Ramaraj Varma Joint Ventures, , Visakhapatnam V. The Assistant Commissioner of Income Tax, Circle-3(1), , Visakhapatnam

ITA 309/VIZ/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9252 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 17-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Application of stay; TDS; Set aside
• Section: 143(3); 201; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER S . A.NO. 51 / VIZ/201 9 (ARISING OUT OF I.T.A. NO.309/VIZ/2019) ( / A SSESSMENT Y EAR : 20 1 5 - 1 6 ) ./ I.T. A.NO. 309/VIZ/2019 ( / A SSESSMENT Y EAR : 2015 - 16) M/S RAMRAJ VARMA JOINT VENTURES D.NO.50 - 1 - 23/90, KSR MANSIONS SEETHAMMDHARA VISAKHAPATNAM [PAN : A AAAR5559G] VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE - 3(1) VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI, AR / RESPONDENT BY : S MT.SUMAN MALIK , DR / DATE OF HEARING : 20 . 0 8 . 201 9 / DATE OF PRONOUNCEMENT : 25 .09. 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 1 , VISAKHAPATNAM VIDE 2 S.A.51/VIZ/2019 AND I.T.A. NO . 30 9 /VIZ/201 9 , A.Y.20 1 5 - 1 6 M/S RAMRAJ VARMA JOINT VENTURES, VISAKHAPATNAM I.T.A.NO.100 57 /201 8 - 1 9 / D CIT ,C - 3(1), VSP/2017 - 18 DATED 21 .02.2019 FOR THE ASSESSMENT YEAR (A.Y.) 201 5 - 1 6 . 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ADDITION OF RS.13,06,104/ - RELATING TO THE DISALLOWANCE OF LAY OUT DEVELOPMENT EXPENDITURE. THE ASSESSEE IS AN AOP ENGAGED IN THE BUSINESS OF DEVELOPMENT OF RESIDENTIAL LAYO UTS, FILED ITS RETURN OF INCOME ADMITTING TOTAL INCOME OF 88,30,120/ - ON 25.09.2015. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) BY AN ORDER DATED 23.10.2017 ON TOTAL INCOME O F RS.1,01,36,224/ - . THE ASSESSING OFFICER (AO) MADE THE ADDITION OF RS.13,06,104/ - RELATING TO LAY OUT DEVELOPMENT EXPENSES. ACCORDING TO THE AO, THE ASSESSEE DEBITED A SUM OF RS.59,81,390/ - ON ACCOUNT OF LAY OUT DEVELOPMENT EXPENSES AND THE TDS WAS DEDU CTED ON THE AMOUNT OF RS.46,75,286/ - AND THE REMAINING BALANCE OF RS.13,06,104/ - WAS BOOKED AS A PROVISION FOR DAMAGES INCURRED DUE TO THE CYCLONE HUDHUD DURING THE YEAR. SINCE THE ASSESSEE DID NOT MAKE THE DISALLOWANCE OF THE SAID EXPENDITURE FOR NON DE DUCTION OF TAX AT SOURCE, THE AO MADE THE ADDITION STATING THAT THE ASSESSEE HAD GIVEN CONSENT FOR ADDITION OF RS.13,06,104/ - . 3 S.A.51/VIZ/2019 AND I.T.A. NO . 30 9 /VIZ/201 9 , A.Y.20 1 5 - 1 6 M/S RAMRAJ VARMA JOINT VENTURES, VISAKHAPATNAM 3. AGAINST THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) CONFIRMED THE ADDITION UNDER THE IMPRESSION THAT THE ASSESSEE HAD GIVEN CONSENT FOR ADDITION. 