ITO, Ward-6(2), Hyderabad V. Mahalakshmi Real Estate, Hyderabad

ITA 277/HYD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87232 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Rejection of books of accounts; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 277/HYD/2013 ASSESSMENT YEAR: 2006-07 THE INCOME TAX OFFICER , WARD-6(2), 6 TH FLOOR, 'C' BLOCK, I.T.TOWERS, A.C.GUARDS, HYDERABAD VS MAHALAKSHMI REAL ESTATE, S.R.NAGAR CROSS ROAD, HYDERABAD [PAN: AAKFM 2139 A] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI RAMAKRISHNA BANDI, DR FOR ASSESSEE : SHRI T. CHAITANYA KUMAR, AR DATE OF HEARING : 0 6 - 0 1 - 201 5 DATE OF PRONOUNCEMENT : 16 - 01 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS A REVENUES APPEAL AGAINST THE COMMON ORDE R OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV HYDERABAD FO R THE ASSESSMENT YEAR (AY) 2005-06 AND 2006-07 ON THE ISS UE OF DIRECTIONS GIVEN BY THE CIT(A), WHICH RESULTED IN R EDUCTION OF RETURNED INCOME. 2. BRIEFLY STATED, ASSESSEE IS ENGAGED IN THE BUSIN ESS OF REAL ESTATE AND HAS UNDERTAKEN PLOTTING IN VENTURE NAMEL Y MAHALAXMI REAL ESTATES. SINCE THERE ARE NO SALES IN A.Y.2004 -05, ASSESSEE DID I.T.A. NO. 277 /HYD/13 MAHALAKSHMI REAL ESTATE :- 2 -: NOT DECLARE ANY INCOME. FOR A.Y.2005-06, ASSESSEE DECLARED TOTAL INCOME OF RS.7,21,546/- ON A TURNOVER OF RS.4.12 CR ORES FROM SALE OF 325 PLOTS AGGREGATING TO 82,324 SQ. YDS. FOR A.Y.2 006-07, CONSEQUENT TO THE SURVEY CONDUCTED BY THE DEPARTMEN T ON 06-01- 2006, ASSESSEE ADMITTED TOTAL INCOME OF RS.1,01,31, 049/- ON A TURNOVER OF RS.2.02 CRORES FROM SALE OF 64 PLOTS AG GREGATING TO 18,898 SQ. YDS. THE INCOME OF A.Y.2006-07 INCLUDED SUM OF RS.1 CRORE ADMITTED DURING THE SURVEY AS AN ADDITIONAL I NCOME FROM SALE OF PLOTS. ASSESSING OFFICER IN THE SCRUTINY FOR A. Y.2005-06 REJECTED BOOKS OF ACCOUNTS AND ESTIMATED THE PROFIT AT 13.34 % OF THE TURNOVER AND ASSESSED THE PROFIT AT RS.54,90,958/- IN HIS OR DER DT.28-12- 2007. ASSESSEE PREFERRED AN APPEAL WHICH WAS NOT A DMITTED BY THE CIT(A), THEN ON THE DIRECTIONS OF THE ITAT, THE APP EAL WAS CONSIDERED ON MERITS BY THE CIT(A). IN THE MEAN TIME, ASSESSE ES RETURNED INCOME FOR THE A.Y.2006-07 HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AS SUCH. THEREFORE, ASSESSEE PREFERRED AN APPEAL WITH A DELAY SEEKING ADJUSTMENT OF THE INCOME ASSESSED IN A.Y.20 05-06 FROM THE INCOME DECLARED IN AY.2006-07. 3. THE LD.CIT(A) CONSIDERED BOTH THE APPEALS AND AN ALYSED THE FACTS AND CAME TO THE CONCLUSION THAT THE ASSESSEE S ADMISSION OF PROFIT AT RS.1 CRORE IN THE COURSE OF SURVEY WAS ON THE ENTIRE PROJECT. CONSEQUENTLY, ON SALE OF 82,324 SQ. YDS IN 2005-06, THE LD.CIT(A) ARRIVED AT ADDITIONAL INCOME PROPORTIONATELY AT RS. 90,23,192/- AND ON SALE OF 8,912 SQ. YDS., UP TO THE DATE OF SURVEY AT RS.9,76,808/-. WHILE CONFIRMING THE APPORTIONMENT AS ABOVE, LD.CIT (A) DIRECTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE A.Y.2005-06 SHOULD BE DELETED. LD.CIT(A) ALSO DIRECTED FURTHER ESTIMATION OF INCOME ON THE SALES SUBSEQUENTLY MADE TO THE DATE O F SURVEY. ASSESSEE HAS ACCEPTED THE ORDER OF THE CIT(A), WHER EAS REVENUE IS I.T.A. NO. 277 /HYD/13 MAHALAKSHMI REAL ESTATE :- 3 -: AGGRIEVED IN A.Y.2006-07 AS INCOME RETURNED AT RS.1 ,01,31,049/- WAS REDUCED CONSEQUENT TO THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE ARGUMENTS OF THE LD.DR AN D LD.COUNSEL. EVEN THOUGH ASSESSEE HAS NOT ADMITTED HIGHER INCOME FOR A.Y.2005-06 AT THE TIME OF SURVEY, THE ADDITION AL INCOME INDEED PERTAINS TO SALE OF PLOTS OCCURRED OVER A PERIOD OF TIME. IN ORDER TO HONOUR THE ADMISSION OF RS.1 CRORE MADE TO THE ASSE SSING OFFICER IN THE COURSE OF SURVEY, ASSESSEE DID PAY THE TAXES AN D THEN FILED RETURN ACCORDINGLY IN A.Y.2006-07. HAD THE ASSESSING OFFI CER ACCEPTED THE RETURNS FOR A.Y.2005-06 AND A.Y.2006-07 AS SUCH, AS SESSEE WOULD NOT HAVE BEEN AGGRIEVED, HOWEVER, ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS AND MADE AN ADDITION TO THE RETUR NED INCOME AND ASSESSED AT RS.54,90,958/- IN A.Y.2005-06. IT WAS ASSESSEES SUBMISSION THAT ON SALE OF 82,324 SQ. YDS., MOST OF THE PROFIT ACCRUED IN A.Y.2005-06. ASSESSEE ADMITTED THE SAME IN A LATER YEAR AS PER THE DECLARATION MADE. SINCE THE ASSESSING O FFICER BROUGHT A PART OF INCOME IN A.Y.2005-06, ASSESSEE CONTENDED T HAT INCOME CORRESPONDINGLY SHOULD BE REDUCED FROM A.Y.2006-07. THE LD.CIT(A) ANALYSED THE FACTS CORRECTLY AND DIRECTED THE ASSES SING OFFICER TO ASSESS ON A PROPORTION BASIS. IN FACT, THE LD.CIT( A) ORDER RESULTED IN ENHANCEMENT FOR A.Y.2005-06, IN THE SENSE THAT AS A GAINST RS.7,21,546/- DECLARED AS INCOME IN THE RETURN OF I NCOME THE ULTIMATE DETERMINATION OF INCOME RESULTED AT RS.90, 23,192/- CORRESPONDINGLY THE ADDITIONAL INCOME OF RS.1 CROR E ADMITTED IN A.Y.2006-07 WAS REDUCED. WE DO NOT FIND ANY MERIT IN THE REVENUES CONTENTIONS, OBJECTING TO THE ORDER OF TH E LD.CIT(A). IN FACT EVEN THE STATEMENT RECORDED ON THE BASIS OF WHICH A SSESSEE DECLARED INCOME OF RS.1 CRORE INDICATE THAT FOR A.Y.2006-07, THE TOTAL SALES WORKS OUT TO RS.3,91,45,977/- AND AFTER DEDUCTING W ORK IN PROGRESS OF RS.3,49,66,234/-, THE BALANCE WAS NET RECEIPTS. THIS ALSO INDICATE I.T.A. NO. 277 /HYD/13 MAHALAKSHMI REAL ESTATE :- 4 -: THAT ASSESSING OFFICER IS AWARE THAT THE PROJECT WA S COMPLETED OVER A PERIOD OF TIME AND THE GROSS RECEIPTS ARE NOT ENTI RELY FOR A.Y.2006- 07, STILL HE ACCEPTED THE DECLARATION OF RS.1 CROR E IN THAT YEAR AND ASSESSEE HAS COMMITTED TO THAT BY FILING THE RETURN . SINCE ASSESSING OFFICER BROUGHT PART OF THAT INCOME TO ASSESSMENT I N EARLIER YEAR I.E., A.Y.2005-06, THE CIT(A) IS CORRECT IN CONSIDERING T HE ASSESSEES CONTENTIONS AND APPORTIONING THE INCOME ACCORDING T O THE SALES MADE DURING THE RELEVANT YEARS. WE DO NOT FIND ANYTHING TO DEVIATE FROM THE FINDINGS OF LD.CIT(A). ACCORDINGLY, THE GROUND S RAISED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16 TH JANUARY, 2015. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 16 TH JANUARY, 2015. TNMM COPY TO : 1. THE INCOME TAX OFFICER, WARD - 6 ( 2 ), 6 TH FLOOR, 'C' BLOCK, I.T . TOWERS, A.C.GUARDS, HYDERABAD 2. MAHALAKSHMI REAL ESTATE, 7-1-621/10, FLAT NO.401 , SAI MANOR APARTMENTS, S.R.NAGAR CROSS ROAD, HYDERABAD 3. CIT(A)-IV, HYDERABAD 4. CIT-III, HYDERABAD 5. D.R. ITAT, HYDERABAD.