN IMMOVABLE PROPERTY WOULD BE THE MOMENT WHEN TRANSFER DEED IS EXECUTED AND AT THAT MOMENT PROFIT TO THE ASSESSEE WOULD ACCRUE AND A RIGHT OF THE ASSESSEE TO RECEIVE CONSIDERATION FOR SUCH TRANSFER WOULD ARISE WHATEVER THE ASSESSEE HAD FROM THE PROSPECTIVE BUYER WOULD ONLY BE A LIABILITY AND THE LIABILITY AS SUCH CANNOT BE TREATED AS INCOME AS NO SUCH INCOME ACCRU ED OR AROSE TO THE ASSESSEE. MERELY RECEIVING A SUM FOR FUTURE PURCHASE OF AN IMMOVABLE PROPERTY CANNOT BE A SALE CONSIDERATION EVEN WITHIN THE MEANING OF SECTION 53 A OF TRANSFER OF PROPERTY ACT AS PROPERTY BEING NOT IN EXISTENCE. THE POSSESSION THE REOF CANNOT BE GIVEN TO THE PROSPECTIVE BUYERS AND, THEREFORE, THE SUM RECEIVED FOR BEING A DJUSTED AGAINST SALE CONSIDERATION WILL CONTINUE TO CARRY THE CHARACTER OF ADVANCE ONLY AND A LIABILITY IN THE BOOKS OF THE ASSESSEE. MERELY BECAUSE SUCH RECEIPT IS NOT DECLAR ED OR RECORDED IN THE BOOKS OF ACCOUNT WILL NOT CHANGE THE CHARACTER WHICH HAS TO BE DECID ED IN THE LIGHT OF THE PURPOSE FOR WHICH IT IS GIVEN. FURTHER SUCH RECEIPT (ON MONEY I N THE PRESENT CASE) CANNOT BE DISSECTED FROM OTHER PART OF RECEIPT THROUGH BANKING CHANNELS AS BOTH ARE INTEGRAL PART OF SALE CONSIDERATION. IF THE AMOUNT GIVEN BY CHEQUE CARRIE S THE CHARACTER AS AN ADVANCE AGAINST SALE CONSIDERATION THEN ON MONEY IN CASH WILL ALS O CARRY THE SAME CHARACTER. BOTH TYPES OF RECEIPTS I.E. RECEIPT THROUGH CHEQUES AND RECEIP T THROUGH CASH AS ON MONEY WILL ARISE AS INCOME TO THE ASSESSEE AS SOON AS TRANSFER OF IM MOVABLE PROPERTY IS EXECUTED AND NOT BEFORE, OR POSSESSION THEREOF IS HANDED OVER AND FO R THIS IT IS NECESSARY THAT SUCH IMMOVABLE PROPERTY SHOULD BE IN EXISTENCE. THEREFOR E, WE ARE OF THE CONSIDERED THAT ON MONEY RECEIVED BY THE ASSESSEE DID NOT HAVE THE CH ARACTER OF INCOME BUT WAS ONLY AN ADVANCE LIKE THE ONE RECEIVED THROUGH CHEQUE. BOTH WILL BECOME PART OF THE SALE CONSIDERATION TO THE ASSESSEE SIMULTANEOUSLY ON EIT HER HANDING OVER THE POSSESSION OF THE FLATS OR ON EXECUTION OF TRANSFER DEED WHICHEVER HA PPENS EARLIER. 4.7 THE HON'BLE 'C' BENCH OF TRIBUNAL IN THE ABOVE CASE, THEREFORE, IN PARA 18 OF THE ORDER HAS HELD THAT 'ADVANCE MONEY RECEIVED CITHER BY WAY OF CHEQUE OR BY WAY OF CASH WILL PARTAKE THE CHARACTER OF TAXABLE INCOME W HEN REGISTERED SALE DEED OF THE FLATS IS EXECUTED IN SUBSEQUENT YEARS.' 4.8 IN VIEW THAT FACTS INVOLVED IN THE CASE OF THE APPELLANT AND THE ABOVE CASE DECIDED BY THE ABOVE ORDER OF THE JURISDICTIONAL AH MEDABND BENCH OF THE IT AT, ARE IDENTICAL, I HOLD THAT THE DISCLOSURE AMOUNT OF RS. 201.10 CRORES BEING UNACCOUNTED BOOKING RECEIPTS IN THE F.Y. 2007-08 RE LEVANT TO A.Y. 2008-09 AND CORRESPONDING TO WORK IN PROGRESS A/C. OF THE SAME AMOUNT AS AT THE END OF THE F.Y. 2007-08 IS TAXABLE IN THE YEAR IN WHICH THE IN COME FROM THE ABOVE PROJECTS IS ACCOUNTED FOR. I, ACCORDINGLY, DELETE THE ADDITI ON OF THE ABOVE AMOUNT RS.201.10 CRORE SHOWN IN WORK IN PROGRESS AMOUNT, A S DEEMED INCOME OF THE APPELLANT. GROUND OF APPEAL NO. 1 TO 5 ARE THEREFOR E, ALLOWED. IN VIEW THAT THE ITA NO. 2224 & 1935 ASST. YEAR 2008-09 15 ADDITION MADE HAS BEEN DELETED, GROUNDS OF APPEAL N O. 6 & 7 DO NOT SURVIVE AND GET DISPOSED OF ACCORDINGLY. 10. WE FURTHER OBSERVE THAT IN THE WRITTEN SUBMISSI ONS ASSESSEE HAS REFERRED AND RELIED ON THE DECISION OF CO-ORDIN ATE BENCH IN THE CASE OF DCIT VS. SUN CORPORATION IN ITA NO.567/AHD/ 2012 WHEREIN SIMILAR ISSUE WAS ADJUDICATED AND DECISION WAS GIVE N IN FAVOUR OF ASSESSEE BY THE CO-ORDINATE BENCH BY OBSERVING AS U NDER :- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AS WELL AS THE DECISION IN THE CASE OF M/S.D.R. CONSTRUCTION. THE AO WAS OF THE VIEW THAT THE UNACCOUNTED INCOME OF RS.3-CRORES OFFERED BY THE AS SESSEE DURING THE COURSE OF SURVEY, NO EXPENSES CAN BE CLAIMED IN ANY MANNER WHATSOEVER, VIZ. BY DEBITING CORRESPONDING EXPENSES ACCOUNT AND TRANSFERRING IT TO WORK-IN-PROGRESS ACCOUNT AS DONE BY THE ASSESSEE. THE AO REJECTED THE CONTENTIO N OF THE ASSESSEE FOR THE REASON THAT THE INCOME OF RS.3-CRORES DISCLOSED DURING THE SURVEY SHOULD NOT BE TAXED BECAUSE THE PROJECT OF THE ASSESSEE WAS NOT COMPLET E AS ALSO NOT ACCEPTABLE ON THE GROUND THAT THE ASSESSEE DID NOT FILE ANY EVIDENCE TO SHOW THAT THE INCOME DISCLOSED DURING SURVEY WAS GENERATED FROM THE PROJECTS WHICH WERE UNDER CONSTRUCTION. HOWEVER, THE ID.CIT(A) IN HIS ORDER HAS GIVEN A FIN DING ON FACT THAT THE DISCLOSURE OF INCOME WAS MADE BY THE PARTNERS OF THE ASSESSEE-FIR M DURING THE COURSE OF SURVEY AT THE BUSINESS PREMISES OF THE ASSESSEE. THIS DISCLOS URE IS THE ONLY BASIS OF SUCH INCOME. THERE IS NO OTHER EVIDENCE OF INCOME IN THE POSSESSION OF THE REVENUE DEPARTMENT. IN THE STATEMENT RECORDED DURING SURVEY , IT WAS SPECIFICALLY MENTIONED THAT THE DISCLOSURE WAS ON ACCOUNT OF 'UNACCOUNTED CURRENT BUSINESS RECEIPTS' THE ASSESSEE DOES NOT CARRY OUT ANY ACTIVITY OTHER THAN THE BUSINESS OF HOUSING DEVELOPMENT PROJECT. THIS FINDING OF THE ID.CIT(A) HAS NOT BEEN CONTROVERTED BY THE LD.SR.DR BY PLACING ANY CONTRARY MATERIAL ON RECORD . THE COORDINATE BENCH IN THE CASE OF M/S. D.R. CONSTRUCTION VS. ITO IN ITA NO.27 35/AHD/2010 FOR AY 2008-09 VIDE ORDER DATED 08/04/2011, UNDER THE IDENTICAL FA CTS, HAS EXAMINED THE ISSUE AT LENGTH AFTER CONSIDERING THE VARIOUS JUDICIAL PRONO UNCEMENTS AND CAME TO THE CONCLUSION THAT THE ADVANCE MONEY RECEIVED EITHER B Y WAY OF CHEQUE OR BY WAY OF CASH WILL PARTAKE THE CHARACTER OF TAXABLE INCOME W HEN REGISTERED SALE-DEED OF THE FLATS IS EXECUTED IN SUBSEQUENT YEARS. IN THE SAID CASE, THE COORDINATE BENCH OF THIS TRIBUNAL OBSERVED THAT IF THE AMOUNT GIVEN BY CHEQU E CARRIES THE CHARACTER AS AN ADVANCE AGAINST SALE CONSIDERATION, THEN 'ON-MONEY' IN CASH WILL ALSO CARRY THE SAME CHARACTER. BOTH TYPES OF RECEIPTS, I.E. RECEIPT THR OUGH CHEQUES AND RECEIPT THROUGH CASH AS 'ON-MONEY' WILL ARISE AS INCOME TO THE ASSESSEE AS SOON AS TRANSFER OF IMMOVABLE PROPERTY IS EXECUTED AND NOT BEFORE, OR POSSESSION THEREOF IS HANDED OVER AND FOR THIS IT IS NECESSARY THAT SUCH IMMOVABLE PROPERTY SHOULD BE IN EXISTENCE. THEREFORE, THE ITA NO. 2224 & 1935 ASST. YEAR 2008-09 16 COORDINATE BENCH WAS OF THE CONSIDERED VIEW THAT 'O N-MONEY' RECEIVED BY THE ASSESSEE DID NOT HAVE THE CHARACTER OF INCOME BUT W AS ONLY AN ADVANCE LIKE THE ONE RECEIVED THROUGH CHEQUE. BOTH WILL BECOME PART OF T HE SALE CONSIDERATION TO THE ASSESSEE SIMULTANEOUSLY ON EITHER HANDLING OVER THE POSSESSION OF THE FLATS OR ON EXECUTION OF TRANSFER-DEED WHICHEVER HAPPENS EARLIE R. IN THE INSTANT CASE, DURING THE COURSE OF SURVEY, THE PARTNERS OF THE ASSESSEE-FIRM HAD STATED THAT THE AMOUNTS SO DISCLOSED WAS THE BUSINESS RECEIPTS. THE REVENUE HA S NOT BROUGHT ON RECORD ANY CONTRARY MATERIAL TO CONTROVERT SUCH STATEMENT. THE REFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE ID.CIT(A), SAME IS HEREBY UPHELD. GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE REJECTED. 11. WE FURTHER OBSERVE THAT ASSESSEE HAS RELIED ON THE DECISION OF ANOTHER CO-ORDINATE BENCH IN THE CASE OF DCIT VS. S UYOG CORPORATION IN ITA NO.568/AHD/2012 FOR A. Y. 2008- 09 DEALING WITH SIMILAR ISSUE BY OBSERVING AS BELOW :- 5. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATIV ES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT EXACTLY THE SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN THE CASE OF SHREE PADMAVATI DEVELOPERS (SUPRA). THE FINDING RECORDED BY THE TRIBUNAL READS AS UNDER: '7. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERUSED THE IMPUGNED STATEMENT OF MR.MAHENDRA KATARIA RECORDED ON 27/28, 12.2006. IN REPLY TO A QUESTION, IT WAS CATEGORICALLY STATED, QUOTE ' (I)RS.50,000/- SALES PROCEEDS OF FLAT NOT RECORDED IN BOOKS.' UNQUOTE. CONSEQUENT TH EREUPON, THE SAID AMOUNT OF RS.50 LACS WAS DULY DISCLOSED IN THE PROFIT & LO SS ACCOUNT DRAWN ON 31.3.2007. IN THE CASE OF THE CIT VS. SUMAN PAPER A ND BOARD LTD. [2009J314 ITR 119 (GUJ.) AN OBSERVATION HAS BEEN MADE THAT MA NUFACTURING AND SALE OF BOARD PAPER AND CRAFT PAPER HAPPENED TO BE THE ONLY SOURCE OF INCOME OF THE ASSESSEE, THEREFORE THE AMOUNT DISCLOSED CONSEQUENC E UPON THE SEARCH PARTAKES THE CHARACTER OF BUSINESS INCOME AND ELIGI BLE FOR THE DEDUCTION U/S.80IB/80IA OF THE I.T.ACT. IN THE PRESENT CASE, THE ASSESSEE HAS ADMITTED THAT THE IMPUGNED AMOUNT WAS PART OF THE SALE CONSI DERATION RECEIVED IN CASH AT THE TIME OF BOOKING OF FLATS AND, THEREFORE, THE AMOUNT HAD DIRECT AND PROXIMATE CONNECTION WITH THE NORMAL BUSINESS OF CO NSTRUCTION ACTIVITY, HENCE ELIGIBLE FOR THE DEDUCTION U/S.80IB(10) OF THE I.T. ACT. BECAUSE OF THE FACTUAL AS ALSO LEGAL ASPECT OF THE CASE, WE HEREBY CONFIRM TH E FINDING OF LEARNED CIT(APPEALS) AND DISMISS THIS GROUND OF THE REVENUE .' 6. SIMILARLY, THE QUESTION BEFORE THE HON'BLE BOMBA Y HIGH COURT IN THE CASE OF SHETH DEVELOPERS PVT. LTD. (SUPRA) WAS AS UNDER: (1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT DEDUCTIONS U /S. 80IB (10) HAS TO BE ITA NO. 2224 & 1935 ASST. YEAR 2008-09 17 ALLOWED FROM THE INCOME COMPUTED AS UNDISCLOSED INC OME U/S. 69A OF THE INCOME TAX ACT, 1961 ? (2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN ALLOWING THE CLAIM OF DED UCTION U/S. 80IB(10) WHERE NO SUCH CLAIM IS MADE BY THE ASSESSEE IN THE RETURN OF INCOME FOR THE BLOCK PERIOD? 7. THE HON'BLE HIGH COURT HAS DECIDED BOTH THESE QU ESTIONS IN FAVOUR OF THE ASSESSEE. THE RELEVANT OBSERVATIONS OF THE HON'BLE HIGH COURT IN PARA-11 READ AS UNDER; '11. THE FURTHER CASE OF THE APPELLANT-REVENUE THAT IN VIEW OF SECTION 69A OF THE SAID ACT THE BENEFIT OF DEDUCTION UNDER CHAPTER VIA OF THE SAID ACT WOULD NOT BE AVAILABLE TO THE RESPONDENT-ASSESSEE IS NOT WELL FOUNDED. IN THE PRESENT FACTS IT IS NOT THE CASE OF THE REVENUE THA T THE MONEY FOUND IN POSSESSION OF THE ' RESPONDENT ASSESSEE COULD NOT BE EXPLAINED AND/OR I TS SOURCE COULD NOT BE EXPLAINED TO THE SATISFACTION O F THE ASSESSING OFFICER. IN THE PRESENT CASE UNDISCLOSED INCOME FOUND IN THE FO RM OF CASH WAS EXPLAINED AS HAVING BEEN ACQUIRED WHILE CARRYING ON BUSINESS AS A BUILDER AND THIS EXPLANATION WAS ACCEPTED BY THE ASSESSING OFFICER B Y HAVING ASSESSED THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD AS INCOME F ROM PROFITS AND GAINS OF BUSINESS OR PROFESSION. THEREFORE, THE RELIANCE BY THE REVENUE UPON THE DECISION OF THE GUJRAT HIGH COURT IN THE MATTER OF FAKIR MOHMED HAJI HASAN (SUPRA) IS NOT CORRECT AS THE FACTS OF THAT CASE AR E COMPLETELY DISTINGUISHABLE FROM THE PRESENT FACTS. IN THE PRESENT CASE, NO QUE STION OF APPLICATION OF SECTION 68,69 AND 69A, 69B AND 69C OF THE SAID ACT ARISES AS THE SAME HAS NOT BEEN INVOKED BY THE DEPARTMENT. IT IS AN ADMITT ED POSITION BETWEEN THE PARTIES AS REFLECTED EVEN IN THE ORDER THE ASSESSIN G OFFICER THAT UNDISCLOSED INCOME WAS IN FACT RECEIVED BY THE RESPONDENT IN TH E COURSE OF CARRYING OUT ITS BUSINESS ACTIVITIES AS A BUILDER. THE SAME WAS RETURNED BY THE RESPONDENT AS INCOME ARISING FROM PROFITS AND GAINS OF BUSINES S OR PROFESSION AND THE SAME WAS ACCEPTED BY THE DEPARTMENT UNLIKE IN THE M ATTER OF FAKIR MOHMAD HAJI HASAN (SUPRA). 12, IN VIEW OF THE ABOVE THE ORDER DATED 12/10/2009 OF THE TRIBUNAL CANNOT BE FAULTED. THEREFORE, QUESTION (1) ABOVE IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE RESPONDENT-ASSESSEE AND AGAINST THE APPELLAN T-REVENUE. QUESTION (2) IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE RES PONDENT-ASSESSEE AND AGAINST THE APPELLANT-REVENUE,' 8. IN VIEW OF THE ABOVE CONCLUSION, WE ARE OF THE O PINION THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE A BOVE DECISION. THE ID. FIRST APPELLATE AUTHORITY HAS RIGHTLY CONSIDERED THE AMOU NT DISCLOSED BY THE ASSESSEE DURING THE COURSE OF SURVEY AS ELIGIBLE FOR GRANT O F DEDUCTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT. ACCORDINGLY, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 2224 & 1935 ASST. YEAR 2008-09 18 12. FROM GOING THROUGH THE ABOVE DECISIONS AND THE DETAILED FINDINGS GIVEN BY THE LD. CIT(A) WE OBSERVE THAT IN THE GIVEN FACTS, UNDISPUTEDLY ON MONEY DISCLOSED AT RS.201.10 LACS WAS PART OF THE BUSINESS RECEIPT OF ASSESSEE AS THERE WAS NO OTHER ACTIVITIES REPORTED TO HAVE BEEN CARRIED OUT BY THE ASSESSEE. 13. LD. DR COULD NOT CONTROVERT THE FINDINGS OF LD. CIT(A) AND IN THE GIVEN FACT ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/ S 80IB(10) FOR ASST. YEAR 2008-09 AND EVEN IF THE UNACCOUNTED INCO ME IS CONSIDERED FOR ASST. YEAR 2008-09 THEN ALSO ASSESSE E WILL GET DUE RELIEF. 14. RESPECTFULLY FOLLOWING THE DECISIONS OF THE CO- ORDINATE BENCH WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD . CIT(A) ON THIS ISSUE. ACCORDINGLY, THE GROUND RAISED BY THE REVENU E IS DISMISSED. 15. OTHER GROUNDS ARE OF GENERAL NATURE, WHICH NEED NO ADJUDICATION. 16. THE APPEAL OF THE REVENUE IS DISMISSED. 17. NOW WE TAKE UP ITA NO.1935/AHD/2012, WHEREIN FO LLOWING GROUNDS HAVE BEEN RAISED BY REVENUE :- [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE A ND IN LAW, THE LD. CIT(A)- I, SURAT HAS ERRED IN DIRECTING THE A.O. TO PAY FUL L INTEREST TAXES PAID BY THE ASSESSEE, WITHOUT APPRECIATING THE FACT THAT SECTIO N 244A SAYS THAT REFUND ON PAYMENT OF SELF ASSESSMENT TAX NOT BE GRANTED. ITA NO. 2224 & 1935 ASST. YEAR 2008-09 19 [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET-SIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EXTENT. 18. BRIEFLY STATED FACTS OF THE CASE ARE THAT IN TH E ASSESSMENT ORDER U/S 143(3) OF THE ACT DATED 22.11.2010 INCOME OF TH E ASSESSEE WAS DETERMINED AT RS.2,01,10,511/- AFTER MAKING ADDITIO N OF RS.2,01,10,511/-. IN APPEAL LD. CCIT(A) DELETED THE IMPUGNED ADDITION. LD. ASSESSING OFFICER BY GIVING APPEAL EF FECT TO THE ORDER OF LD. CIT(A) GAVE REFUND AND INTEREST U/S 244A OF THE ACT ONLY ON THE ADVANCE TAX PAID AND DID NOT PAY INTEREST ON THE SE LF ASSESSMENT TAX PAID BY THE ASSESSEE. 19. AGGRIEVED WITH THIS ORDER OF LD. ASSESSING OFFI CER U/S 244A OF THE ACT ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO DIRECTED THE ASSESSING OFFICER TO EXAMINE WHETHER FULL INTEREST OF TAXES PAID BY THE ASSESSEE HAS BEEN GRANTED OR NOT INCLUDING THE INTE REST ON SELF ASSESSMENT TAXES PAID AND WORK OUT THE INTEREST ON THE DATE OF PAYMENT OF TAXES TILL THE GRANT OF REFUND TO THE AS SESSEE. 20. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 21. LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER . 22. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVE R, WRITTEN SUBMISSIONS DATED 17.10.2012 AND 12.1.2016 ARE PLAC ED ON RECORD WHICH READ AS UNDER :- ITA NO. 2224 & 1935 ASST. YEAR 2008-09 20 WRITTEN SUBMISSION DATED OCTOBER 17, 2012. 1. OUR ABOVE SAID CLIENT IS IN RECEIPT OF THE NOT ICE OF PERSONAL HEARING IN THE SUBJECT APPEAL PREFERRED BY THE INCOME TAX DEPARTME NT AND IN RESPONSE TO THE SAME WE HAVE TO MOST HUMBLY SUBMIT AS FOLLOWS FOR T HE KIND CONSIDERATION AND IMMEDIATE REFERENCE OF YOUR HONOURS AS PER THE INFO RMATION AND EXPLANATION PROVIDED BY THE SAID CLIENT. 2. YOUR HONOURS MAY APPRECIATE THAT THE SUBJECT A PPEAL HAS BEEN PREFERRED AGAINST THE ORDER OF THE LEARNED C!T[A)-IV, SURAT. THE LEARNED CIT(A) ALLOWED THE GROUND OF APPEAL OF THE RESPONDENT FIRM, CLAIMING I NTEREST U/S. 244A(L)(B) OF THE ACT; ON ENTIRE AMOUNT OF TAX PAID EITHER AS ADVANCE TAX OR AS SELF ASSESSMENT TAX. THE LEARNED ASSESSING OFFICER HAD GRANTED INTE REST ONLY ON THE AMOUNT OF REFUND PAID OUT OF ADVANCE TAX PAID BY THE RESPONDE NT FIRM AND DENIED INTEREST ON SELF ASSESSMENT TAX PAID BY THE FIRM. 3. IN SUPPORT OF OUR CONTENTION, WE ENCLOSE HEREW ITH COPY OF FORM NO. 35 ALONG WITH GROUNDS OF APPEAL AND STATEMENT OF FACTS, FILE D BEFORE THE LEARNED CIT(A)-LL, SURAT, FOR THE KIND CONSIDERATION AND IMMEDIATE REF ERENCE OF YOUR HONOURS. 4. WE FURTHER MOST HUMBLY REQUEST YOUR HONOURS TH AT SINCE THE MATTER IS SQUARELY COVERED BY THE DECISIONS OF THE HON'BLE DE LHI HIGH COURT IN THE CASE OF C/T V. SULLEJ INDUSTRIES LTD. (2010) 231 CTR (DEL) 80 AND HON'BLE MADRAS HIGH COURT IN THE CASE OF C/T V. CHOLAMANDALAM INVESTMENT & FINANCE CORPORATION CO. LTD, (2007) 2]] CTR (MAD) 384, THE SUBJECT APPEAL OF THE DEPARTMENT MAY KINDLY BE DISMISSED IN THE INTEREST OF JUSTICE. YOUR HONOURS WOULD BE KIND ENOUGH IN ACCEPTING OUR SUBMISSION MADE HEREIN ABOVE AND IN DISMISSING THE APPEAL OF THE DEPARTM ENT AND FOR THAT WE SHALL EVER REMAIN GRATEFUL. WRITTEN SUBMISSION DATED JANUARY 12, 2016 1. THE SUBJECT APPEAL IS PREFERRED BY DEPARTMENT AGAINST THE ORDER OF THE LEARNED CIT(A) ALLOWING APPEAL OF THE APPELLANT TO GRANT INTEREST OF RS. 7, 32,218/- U/S. 244A OF THE ACT ON THE REFUND OF TAX PAID BY THE APPELLANT AS SELF ASSESSMENT IN RETURN OF IN COME. 2. OUR ABOVE SAID CLIENT IS IN RECEIPT OF THE NOT ICE OF PERSONAL HEARING IN THE SUBJECT APPEAL PREFE RRED BY THE INCOME TAX DEPARTMENT AND IN RESPONSE TO THE SAME WE HAVE TO MOST HUMBLY SUBMIT AS FOLLOWS FOR THE KIND CONSIDERATION AND IMMEDIATE REFERENCE OF YOUR HONOURS AS PER THE INFORMATION AND EXPLANATION PROVIDED BY THE SAID CLIENT. 3. YOUR HONOURS MAY APPRECIATE THAT THE SUBJECT A PPEAL HAS BEEN PREFERRED AGAINST THE ORDER OF THE LEARNED CIT(A)-IV, SURAT. THE SAME IS SQUARELY COVE RED BY THE DECISION OF THE JURISDICTIONAL BENCH OF AHMEDABAD TRIBUNAL IN THE CASE OF SHYARN CORPORATIO N, ITA 1936/AHD/2012 DATED 31/12/2012 FOR AY 2008-09. COPY OF THE SAID ORDER IS ENCLOSED HEREWIT H FOR THE IMMEDIATE REFERENCE OF THE HON'BLE MEMBERS. ITA NO. 2224 & 1935 ASST. YEAR 2008-09 21 4. HENCE, WE MOST HUMBLY PRAY BEFORE THE HON'BLE BENCH TO DISMISS THE APPEAL OF THE DEPARTMENT AND UPHOLD THE ORDER OF THE LEARNED CIT(A). YOUR HO NOUR WOULD BE KIND ENOUGH IN ACCEPTING OUR REQUEST MADE HEREIN ABOVE AND FOR THAT WE SHALL REM AIN GRATEFUL. 23. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERI AL PLACED ON RECORD INCLUDING THE WRITTEN SUBMISSIONS OF ASSESSE E. THROUGH THIS APPEAL REVENUE IS AGGRIEVED WITH THE ORDER OF LD. C IT(A) DIRECTING THE ASSESSING OFFICER TO PAY FULL INTEREST U/S 244A OF THE ACT ON TAXES PAID BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT SECTION 244A OF THE ACT SAYS THAT REFUND OF SELF ASSESSMENT TAXES NOT T O BE GRANTED. WE OBSERVE THAT WHILE GIVING EFFECT TO THE ORDER OF LD . CIT(A) AND GRANTING REFUND TO THE ASSESSEE INTEREST U/S 244A OF THE ACT WAS NOT PAID ON SELF ASSESSMENT TAXES PAID BY THE ASSESSEE. 24. WE OBSERVE THAT LD. CIT(A) HAS DIRECTED THE ASS ESSING OFFICER TO GRANT INTEREST ON ALL THE TAXES PAID BY THE ASSE SSEE BY OBSERVING AS UNDER :- 4. I HAVE GONE THROUGH THE FACTS OF THE CASE AND AS SESSMENT RECORDS WHICH WERE CA LED FOR FROM AO. FROM THE RECORDS, IT IS NOT C EAR IN WHAT MANNER THE INTEREST U/S.244A HAS BEEN CALCULATED FOR ARRIVING THE FIGUR E AT RS.3,40,000/-. SINCE THE ADDITION MADE BY AO HAS BEEN DELETED BY EARNED CIT( APPEAL), APPELLANT IS ENTITLED OF INTEREST ON THE AMOUNTS PAID AS ADVANCE TAX AND SELF ASSESSMENT TAX AS PER PROVISIONS OF SECTION 244A OF I.T, ACT. THE APPELLA NT HAS ALSO RELIED ON THE COURT DECISIONS REPORTED IN 325 ITR 331 (DELHI) AND 294 I TR 438 (MAD) WHICH ALSO SUPPORT THE CASE OF APPELLANT. IN VIEW OF THESE FAC TS, AO IS DIRECTED TO EXAMINE WHETHER FULL INTEREST ON TAXES PAID BY APPELLANT HA S BEEN GRANTED OR NOT. THAN HE SHOULD WORK OUT THE AMOUNT OF INTEREST FROM THE DAT E OF PAYMENT OF TAXES TILL THE GRANT OF TO APPELLANT AND ISSUE THE REFUND ACCORDIN G 5. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTIC AL PURPOSES. 25. WE FURTHER OBSERVE THAT IN THE WRITTEN SUBMISSI ONS ASSESSEE HAS RELIED ON THE DECISION OF THE TRIBUNAL IN THE C ASE OF ACIT VS. SHYAM CORPORATION IN ITA NO.1936/AHD/2012 FOR ASST. YEAR 2008-09 ITA NO. 2224 & 1935 ASST. YEAR 2008-09 22 WHEREIN SIMILAR ISSUE HAS BEEN DEALT AND DECIDED IN FAVOUR OF ASSESSEE BY OBSERVING AS FOLLOWS :- 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT WAS SUBMITTED BY THE LD. AR IN HIS W.S THAT THIS ISSUE IS COVERED IN FAVOUR OF ASS ESSEE BY THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT V. SUTTEJ INDUSTRIES LTD. (2010) 231 CTR 80 (DEL) AND ALSO BY THE JUDGMENT OF HON'BLE MADRAS HIGH COURT RENDERED IN THE CASE OF CIT V, CHOLAMANDALAM INVESTMENT & FINANCE CORPORATION CO. LTD. (2007) 211 CTR 384 (MAD). WE FIND THAT'THIS ISSUE W AS DECIDED BY LD. CIT(A) AS PER PARA-4 OF HIS ORDER, W HICH IS REPRODUCED FOR THE SAKE OF CLARITY:- '4. I HAVE GONE THROUGH THE FACTS OF THE CASE AND C OMPUTATION OF TAX GIVING EFFECT TO THE APPEAL ORDER. FROM THE COMPUTATION, I T IS NOT CLEAR IN WHAT MANNER THE INTEREST U/S. 244A HAS BEEN CALCULATED F OR ARRIVING THE FIGURE AT RS.2,11,500/-. SINCE THE ADDITION MADE BY THE AO HA S BEEN DELETED BY LEARNED CIT(APPEALS), APPELLANT IS ENTITLED OF INTE REST ON THE AMOUNTS PAID AS ADVANCE TAX AND SELF-ASSESSMENT TAX AS PER PROVI SIONS OF SECTION 244A OF L.T. ACT. IN VIEW OF EXPRESS PROVISIONS OF THIS SECTION, AO IS DIRECTED TO EXAMINE WHETHER FULL INTEREST ON TAXES PAID BY APPE LLANT HAS BEEN GRANTED OR NOT. IF NOT, THAN HE SHOULD WORK OUT THE AMOUNT OF INTEREST FROM THE DATE OF PAYMENT OF TAXES TILL THE GRANT OF REFUND TO APP ELLANT AND ISSUE THE REFUND ACCORDINGLY.' 5. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO EXAMINE WHETHER F ULL INTEREST ON TAXES PAID BY THE ASSESSEE HAS BEEN GRANTED OR NOT AND IF NOT, TH EN HE SHOULD WORK OUT THE AMOUNT OF INTEREST FROM THE DATE OF PAYMENT OF TAX TILL THE GRANT OF REFUND TO THE ASSESSEE. FROM THIS DIRECTION OF THE LD. CIT(A), WE FIND THAT HE HAS DIRECTED THE ASSESSING OFFICER MERELY TO GRANT INTEREST TO THE A SSESSEE AS PER LAW IF THE SAME IS NOT ALREADY GRANTED TO THE ASSESSEE. AS PER THE PROVISIONS OF SECTION 244A, THE ASSESSEE IS ELIGIBLE FOR INTEREST IN RESPECT OF PAYMENT OF SELF-ASSESSMENT TAX ALSO AS PER CLAUSE (B) OF SUB-SECTION (1) OF SECTIO N 244A OF THE ACT. VARIOUS JUDGMENTS CITED BY LD. AR OF THE ASSESSEE IN HIS W. S ALSO SUPPORT THE CASE OF THE ASSESSEE AND CONSIDERING THESE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) AND HENCE, WE DECLINE TO INTERFERE. 26. WE FIND THAT THE ISSUE IN THIS APPEAL IS SQUARE LY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF AC IT VS. SHYAM CORPORATION (SUPRA). RESPECTFULLY FOLLOWING THE SAM E WE ARE OF THE VIEW THAT ASSESSEE IS ENTITLED TO INTEREST U/S 244A OF THE ACT ON ALL THE ITA NO. 2224 & 1935 ASST. YEAR 2008-09 23 TAXES PAID FROM THE DATE OF PAYMENT TILL THE GRANT OF REFUND. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. C IT(A). WE UPHOLD THE SAME. THIS GROUND OF THE REVENUE IS DISMISSED. 27. OTHER GROUNDS ARE OF GENERAL NATURE, WHICH NEED NO ADJUDICATION. 28. IN THE RESULT BOTH THE APPEALS OF REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH OCTOBER, 2016 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 20/10/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO. 2224 & 1935 ASST. YEAR 2008-09 24 1. DATE OF DICTATION: 18/10/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 20/10/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK:2 0/10/2016 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: