The ITO, Ward-5(2), Ahmedabad V. M/s. Parshwanath Housing Finance Corporation Ltd., Ahmedabad

ITA 256/AHD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5322 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: M G PATEL
• Keywords: Rule of consistency

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.256/AHD/2013 [ASSTT.YEAR : 2009-2010] ITO, WARD-5(2) AHMEDABAD. /VS. M/S.PARSHWANATH HOUSING FINANCE CORPORATION LTD. 50, HARISIDH CHAMBERS ASHRAM ROAD, AHMEDABAD 380 009. PAN : AAACP 9020 A ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI J.P. JHANGID, SR. DR 4& 1 2 )/ ASSESSEE BY : SHRI M.G. PATEL 5 1 &(*/ DATE OF HEARING : 9 TH JANUARY, 2014 678 1 &(*/ DATE OF PRONOUNCEMENT : 7.2.2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XI, AHMEDA BAD DATED 2.11.2012. 2. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.95,89,707/- MADE ON THE BASIS OF PERCENTAGE O F PROJECT COMPLETED AS THE ASSESSEE WAS DOING THE BUSINESS AS A CONTRACTOR AND NOT AS A DEVELOPER. ITA NO.256/AHD/2013 -2- 3. THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE W AS A CONTRACTOR AND WAS NOT A DEVELOPER, AND THEREFORE, THE PERCENTAGE CO MPLETION METHOD DOES APPLIES TO THE FACTS OF THE CASE OF THE ASSESSEE. HE REFERRED TO THE ACCOUNTING STANDARD-7 OF THE INSTITUTE OF CHARTERED ACCOUNTANT S OF INDIA AND SUBMITTED THAT IN THE CASE OF A CONTRACTOR ONLY THE PERCENTAGE MET HOD OF PROJECT SHALL BE ADOPTED. HE RELIED ON THE ORDER OF THE AO. THE L EARNED COUNSEL FOR THE ASSESSEE HAS OPPOSED THE SUBMISSIONS OF THE LEARNED DR. HE SUBMITTED THAT THE ASSESSEE IS A DEVELOPER AND NOT A CONTRACTOR AS SUB MITTED ON BEHALF OF THE REVENUE. HE REFERRED TO THE COPY OF THE DEVELOPMEN T AGREEMENT FOR HOUSING PROJECT IN SUPPORT OF THE SUBMISSION, COPY OF WHICH HAS BEEN FILED IN THE COMPILATION BEFORE THE TRIBUNAL. HE SUBMITTED TH AT THE ASSESSEE WAS DECLARING ITS PROFITS ON PROJECT COMPLETION METHOD RIGHT FROM ASSESSMENT YEAR 2006-07 CONSISTENTLY AND SAME HAS BEEN ACCEPTED IN SCRUTINY ASSESSMENT BY THE REVENUE. HE SUBMITTED THAT THE AO HAS NO JURISDICTION TO CHA NGE THE METHOD OF ACCOUNTING OF THE ASSESSEE. HE RELIED ON THE ORDER OF THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A), AND ALSO VARIOUS DOCUMENTS FILED IN THE COMPILATION BY THE ASSESSEE. WE FIND THAT A PERUSAL OF THE DEVELOPMEN T AGREEMENT FOR HOUSING PROJECT DATED 30.3.2007 SHOWS THAT THE ASSESSEE WAS A DEVELOPER AND NOT A MERE CONTRACTOR. AS PER CLAUSE-19 THEREOF, THE ASSESSEE WAS ENTITLED TO THE PROFITS BETWEEN THE GROSS AMOUNT RECEIPTS FROM THE MEMBERS TOWARDS ALLOTMENT OF DIFFERENT TYPES OF RESIDENTIAL UNITS INCLUDING TTHE COST OF THE LAND WITH FACILITIES, AMENITIES, SERVICES ETC., AND TOTAL COST AND EXPENS ES FOR THE ACQUISITION OF THE SAID LAND INCURRED BY THE SOCIETY INCLUDING STAMP D UTY, LEGAL FEES AND OTHER CHARGES AND TAXES INCLUDING SERVICE TAX AND ALSO IN CLUDES THE INTEREST PAID ON AMOUNT BORROWED FOR THE PURPOSE, IF ANY. IN THESE FACTS, WE HAVE NO HESITATION IN HOLDING THAT THE ASSESSEE WAS DEVELOPER AND TH ERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE. WE FIND THAT THE ASSE SSEE WAS DECLARING ITS PROFITS ON PROJECT COMPLETION METHOD FROM THE ASSESSMENT YE AR 2006-07 CONSISTENTLY AND THE SAME WERE ACCEPTED BY THE DEPARTMENT FOR TH E ASSESSMENT YEARS 2006- ITA NO.256/AHD/2013 -3- 07, 2007-08 AND 2008-09 IN SCRUTINY ASSESSMENT MADE BY THE REVENUE. THE REVENUE HAS ACCEPTED IN ALL THESE ASSESSMENT YEARS THE METHOD OF ACCOUNTING DECLARED BY THE ASSESSEE AS PROJECT COMPLETION METH OD. IN REPLY TO A SPECIFIC QUERY FROM THE BENCH, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE PROJECT HAS ALREADY COMPLETED IN THE ASSESSMENT YEA R 2012-13 AND THE ASSESSEE HAS DECLARED INCOME OF RS.2.52 CRORES FOR THIS PROJ ECT BEFORE CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. WE FIND THAT TH E CIT(A) HAS OBSERVED THAT THE PRINCIPLE OF CONSISTENCY DEMANDS THAT IN THE CU RRENT YEAR ALSO THE SAME METHOD OF ACCOUNTING SHOULD BE ACCEPTED AND HAS CIT ED A NUMBER OF DECISIONS BY VARIOUS COURTS AND TRIBUNALS. THERE BEING NO MI STAKE IN THE ORDER OF THE CIT(A) IN HOLDING THAT THE ASSESSEE HAS ALREADY EXE RCISED OPTION OF ADOPTING THE ACCOUNTING POLICY AS PROJECT COMPLETION METHOD, AND THE SAME SHOULD BE ACCEPTED BY THE REVENUE, WE CONFIRM THE ORDER OF TH E CIT(A) AND THE GROUND OF THE APPEAL OF THE REVENUE BEING WITHOUT ANY MERIT, IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD