DCIT, Bangalore V. M/s Vivek Builders & Developers, Bangalore

ITA 32/BANG/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7237 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MALLAH RAO

Judgement Text

ITA.32/BANG/2014 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'C', BENGALURU BEFORE SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI. LALIT KUMAR, JUDICIAL MEMBER I.T.A NO.32/BANG/2014 (ASSESSMENT YEAR : 2009-10) DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 7(2), BENGALURU .. APPELLANT V. M/S. VIVEK BUILDERS & DEVELOPERS, NO.132, I FLOOR, 4 TH CROSS, KASTURINAGAR, NGEF (EAST), BENGALURU 560 043 .. RESPONDENT PAN : AAFFV6084J ASSESSEE BY : SHRI. MALLAH RAO, ADVOCATE REVENUE BY : SHRI. M. K. BIJU, JCIT HEARD ON : 06.11.2017 PRONOUNCED ON : 17.11.2017 O R D E R PER LALIT KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A)-II, BENGALURU, DT.03.10.2013, FOR THE ASSES SMENT YEAR 2009-10, RAISING THEREIN THE FOLLOWING GROUNDS : ITA.32/BANG/2014 PAGE - 2 02. FACTS APROPOS ARE, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.79,63,570/-. CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF HEARING IT WAS NOTICED THAT TH E ASSESSEE IN THE P & L ACCOUNT HAD SHOWN THE AMOUNT OF RS.54,42,024/- ON A CCOUNT OF PURCHASES MADE FROM EIGHT PARTIES. NOTICES U/S.133(6) OF THE ACT WAS ISSUED. DURING THE COURSE OF ASSESSMENT, THE AO RECORDED THAT THER E IS A DISCREPANCY OF RS.52,63,098/-. ACCORDINGLY, THE AO HAS BROUGHT TO THE NOTICE OF THE LD. AR. THE LD. AR AGREED TO THE ADDITION AND THUS THE AMOUNT OF RS.52,63,098/- WAS ADDED BACK TO THE INCOME OF THE ASSESSEE. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE CIT (A). 03. BEFORE THE CIT (A), THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : ITA.32/BANG/2014 PAGE - 3 ON A PERUSAL OF THE ABOVE GROUNDS, IT IS CLEAR THAT ASSESSEE HAS NOT RAISED GROUND OF WRONG RECORDING OF ADMISSION BY THE ASSES SEE DURING THE PROCEEDING BEFORE AO. AO HAS RECORDED IN THE ASSESS MENT ORDER THAT THE LD. AR HAS AGREED FOR THE ADDITION. THE ASSESSEE I N THE PROCEEDINGS BEFORE THE AO HAS SUBMITTED THAT THE ASSESSEE HAS AGREED T O FILE RETURN OF INCOME SHOWING THE NET PROFIT BEFORE REMUNERATION AND INTE REST OF RS.1,35,00,000/- IN THE SWORN STATEMENT MADE AT THE TIME OF SURVEY A ND HAS ACCORDINGLY CREDITED A SUM OF RS.44,50,000/- REPRESENTING INVES TMENT MADE TOWARDS LAND AT YELAHANKA FOR THE PROPOSED NEW PROJECT AND ARRIVED AT AN INCOME OF RS.1,35,00,000/-. 04. BEFORE THE CIT (A), THE ASSESSEE HAD MADE A SUB MISSION THAT THE TELESCOPING OF AN AMOUNT OF RS.52,63,098/- IS REQUI RED TO BE DONE AS THE AMOUNT WHICH WAS AGREED OF RS.44,50,000/- WAS FORMI NG A PART AND PARCEL OF RS.52,63,098/-. THE CIT (A) HAD ALSO TAKEN ON R ECORD AN AFFIDAVIT FILED BY THE LD. AR ON 16.09.2013, WHICH WAS DULY ATTESTE D BY THE NOTARY PUBLIC ITA.32/BANG/2014 PAGE - 4 AND HAS DELETED THE ADDITION OF RS.44,50,000/-. TH E REVENUE IS THUS IN APPEAL BEFORE US. 05. BEFORE US THE LD. DR SUBMITTED THAT THE ORDER P ASSED BY THE CIT (A) IS WITHOUT ANY BASIS AS THE SUM AGREED DURING THE C OURSE OF SURVEY WAS ON ACCOUNT OF INVESTMENT IN THE FORM OF ADVANCE MADE F OR PURCHASE OF LAND AT YELAHANKA FOR THE NEW PROJECT, WHEREAS THE ADDITION MADE BY THE AO WAS ON ACCOUNT OF THE DISCREPANCY NOTICED IN THE PURCHA SES SHOWN BY THE ASSESSEE AS MENTIONED IN THE TABLE REPRODUCED IN AO ORDER . 06. ON THE OTHER HAND THE LD. AR HAS SUPPORTED THE ORDER PASSED BY THE CIT (A) ON THE STRENGTH THAT THE AMOUNT AGREED TO B E SHOWN IN THE RETURN OF INCOME WAS NOTHING BUT THE SAME AMOUNT WHICH WAS SH OWN AS DISCREPANCY BY THE AO. 07. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL. THE LETTER DT.08.12.2009 AND OTHER LETTERS FILED BY THE ASSESSEE BEFORE THE AO CLEARLY SHOWN THAT THE AMOUNT AGREED TO BE DECLARED AT THE TIME OF SURVEY WAS TOWARDS THE INVESTMENT IN ADVANCES FOR THE PURC HASE OF YEHALANKA PROPERTY, WHEREAS THE AMOUNT DEBITED IN THE P & L A CCOUNT TOWARDS EIGHT PERSONS WERE WITH RESPECT OF PLYWOOD, GLASS WORK, T IMBER ETC., FOR READY REFERENCE, WE ARE REPRODUCING HEREIN BELOW THE TABL E AS GIVEN IN PAGE 3 OF THE ASSESSMENT ORDER : ITA.32/BANG/2014 PAGE - 5 08. THE DISCREPANCIES POINTED OUT BY THE AO ARE NOT RELATABLE TO ANY ADVANCES / INVESTMENT MADE BY THE ASSESSEE IN THE Y ELAHANKA PROJECT, BUT THEY ARE IN RESPECT OF THE CONSTRUCTION ACTIVITY. THEREFORE BOTH THE SUMS OPERATE IN DIFFERENT FIELDS AND ARE NOT OVERLAPPING WITH EACH OTHER. IN VIEW OF THE ABOVE, THE JUSTIFICATION GIVEN BY THE CIT (A ) IS NOT IN ACCORDANCE WITH LAW. FURTHER IN OUR OPINION THE FINDING OF TH E AO CANNOT BE DISPUTED MERELY ON THE BASIS OF THE AFFIDAVIT FILED BY THE L D. AR, AFTER A PERIOD OF TWO YEARS. ADMITTEDLY THE ASSESSMENT ORDER WAS PAS SED ON 23.12.2011 AND THE AFFIDAVIT WAS FILED ON 16.09.2013. FURTHER THE RE IS NO GROUND BEFORE THE CIT (A) TO THE EFFECT THAT THE ADMISSION RECORDED B Y THE AO WAS NOT IN ACCORDANCE WITH LAW OR THE ASSESSEE/ LD. AR HAD EVE R AGREED FOR SUCH ADDITION. BESIDE THE ABOVE THE CIT (A) CANNOT GIVE A FINDING ON THE BASIS OF THE AFFIDAVIT FILED BY AR, AT THE BACK OF THE AO , CONTRADICTING THE ITA.32/BANG/2014 PAGE - 6 PROCEEDING TAKEN PLACE BEFORE AO, WITHOUT SEEKING R EPORT/ RESPONSE FROM THE AO. 09. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER PASSED BY THE CIT (A) IS REQUIRED TO BE CANCELLED A ND THE ADDITION MADE BY THE AO IS CONFIRMED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DAY OF NOVEMBER, 2017. SD/- SD/- (INTURI RAMA RAO) (LALIT KUMAR) ACCOUNTANT MEMBER JUDICIAL M EMBER BENGALURU DATED : 11.2017 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY