Texraj Realty Pvt.Ltd., Ahmedabad V. The ACIT, Circle-4(1)(2), Ahmedabad

ITA 2491/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4453 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 28-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside; Bogus

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ I.T.A. NO.2491/AHD/2018 ( / ASSESSMENT YEAR : 2015-16) TEXRAJ REALTY PVT.LTD. 16, AGRAWAL MALL OPP. BHAGWAT VIDHYAPITH SOLA AHMEDABAD - 380 060 / VS. ASST.COMMISSIONER OF INCOME TAX CIRCLE-4(1)(2) AHMEDABAD ./ ./ PAN/GIR NO. : AACCT 6305 L ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI G.C. PIPARA, AR / RESPONDENT BY : SHRI VIDHYUT TRIVEDI, SR.DR / DATE OF HEARING 25/02/2020 !'# / DATE OF PRONOUNCEMENT 26/02/2020 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD.COMMISSIONER OF INCOME TAX(APPEALS)-8, AHMEDABAD [CIT(A) IN SHORT] DATED 09/10/2018 PASSED U/S.250(6) OF THE I NCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) RELEVANT TO ASSESSMENT YEAR (AY) 2015-16. ITA NO.2491/AHD /2018 TEXRAJ REALTY P. LTD. VS. ACIT ASST.YEAR 2015-16 - 2 - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED OT(A) HAS ERRED IN LAW AND ON FACTS IN DECIDING THE APPEAL EX- PARTE WITHOUT CONSIDERING THE WRITTEN SUBMISSION DA TED 26/09/2018 FILED IN TAPAL ON 03/10/2018, WHICH IS BEFORE THE DATE OF ORDER I.E. 09/10/2018. IN VIEW OF THE FACTS THAT WRITTEN SUBMISSION HAS ALREADY BEEN FILED IN TAPAL, THE LEARNED CIT(A) OUGHT TO HAVE DECIDED THE APPEAL IN THE LIGHT OF THE SAID WRITTEN SUBMISSION AND THEREFORE, THE ORDER PASSED BY THE LEARNED CIT(A) IS INVALID AND AS A RE SULT VARIOUS ADDITIONS /DISALLOWANCES CONFIRMED BY HIM ARE REQUIRED TO BE DELETED. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 2,00,92,889/- ON ACCOUNT OF PROPORTIONATE DISAL LOWANCE OF LAND VACATING COMPENSATION CHARGES. IN VIEW OF THE FACTS, SUBMISS IONS AND EVIDENCES FILED, THE LEARNED CIT(A) OUGHT TO HAVE DELETED THE IMPUGNED A DDITION OF RS. 2,00,92,889/-. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT ACCEPTING THE REQUEST OF THE APPELLANT TO GIVE APPROPRIATE DIRECTION TO A O FOR ADJUSTING THE OPENING VALUE OF WIP OF RS. 20,67,990/- IN THE SUBSEQUENT ASSESSM ENT YEAR WHILE OBSERVING THAT THERE IS NO ORDER ON THE ISSUE AND THE GROUND OF AP PEAL IS NOT MAINTAINABLE SINCE THE ISSUE IS NOT EMANATING FROM THE ASSESSMENT ORDER. I N VIEW OF THE FACT THAT ADJUSTMENT OF OPENING VALUE OF WIP TO THE SUBSEQUENT ASSESSMEN T YEAR IS AS PER THE LAW OF ACCOUNTING, THE LEARNED CIT(A) OUGHT TO HAVE ADMITT ED / ACCEPTED THE ISSUE BEING A LEGAL ISSUE AND OUGHT TO HAVE GIVEN APPROPRIATE DIR ECTION TO THE AO SINCE ADDITION OF RS. 20,67,990 HAS BEEN MADE FOR THE ASSESSMENT YEAR UNDER APPEAL ON ACCOUNT OF EXCESS CLAIM OF COST OF LAND SOLD. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF EMPLOYEES BENEFIT EXPENSES OF RS. 2 0,56,412/-. IN VIEW OF THE FACTS AND SUBMISSIONS FILED, THE LEARNED CIT(A) OUGHT TO HAVE DELETED THE IMPUGNED DISALLOWANCE OF RS. 20,56,412/-. 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF COST OF MATERIAL CONSUMED AMOUNTING TO RS. 7,00,45,639/-. IN VIEW OF THE FACTS, SUBMISSIONS AND EVIDENCES FILED, THE LEA RNED C1T(A) OUGHT TO HAVE DELETED THE IMPUGNED DISALLOWANCE OF RS. 7,00,45,639/-. ITA NO.2491/AHD /2018 TEXRAJ REALTY P. LTD. VS. ACIT ASST.YEAR 2015-16 - 3 - 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 05/10/2015 DECLARING TOTAL INCOME OF RS.1 ,30,24,380/-. THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASS ESSMENT AND THE ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT,1961 (H EREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 18/12/ 2017 THEREBY THE ASSESSING OFFICER (AO' IN SHORT) ASSESSED THE TOTA L INCOME OF RS.10,72,87,310/- AND MADE DISALLOWANCE OF LAND VAC ATION COMPENSATION OF RS.2,00,92,889/-, DISALLOWANCE OF EXCESS COST OF LAND OF RS.20,67,990/-, DISALLOWANCE OF EMPLOYEE BENEFIT EX PENSES OF RS.20,56,412/- AND DISALLOWANCE OF PURCHASES OF RS. 7,00,45,639/-. THE ASSESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDER, P REFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. 4. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW T HE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 5. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE CLAIM OF THE ASSESSEE WAS BONAFIDE. HE FURTHER SUBMITTED THAT T HE LD.CIT(A) HAS ERRED IN DECIDING THE APPEAL EX-PARTE WITHOUT CONSIDERING THE WRITTEN SUBMISSION DATED 26/09/2018 FILED IN TAPAL ON 03/10 /2018, WHICH IS BEFORE THE DATE OF CIT(A)S ORDER, I.E.09/10/2018. IN VIEW OF THE FACTS THAT WRITTEN SUBMISSION HAS ALREADY BEEN FILED IN T APAL, THE LD.CIT(A) ITA NO.2491/AHD /2018 TEXRAJ REALTY P. LTD. VS. ACIT ASST.YEAR 2015-16 - 4 - OUGHT TO HAVE DECIDED THE APPEAL IN THE LIGHT OF TH E SAID WRITTEN SUBMISSION AND, THEREFORE, THE ORDER PASSED BY THE LD.CIT(A) IS INVALID AND AS A RESULT VARIOUS ADDITIONS/DISALLOWANCES CON FIRMED BY THE LD.CIT(A) ARE REQUIRED TO BE DELETED. 6. ON THE CONTRARY, LD.SR.DR OPPOSED THE SUBMISSI ONS OF THE LD.COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT THE AUTHORITIES BELOW HAVE RIGHTLY DISMISSED THE APPEAL OF THE ASSESSEE. THE ASSESSEE WAS NOT ENTITLED FOR THE CLAIM, AS THE PURCHASES MADE BY T HE ASSESSEE ARE BOGUS IN NATURE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MA TERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE IMPUGNED ORDER HAS BEEN PASSED EX-PARTE TO THE ASSESSEE. IT IS CONTENDED THAT THE SUBMISSIONS OF THE ASSESSEE WERE NOT CONSIDERED NOR ANY REMAND REPORT WAS SOUGHT FROM TH E ASSESSING OFFICER. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AN D THE MATERIAL PLACED BEFORE US, THE IMPUGNED ORDER IS SET ASIDE IN THE I NTEREST OF PRINCIPLE OF NATURAL JUSTICE AND THE GROUNDS ARE RESTORED TO THE LD.CIT(A) FOR DECISION AFRESH. THE LD.CIT(A) WOULD SEEK A REMAND REPORT F ROM THE ASSESSING OFFICER IN RESPECT OF THE MATERIAL PLACED BEFORE HI M. THE ASSESSEE WOULD NOT SEEK UNNECESSARY ADJOURNMENTS AND CO-OPERATE IN THE APPELLATE ITA NO.2491/AHD /2018 TEXRAJ REALTY P. LTD. VS. ACIT ASST.YEAR 2015-16 - 5 - PROCEEDINGS. THUS, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 26 TH FEBRUARY-2020 AT AHMEDABAD SD/- SD/- ( AMARJIT SINGH) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 26/ 02 /2020 &.., .(../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-8, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 25.2.2020 (DICTATION-3- PAGE S ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..25.2.2020 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.26.02.2020 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.02.2020 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER