ASHFORS HOUSING CORPORATION , MUMBAI V. ADDL. CIT, RANGE-15(1), MUMBAI

ITA 2534/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7735 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 25-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAVLD
• Assessee Lawyers: SANJAY PARIKHLD
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.2534/MUM/2018 ( / ASSESSMENT YEAR: 2011-12) ASHFORD HOUSING CORPORATION 10, ASHFORD CENTRE SHANKAR RAO NARAM PATH OPP. PENINSULA CORPORATE PARK LOWER PAREL, MUMBAI-400 013. / VS. ADDL. C IT - RANGE 15(1) MUMBAI. ! ./ ./PAN/GIR NO. AAKFA-1087-D ( !# /APPELLANT ) : ( $!# / RESPONDENT ) ASSESSEE BY : SHRI SANJAY PARIKH- LD. AR REVENUE BY : SHRI RAJESH KUMAR YADAV - LD.DR / DATE OF HEARING : 22/04/2019 / DATE OF PRONOUNCEMENT : 25/04/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2011-12 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX (APPEALS)-33, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO.CIT(A)-33/RG.21/332/2013-14,341/14-15 & 2 1/277/2015-16 D ATED 04/01/2018 ON FOLLOWING GROUNDS OF APPEAL :- VALUATION OF OPENING STOCK TO BE CONSIDERED SAME AS CLOSING STOCK OF PRECEDING YEAR 2 1. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE STA ND TAKEN BY THE LEARNED ASSESSING OFFICER OF NOT CONSIDERING THE CLOSING SOCK AS ASSE SSED IN AY 2010-11 AS THE OPENING STOCK FOR THE YEAR UNDER REFERENCE, AS A CO RRECT PROPOSITION. 2. THE LEARNED CIT(A) FAILED IN APPRECIATING THAT S INCE ADDITION WAS MADE TO CLOSING STOCK IN THE LAST YEAR DURING ASSESSMENT, CORRESPON DING ADJUSTMENT TO THE OPENING STOCK OF THE NEXT YEAR OUGHT TO HAVE BEEN MADE BY T HE LEARNED ASSESSING OFFICER. 3. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THA T THE GROUND RAISED BY THE APPELLANT WAS BASED ON THE ASSESSMENT ORDER OF THE PRECEDING YEAR PASSED BY THE AO WHICH WAS ALREADY ON RECORDS OF THE AO DURING THE PRESENT ASSESSMENT PROCEEDINGS AND WHICH HAS ATTAINED FINALITY. 4. YOUR APPELLANT PRAYS BEFORE YOUR HONOUR THAT SUM O F RS. 8,64,000/- WHICH WAS ADDED IN THE CLOSING STOCK IN THE PRECEDING YEAR I. E. AY 2010-11 SHOULD HAVE BEEN CORRESPONDINGLY ADDED TO THE OPENING STOCK OF THE Y EAR UNDER REFERENCE. FACTS LEADING TO THE DISPUTE ARE THAT THE ASSESSEE BEING RESIDENT PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS & DEVELOPERS WA S ASSESSED FOR IMPUGNED AY U/S 143(3) ON 20/12/2014 W HEREIN THE INCOME WAS DETERMINED AT RS.13.13 CRORES AFTER SOLE DISALLOWANCE OF RS.8.30 LACS. 2.1 THE ASSESSEE IS AGGRIEVED BY THE FACT THAT CERT AIN EXPENDITURE OF RS.8.64 LACS AS CLAIMED BY THE ASSESSEE IN AY 2010- 11 AS SOCIETY MAINTENANCE CHARGES WERE DISALLOWED BY LD. AO. IT WAS HELD THAT THE SAME WERE TO BE CAPITALIZED AND WOULD GO ON TO INCR EASE THE VALUE OF CLOSING STOCK OF UNSOLD FLATS AS ON 31/03/2010. UPO N FURTHER APPEAL, LD. FIRST APPELLATE AUTHORITY, VIDE ORDER DATED 02/05/2 017, CONFIRMED THE STAND OF LD. AO. IT HAS BEEN SUBMITTED THAT NO FURT HER APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE SAME AND THER EFORE, THE ISSUE HAS ALREADY ATTAINED FINALITY. A COPY OF THE APPELLATE ORDER HAS BEEN PLACED ON RECORD. 2.2 IN THIS BACKGROUND, IT IS THE SUBMISSION OF LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR], THAT SINCE VALUE OF CLOSING STOCK AS ON 31/03/2010 HAS BEEN INCREASED AND THE ISSUE HAS ATTAINED FINALITY, 3 THE SAME WOULD BECOME OPENING STOCK AS ON 01/04/201 0. IN OTHER WORDS, IT IS THE SUBMISSION OF LD. AR THAT THE OPEN ING STOCK OF FINANCIAL YEAR 2010-11 WOULD BE INCREASED BY THE CORRESPONDIN G AMOUNT AND THE EFFECT OF THE SAME SHOULD BE GIVEN WHILE FRAMING TH E ASSESSMENT OF THIS YEAR. THE ATTENTION HAS BEEN DRAWN TO THE FACT THE LD. FIRST APPELLATE AUTHORITY HAS DENIED THE SAME MERELY BY OBSERVING T HAT SUCH A CLAIM WAS NEVER MADE DURING ASSESSMENT PROCEEDINGS AND LD . AO HAD NO OCCASION TO DEAL WITH SUCH A CLAIM. 2.3 THE LD. DR SUBMITTED THAT THAT ISSUE WOULD REQU IRE FACTUAL EXAMINATION BY LOWER AUTHORITIES. 3. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS. T HE UNDISPUTED POSITION THAT EMERGES IS THAT THE ASSESSMENT FOR IM PUGNED AY WAS ALREADY FRAMED ON 20/01/2014 WHEREAS THE ASSESSEES GRIEVANCE ARISES OUT OF APPELLATE ORDER FOR AY 2010-11 WHICH WAS PAS SED ON 02/05/2017. NATURALLY, AS RIGHTLY HELD BY LD. FIRST APPELLATE A UTHORITY, LD. AO HAD NO OCCASION TO CONSIDER THE SAME WHILE FRAMING THE ASS ESSMENT. HOWEVER, THE SAME, PER SE, COULD NOT BE A REASON TO DENY THE LEGITIMATE BENEFI T TO THE ASSESSEE. THE EXPENDITURE CLAIMED BY THE ASSESS EE IN AY 2010-11 WAS A LEGITIMATE EXPENDITURE WHICH WAS ALLOWED TO B E CAPITALIZED WITH CLOSING STOCK OF THE FLATS. AS A NATURAL COROLLARY, THE OPENING STOCK FOR IMPUGNED AY WOULD INCREASE BY CORRESPONDING AMOUNT. IT ALSO APPEARS FROM THE RECORD THAT INVENTORY IN THE SHAPE OF 6 FL ATS HAVE BEEN SOLD BY THE ASSESSEE DURING THE IMPUGNED AY WHICH FURTHER S TRENGTHENS ASSESSEES CLAIM. 4. THEREFORE, LD. AO IS DIRECTED TO EXAMINE THE ASS ESSEES CLAIM IN THE LIGHT OF OUR ABOVE OBSERVATIONS. THE ASSESSEE I S DIRECTED TO SUBSTANTIATE HIS CLAIM, IN THIS REGARD. 4 5. THE APPEAL STANDS ALLOWED FOR STATISTICAL PURPOS ES IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH APRIL, 2019. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 25/04/2019 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ,- & , , / DR, ITAT, MUMBAI 6. -/01 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.