4. AGAINST THE ORDER OF THE LD.CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.AR SUBMITTED THAT THERE WAS A MISTAKE ON THE PART OF THE AO IN OBSER VING THAT THE ASSESSEE HA D GIVEN CONSENT FOR THE ADDITION. THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE DID NOT ACCEPT THE ADDITION AT ANY STAGE OF ASSESSMENT AND THE LD.AR OF THE ASSESSEE ALSO HAS NOT GIVEN CONSENT FOR ADDITION. THE AO PASSED THE ORDER UNDE R THE MISTAKEN IMPRESSION THAT THE ASSESSEE HA D GIVEN CONSENT FOR ADDITION. THE LD.AR ALSO FILED AN AFFIDAVIT FROM THE AUTHORIZED REPRESENTATIVE WHO APPEARED BEFORE THE AO FOR ASSESSMENT, STATING THAT HE HAS NOT ACCEPTED THE ADDITION DURING THE ASSESSMEN T PROCEEDINGS. THEREFORE, THE LD.AR ARGUED THAT SINCE THERE WAS NO CONSENT FOR THE ADDITION FROM THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AND THE LD.CIT(A) PROCEEDED ON THE PREMISE THAT THE ASSESSEE HAD GIVEN CONSENT FOR THE ADDITION, THE ISSUE NEEDS TO BE REFERRED BACK TO THE AO TO EXAMINE THE DISALLOWANCE AND TO ADJUDICATE THE ISSUE AFRESH ON MERITS. 4 S.A.51/VIZ/2019 AND I.T.A. NO . 30 9 /VIZ/201 9 , A.Y.20 1 5 - 1 6 M/S RAMRAJ VARMA JOINT VENTURES, VISAKHAPATNAM 5. ON THE OTHER HAND, THE LD.DR FAIRLY CONCEDED FOR REMITTING THE MATTER BACK TO THE FILE OF THE AO. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THE AO MADE THE ADDITION ON THE PREMISE THAT THE AR OF THE ASSESSEE HAD GIVEN CONSENT FOR MAKING THE ADDITION. HOWEVER, THE LD.AR FILED AN AFFIDAVIT STATING THAT HE HAS NOT GIVEN CONSENT FOR MAKING THE A DDITION. THEREFORE, THERE WAS AN ERROR IN THE ORDER OF THE AO WITH REGARD TO THE CONSENT OF THE AR OF THE ASSESSEE FOR DISALLOWANCE OF EXPENDITURE. THE LD.CIT(A) ALSO CONFIRMED THE ADDITION ON ASSUMPTION THAT THE LD.AR OF THE ASSESSEE GAVE CONSENT FOR ADD ITION. DUE TO THE MISUNDERSTANDING OF THE AO ADDITION WAS MADE WITHOUT THE DETAILED VERIFICATION OF THE EXPENSES CLAIMED. HENCE, THIS ISSUE NEEDS TO BE EXAMINED IN DETAIL AND DECIDE THE OUTCOME. FACTS. THEREFORE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHOR ITIES AND REMIT THE MATTER BACK TO THE FILE OF THE AO FOR DENOVO CONSIDERATION OF THE ENTIRE ISSUE. THE AO IS DIRECTED TO EXAMINE THE ISSUE IN DETAIL AND DECIDE THE ISSUE AFRESH ON MERITS. IT IS NEEDLESS TO SAY THAT THE AO REQUIRED TO GIVE SUFFICIENT OPP ORTUNITY TO THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 5 S.A.51/VIZ/2019 AND I.T.A. NO . 30 9 /VIZ/201 9 , A.Y.20 1 5 - 1 6 M/S RAMRAJ VARMA JOINT VENTURES, VISAKHAPATNAM 7. SINCE THE APPEAL IS TAKEN UP SIMULTANEOUSLY, THE LD.AR HAS WITHDRAWN THE STAY APPLICATION, HENCE, THE STAY APPLICATION FILED BY THE ASSESSEE IS DISMIS SED AS WITHDRAWN. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND THE STAY APPLICATION OF THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER, 2019 S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 25 .09.2019 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - M/S RAMRAJ VARMA JOINT VENTURES , D.NO.50 - 1 - 23/90, KSR MANSIONS, SEETHAMMDHARA, VISAKHAPATNAM 2. / THE REVENUE - ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 3(1) VISAKHAPATNAM 3. THE PR. COMMISSIONER OF INCOME TAX - 1, VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM 5. , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM