M/s. V.B. Builders, Ghaziabad V. DCIT, Ghaziabad

ITA 2899/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1214 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RINKI SINGH
• Keywords: Opportunity of being heard; Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBE R & SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 2899/DEL/2015 ASSESSMENT YEAR: 2010-11 V.B. BUILDERS III-H/1, RAKESH MARG, NEHRU NAGAR, GHAZIABAD. PAN NO. AAGFV0254P VS DCIT CIRCLE-2, GHAZIABAD. APPELLANT RESPONDENT ASSESSEE BY SHRI K.V.S.R. KRISHNA, CA REVENUE BY SMT. RINKI SINGH, SR. DR ORDER PER SHRI BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD.CIT(APPEALS)-MUZAFFARNAGAR DATED 24/02/2015 FOR AY 2010-11. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED RETURN OF INCOME DECLARING NIL INCOME AFTER CLAIMING DEDUCTIO NS U/S 80IB(10) OF THE I.T. ACT IN A SUM OF RS. 6.66 CRORES. THE A O IN THE ASSESSMENT ORDER NOTED THAT ASSESSEE HAS NOT SATISF IED THE CONDITIONS OF SECTION 80IB(10) OF THE ACT, THEREFOR E, CLAIM OF THE ASSESSEE WERE DENIED AND INCOME WAS ASSESSED AT RS. 6.66 CRORES. DATE OF HEARING 18.03.2019 DATE OF PRONOUNCEMENT 19.03.2019 2 ITA NO. 2899/DEL /2015 V.B. BUILDERS 3. THE LD. CIT(A) NOTED IN THE IMPUGNED ORDER THAT ASSESSEE HAS WITHDRAWN THIS GROUND OF APPEAL OF ASSESSEE REGARDI NG CLAIM MADE OF DEDUCTION U/S 80IB(10) OF THE ACT. THE LD. CIT( A) FURTHER NOTED THAT ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL G ROUNDS OF APPEAL: 1. THE LD. AO HAVING CONCLUDED THAT THE PROJECT IS INCOMPLETE HAS ERRED IN TAXING THE ENTIRE INCOME OF RS. 6.66,77,080/-. THE AO, HAVING CONCLUDED THAT THE P ROJECT WAS INCOMPLETE SHOULD HAVE ASSESSED ONLY THOSE RESIDENTIAL UNITS WHICH WERE COMPLETE AND SOLD. 2. THE ASSESSEE CONTENDS THAT THE AO HAS ERRED IN ASSE SSING AN INCOME OF RS. 6,66,77,080/- MECHANICALLY, WITHOU T EXAMINING AND GIVING ANY FINDING AS TO HOW THE INCO ME HAS BEEN ARRIVED. 4. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT IT IS THE CARDINAL PRINCIPLE OF TAXATION THAT AN ASSESSEE WILL BE TAXE D ONLY ON ITS CORRECT TAXABLE INCOME COMPUTED ACCORDING TO LAW. ASSESSEE THEREFORE PRAYED THAT ADDITIONAL GROUNDS MAY BE ADM ITTED. IT WAS FURTHER SUBMITTED THAT IN SCRUTINY ASSESSMENTS FOR SUBSEQUENT ASSESSMENT YEARS 2011-12 & 2012-13, AO HAS COMPLETE D THE ASSESSMENTS ON PERCENTAGE BASIS AND COMPUTED THE NE T PROFIT @ 19.68%. THE LD. CIT(A), HOWEVER, DID NOT ACCEPT TH E CONTENTION OF THE ASSESSEE AND DISMISSED THE MAIN GROUND OF APPEA L AS WITHDRAWN AND ALSO DISMISSED THE ADDITIONAL GROUNDS OF APPEAL. 5. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT AO SHOUL D HAVE ONLY TAXED THE INCOME OF THOSE UNITS WHICH WERE COMPLETE AND SOLD BY ASSESSEE. HE HAS SUBMITTED THAT ASSESSEE FOLLOWED COMPLETION METHOD OF ACCOUNTING AND AO SHALL HAVE TO DETERMINE THE CORRECT INCOME OF THE ASSESSEE. IN SUBSEQUENT YEARS, THE A O COMPLETED THE 3 ITA NO. 2899/DEL /2015 V.B. BUILDERS ASSESSMENTS BY APPLYING THE NET PROFIT @19.68%. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF LD. CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LD. CIT(A). THE ASSESSEE HAS RAISED THE ABOVE ADDITIONAL GROUND S CONTENDING THEREIN THAT INCOME MAY BE DETERMINED ON PROJECT CO MPLETION BASIS WHICH THE AO HAS ACCEPTED IN SUBSEQUENT ASSESSMENT YEARS. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THE AO SHOULD O NLY TAXED THE CORRECT TAXABLE INCOME AS PER LAW AND RELIED UPON B OARD CIRCULAR DATED 11/04/1955 IN WHICH IT WAS EMPHASIZED THAT DE PARTMENT SHOULD NOT TAKE ADVANTAGE OF AN ASSESSEES IGNORANC E TO COLLECT MORE TAX OUT OF HIM THAN IS LEGITIMATELY DUE FROM H IM. FURTHER, THE LD. CIT(A) BEFORE DECIDING THE ADDITIONAL GROUNDS O F APPEAL SHOULD HAVE CALLED FOR THE REMAND REPORT FROM THE AO AND B EFORE ADJUDICATING THE SAME SHOULD PASS THE ORDER, WHETHE R, HE ADMITS THE ADDITIONAL GROUNDS OF APPEAL OR NOT AND THEN AF TER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS AO SHOULD DECIDE THE ADDITIONAL GROUNDS ON MERITS. HOWEVER, LD. CIT(A) WITHOUT ADMITTING THE ADDITIONAL GROUNDS OF APPEAL AND WITHOUT PASSING ANY ORDER THEREON AND WITHOUT CALLING THE R EMAND REPORT FROM THE AO STRAIGHTWAY DISMISSED THE ADDITIONAL GR OUNDS OF APPEALS. THE LD.CIT(A) DID NOT CONSIDER THE SUBSEQ UENT ORDERS PASSED BY THE AO ON PERCENTAGE BASIS. IT IS WELL S ETTLED LAW THOUGH PRINCIPLES OF RESJUDICATA DO NOT APPLY TO INCOME TAX PROCEEDINGS BUT RULE OF CONSISTENCY DO APPLY TO THE INCOME TAX PROC EEDINGS. THE ORDER OF THE LD. CIT(A) IS ALSO NON SPEAKING ON EAC H ASPECT RAISED 4 ITA NO. 2899/DEL /2015 V.B. BUILDERS BEFORE HIM. IN THIS VIEW OF THE MATTER, WE SET ASI DE THE IMPUGNED ORDER AND RESTORE THE ADDITIONAL GROUNDS OF APPEALS TO THE FILE OF LD.CIT(A) WITH DIRECTION TO DECIDE THE SAME AS PER LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS TO THE AO, KEEPING IN MIND OBSERVATION IN T HIS ORDER. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19.03.2019 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 2899/DEL /2015 V.B. BUILDERS DATE OF DICTATION 18/03/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19/03/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 19/03 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 19/03 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 19/03 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 19/03 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19/0 3 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER