ITO 9(1)(4), MUMBAI V. FOBEOZ INDIA P. .LTD, MUMBAI

ITA 326/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1642 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 12-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 326/MUM/2012 ASSESSMENT YEAR :2006-07 INCOME TAX OFFICER WARD 9(1)(4) ROOM NO.224 AAYAKAR BHAVAN MUMBAI-400 020. VS. M/S. FOBEOZ INDIA (P) LTD. FOBEOZ TOWERS, SHEETAL APTS. RAMCHANDER LANE KANCHPADA MALAD MUMBAI. PAN NO. AAACF 9720 B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI OM PRAKASH MEENA RESPONDENT BY : NONE DATE OF HEARING : 08.01.2013 DATE OF PRONOUNCEMENT : 08.01.2013 O R D E R PER RAJENDRA SINGH, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 2.11.2011 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07. THE ONLY DI SPUTE RAISED IS REGARDING ADDITION MADE BY THE AO AMOUNTING TO RS.10,02,741/- ON ACCOUNT OF ACCRUED INTEREST. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S. KUBER DEVELOPERS ON 25.1.2007 W HICH WAS REGISTERED ON THE ITA NO.326/M/12 A.Y. 06-07 2 SAME DATE AND SUBSEQUENTLY A SUPPLEMENTARY AGREEMEN T WAS ALSO ENTERED INTO ON 31.7.2006. IN TERMS OF THE SAID AGREEMENT M/S. KUBE R DEVELOPERS HAD AGREED TO PAY INTEREST TO THE ASSESSEE ON ADVANCE OF RS.7.00 CRORES @ 12% AND REIMBURSEMENT OF EXPENSES WHICH WERE AGGREGATELY QU ANTIFIED AT RS.8,21,58,172/- ON THE DATE OF SUPPLEMENTARY AGREEMENT. THUS, A SUM OF RS.1,21,58,172/- WAS DUE TO THE ASSESSEE ON 31.7.2006 AND FUTURE INTEREST FO R THE SUBSEQUENT PERIOD. THE AO IN THE ORDER FOR ASSESSMENT YEAR 2007-08 OBSERVED T HAT THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THEREFORE, THE ACCRUED INTEREST INCOME WAS ASSESSABLE EVEN IF THE ASSESSEE MAY NOT HAVE RECEIV ED THE ENTIRE INTEREST. THE AO COMPUTED ACCRUED INTEREST IN ASSESSMENT YEAR 2006-0 7 AT RS.10,02,761/- AND FOR THE ASSESSMENT YEAR 2007-08 AT RS.1,87,21,822/-. TH E AO ACCORDINGLY ADDED THE SUM OF RS.1,87,19,081/- IN ASSESSMENT YEAR 2007-08. BASED ON THE ORDER OF AO IN 2007-08, THE ASSESSMENT IN 2006-07 IN WHICH THE ASS ESSEE HAD NOT OFFERED INTEREST INCOME, WAS RE-OPENED AND THE AO MADE AN ADDITION O F RS.10,02,741/- IN APPEAL CIT(A) NOTED THAT IDENTICAL ADDITION MADE OF RS.1,7 7,19,081/- IN RELATION TO SUM ADVANCED HAD BEEN DELETED BY THE TRIBUNAL IN THE YE AR 29.7.2011 IN ITA NO.9231/MUM/2010 FOR ASSESSMENT YEAR 2007-08. CIT(A ), THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 200 7-08 DELETED THE ADDITION AGGRIEVED BY WHICH REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING OF APPEAL, NO ONE APPEARE D ON BEHALF OF THE ASSESSEE THOUGH NOTICE OF HEARING WAS GIVEN WELL IN ADVANCE. WE, THEREFORE, PROCEED TO ITA NO.326/M/12 A.Y. 06-07 3 DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABL E ON RECORD AND AFTER HEARING THE LD. DR WHO PLACED RELIANCE ON THE ORDER OF AO. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE IS REGARDING ASSESSMENT OF INTEREST INCOME ON ACCRUAL BASIS IN RELATION TO ADVANCE OF RS.7.00 CRORES GIVEN BY ASSESSEE TO M/S. KUBER DEVELOPERS. THE ASSESSMENT OF ACCRUED INTEREST HAD BEEN MADE THIS Y EAR ON THE BASIS OF SIMILAR ASSESSMENT OF ACCRUED INCOME IN 2007-08 IN RELATION TO THE SAME ADVANCE. WE FIND THAT ADDITION MADE IN ASSESSMENT YEAR 2007-08 HAD B EEN CONSIDERED BY THE TRIBUNAL IN THE ORDER DATED 29.7.2011 IN ITA NO.923 1/MUM/2010 AND THE TRIBUNAL AFTER DETAILED EXAMINATION DELETED THE ADDITION MAD E. FACTS THIS YEAR ARE IDENTICAL AS THE IDENTICAL ADDITION HAS BEEN MADE THIS YEAR O N THE BASIS OF ADDITION MADE IN ASSESSMENT YEAR 2007-08 IN RESPECT OF THE SAME ADVA NCE. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION THE TRIBUNAL IN ASSESSMENT YEAR 2007-08 (SUPRA) CONFIRM THE ORDER OF CIT(A) ALLOWING RELIEF TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2013. SD/- SD/- ( AMIT SHUKLA ) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 08.01. 2013. JV. ITA NO.326/M/12 A.Y. 06-07 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.