The ACIT, Circle-2(1), Baroda V. Shri Dilip Ghanshyambhai Chokshi, Baroda

ITA 2540/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1835 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: J P SHAH
• Keywords: Audit objection; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 2540/AHD/2012 / ASSESSMENT YEAR: 2008-09 THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), BARODA .. APPELLANT VS SHRI DILIP GHANSHYAMBHAI CHOKSHI, 6, ROKADNATH SOCIETY, RACE COURSE CIRCLE, BARODA -390007 .. RESPONDENT PAN : ACBPC 4141 P REVENUE BY : SHRI DINESH SINGH, SR. DR ASSESSEE(S) BY : SHRI J.P. SHAH, AR / DATE OF HEARING 05/04/2016 /DATE OF PRONOUNCEMENT 06/04/2016 / O R D E R PER SHAILENDRA K. YADAV, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, BARODA, DA TED 28.08.2012 FOR ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE REVENUE HAS RAISED FOLLOWING GROUNDS:- 1(I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT (APPEALS) ERRED IN DELETING ADDITION OF RS.15,32,369/- TOWARDS PROFIT FROM VRAJ DEEP' PROJECT, WITHOUT AP PRECIATING THAT ASSESSEE WAS JUST PLOTTING TO POSTPONE THE TAX LIAB ILITY BY OFFERING PROFIT AT 10% OF THE ADVANCE RECEIVED BY HIM EVEN O N COMPLETED PROJECTS EVEN IF HIS PROFIT IS MORE THAN 10% OF THE ADVANCE RECEIPT. ITA NO. 2540/AHD/2012 ACIT VS. SHRI DILIP GHANSHYAMBHAI CHOKSHI AY : 2008-09 2 1(II). THE LD.CIT(APPEALS) ERRED IN NOT APPRECIATIN G THAT THE ASSESSEE WAS NOT MAINTAINING ANY OF THE RECOGNIZED METHOD OF ACCOUNTS PRESCRIBED FOR THE BUSINESS OF CIVIL CONST RUCTION AND ALSO MAINTAINED SEPARATE RATE OF ACCOUNTS FOR INDIVIDUAL PROJECTS FOR THE YEAR UNDER REPORT WHICH WERE MAINTAINED DURING THE IMMEDIATELY PRECEDING FINANCIAL YEAR. 1(III). THE LD.CIT(APPEALS) HELD THAT THE ASSESSING OFFICER BROUGHT TO TAX THE DIFFERENCE BETWEEN THE TOTAL ADVANCES RE CEIVED IN RESPECT OF THE PROJECT AND THE WORK IN PROGRESS WAS ON THE PRESUMPTION THAT THE PROJECT WAS COMPLETED WITHOUT APPRECIATING THAT THE EXPENSES ON THE CONSTRUCTION IN THE PROJECT DURING THE FINANCIAL YEAR WAS 3% COMPARED TO OPENING WIP, SHOWING THAT O NLY SMALL AND FRINGE WORKED WERE CARRIED OUT IN THE PROJECT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT (APPEALS) ERRED IN CONSIDERING THE SUM OF RS .5,00,000/- BELONGS TO THE SON OF THE ASSESSEE, TEJAS AND THERE BY DELEING THE ADDITION OF RS.5,00,000/- TOWARDS SUPPRESSED INCOME FROM SALE OF PROPERTY WITHOUT APPRECIATING THAT IT IS CLEARLY WR ITTEN THE AGREEMENT THAT THE ASSESSEE RECEIVED THE AMOUNT AS CONFIRMING PARTY, AND THAT TEJAS HAS NOT OFFERED THE SUM FOR T AXATION, THEREFORE THE AMOUNT WILL FORM PART OF THE INCOME OF THE ASSE SSEE. 3. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR A LTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. 3. BEFORE US, AT THE OUTSET, LD. AUTHORIZED REPRESE NTATIVE SUBMITTED THAT THE PRESENT APPEAL OF THE REVENUE NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO.2 1 OF 2015 DATED 10.12.2015. THE LD. DEPARTMENTAL REPRESENTATIVE FA IRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 4. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSED THE MATERIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE FIND THAT REVENUE IS MAINLY AGGRIEVED B Y THE ORDER OF ITA NO. 2540/AHD/2012 ACIT VS. SHRI DILIP GHANSHYAMBHAI CHOKSHI AY : 2008-09 3 CIT(A) IN DELETING THE ADDITION OF RS.15,32,369/- T OWARDS THE PROFIT FROM VRAJ DEEP PROJECT AND THE TAX EFFECT OF WHICH IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAX ES (CBDT) DATED 10.12.2015 (CIRCULAR NO.21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOM E TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS.10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RET ROSPECTIVELY TO THE PENDING APPEALS. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIONS WHEREIN IT HAS BEEN PROVIDED THAT THES E INSTRUCTIONS WILL NOT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUASHED BY IMPUGNED ORDER OR ADDITION WAS MADE ON SOME AUDIT OBJECTIONS OR THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS , ETC. WE PRIMA-FACIE FIND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE STATED ABOVE. IT IS FURTHER OBSERVED THAT SINCE, WHILE HE ARING THE APPEAL, SUCH FACTORS WERE NOT CONSIDERED, THEREFORE, IN CASE, ON RE-VERIFICATION AT THE END OF THE ASSESSING OFFICER, IT CAME TO THE NOTICE THAT THE TAX EFFECT IS MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PRO VIDED IN THE INSTRUCTION, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATIO N SHOULD BE FILED WITHIN FOUR YEARS OF THIS ORDER. IN VIEW OF THE ABOVE, TH E APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED IN LIMINE. ORDER PRONOUNCED IN THE COURT ON 6 TH OF APRIL 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (SHAILENDRA K. YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 06/04/2016 BIJU T., PS ITA NO. 2540/AHD/2012 ACIT VS. SHRI DILIP GHANSHYAMBHAI CHOKSHI AY : 2008-09 4 !' #'$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / D R, ITAT, AHMEDABAD 6. (- . / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD