ACIT, New Delhi V. M/s AKME Projects Ltd., New Delhi

ITA 3276/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53361 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-12-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 17-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H L DHIJANA
• Assessee Lawyers: A K AGGARWAL
• Keywords: Business income; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.3276/DEL/2011 ASSESSMENT YEAR : 2008-09 THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-17, JHANDEWALAN, NEW DELHI. VS. M/S AKME PROJECTS LTD., B-1/E-3, MOHAN CO-OPERATIVE INDUSTRIAL ESTATE, MATHURA ROAD, NEW DELHI 44. PAN : AAFCA4671F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. AGGARWAL, CA REVENUE BY : SHRI H.L. DHIJANA, CIT, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 6 TH APRIL, 2011 FOR ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LE ARNED CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.39,52 ,293/- MADE ON ACCOUNT OF SETTING OFF THE LOSS FROM READING IN COMM ODITIES AGAINST BUSINESS INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LE ARNED CIT (A) HAS ERRED IN IGNORING THE FACT THAT THE LOSS BEI NG SPECULATIVE IN NATURE CAN ONLY BE SET OFF AGAINST THE PR OFIT OF THE SPECULATIVE BUSINESS INCOME. 3. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. ITA NO.3276/DEL/2011 2 (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 2. A SEARCH OPERATION WAS CARRIED OUT AT THE PREMISES O F THE ASSESSEE INCLUDING THE GROUP CONCERNS. A SURVEY WAS ALSO C ONDUCTED ON 19-20 TH FEBRUARY, 2008 ON VARIOUS PREMISES AND GROUP CONCERNS OF THE ASSESSEE. DURING THE COURSE OF SURVEY, ON THE BASIS OF VARIOUS DOCUMENTS/PAPERS/SOFT COPIES OF THE DATA, THE ASSESSEE DECL ARED A SUM OF ` 15 CRORE AS ADDITIONAL BUSINESS INCOME IN THE H ANDS OF VARIOUS BUSINESS CONCERNS OF THE ASSESSEE GROUP VIDE LETTER DATED 1 0 TH MARCH, 2008 THE COPY OF WHICH HAS BEEN PLACED AT PAGE 59 OF THE PAPER BOOK. ON THE BASIS OF THE DECLARATION, IT IS THE CASE OF THE ASSESSEE THAT THE ENTIRE ` 15 CRORE WAS DECLARED IN ITS HANDS AND ACCORD INGLY THE RETURN OF INCOME WAS FILED AT ` 18,37,88,691/-. HOWEVER, W HILE ASSESSING THE INCOME OF THE ASSESSEE, THE ASSESSING OFFICER FOUND THAT TH E ASSESSEE HAD CLAIMED SET OFF OF LOSS FROM TRADING IN COMMODITIE S AMOUNTING TO `39,52,293/- AGAINST BUSINESS INCOME. THE ASSESSING OFFICER TREATED THAT SUCH LOSS IS OF SPECULATIVE NATURE, HENCE COULD NOT BE SET OFF AGAINST BUSINESS INCOME. HE, THEREFORE, ADDED THE SAID SU M TO THE INCOME OF THE ASSESSEE AND HAS ASSESSED THE INCOME OF THE ASSE SSEE AT ` 18,77,40,980/-. THE ADDITION WAS CHALLENGED BY THE ASSESSEE BEFORE THE CIT (A). IT WAS CONTENDED THAT THE ASSESSEE H AD TRANSFERRED 58 FLATS HAVING MUTUALLY AGREED VALUE AT ` 18,08,31, 794/- IN FAVOUR OF M/S BLK REALITY PVT. LTD. AGAINST WHICH CLAIM OF HAVI NG INCURRED ` 17 CRORE ON VARIOUS PROJECTS OF THE ASSESSEE COMPANY. THE A SSESSEE COMPANY RECOGNIZED TOTAL VALUE OF SALES OF SUCH FLATS I N ITS PROFITS AND LOSS ACCOUNT AT ` 18,08,31,794/- AS AGAINST THE EARLIER SALE VALUE SHOWN AT `. 4,50,00,000/- THEREBY OFFERING AN ADDITIONAL INCOME TO THE EXTENT OF ` 13,58,31,794/-. THE SAID ACCRETION FORMED PART OF THE OVERALL AGREED INCOME OF ` 15 CRORE AS OFFERED VOLUNTARILY B Y THE ASSESSEE AFTER THE SURVEY. THE BALANCE AMOUNT OF ` 1,41,68,2 06/- WAS OFFERED ITA NO.3276/DEL/2011 3 DIRECTLY IN THE COMPUTATION OF INCOME TO COVER ANY DEFICIENCY OR DISCREPANCIES OR OTHER INVESTMENTS/EXPENDITURE, ETC. T HUS, IT WAS PLEADED BY THE ASSESSEE THAT FURTHER DISALLOWANCE OF ` 3 9,52,293/- BEING LESS THAN THE AMOUNT ADDITIONALLY OFFERED FOR T AX OF ` 1,41,68,206 ON ACCOUNT OF THERE BEING NO OTHER DISCREPANCY, SHOUL D HAVE BEEN CONSIDERED TO BE COVERED BY THE SAID ADDITIONAL ADDIT ION AND, THEREFORE, THE ADDITION OF ` 39,52,293/- WAS NOT CAL LED FOR. SUCH SUBMISSIONS OF THE ASSESSEE WERE FORWARDED BY THE CIT (A) T O THE ASSESSING OFFICER VIDE LETTER DATED 20 TH JANUARY, 2011 FOR HIS COMMENTS WITHIN TEN DAYS, BUT, NO COMMENTS WERE RECEIVED FROM THE ASSESSING OFFICER. IT IS OBSERVED BY CIT (A) THAT THE WRITTEN SUBMISSIONS OF THE ASSESSEE DO NOT CONTAIN ANY ADDITIONAL EVIDENCE. THERE FORE, HE PROCEEDED TO DECIDE THE APPEAL FILED BY THE ASSESSEE ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. LEARNED CIT (A) AFTER REPRODUCING THE SUBMISSIONS OF THE ASSESSEE IN LETTER DATED 10 TH MARCH, 2008 VIDE WHICH THE ASSESSEE HAD OFFERED ADDITIONAL INCOME OF ` 1 5 CRORE HAS COME TO THE CONCLUSION THAT IN VIEW OF THE ADDITIONA L AMOUNT TAKEN BY THE ASSESSEE OF ` 1,41,68,206/- WHICH DID NOT EXCEED T HE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF ` 39,52,293/-, THE ADD ITION MADE BY THE ASSESSING OFFICER WAS NOT CALLED FOR. IT IS AGAINST TH ESE FINDINGS RECORDED BY THE CIT (A), THE DEPARTMENT HAS FILED TH E AFOREMENTIONED GROUNDS OF APPEAL. 3. AFTER NARRATING THE FACTS, RELYING UPON THE OBSERV ATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, IT WAS PLEADED BY THE LEARNED DR THAT THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND IT HAS WRONGLY BEEN DELETED BY THE CIT (A). 4. ON THE OTHER HAND, TAKING US THROUGH THE RELEVANT PAGES FILED IN THE PAPER BOOK, IT IS THE CASE OF THE LEARNED AR THAT LEARNED CIT (A) HAS RIGHTLY DELETED THE ADDITION AS THE ADDITIONAL INCOM E OFFERED BY THE ITA NO.3276/DEL/2011 4 ASSESSEE OF ` 1,41,68,206/- WAS SUFFICIENT TO COVER THE D ISCREPANCY, HENCE, NO ADDITION COULD BE MADE TO THE INCOME OF T HE ASSESSEE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. COPY OF THE COMPUTATI ON OF INCOME HAS BEEN FILED BY THE ASSESSEE AT PAGE 55 OF THE PAPER BOOK IN WHICH THE ASSESSEE HAS DECLARED ADDITIONAL BUSINESS INCOME OF ` 1,4 1,68,206/-. WE HAVE ALSO CAREFULLY GONE THROUGH THE LETTER FILED BY THE ASSESSEE DATED 3 RD MARCH, 2008 VIDE WHICH THE OFFER FOR ADDITIONAL IN COME OF ` 15 CRORE WAS MADE. WE HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY OT HER DISCREPANCY IN ANY OF THE DOCUMENTS FOUND AT THE TIME OF SURVEY. THE ASSESSEE, IN ORDER TO MAKE ITS OFFER AN HONEST ATTEMPT, A PART FROM DECLARING THE DISCREPANCY HAD OFFERED AN ADDITIONAL SUM OF ` 1,41,68,206/- JUST TO COMPLETE THE FIGURE OF `15 CRO RE. THE AMOUNT ADDED BY THE ASSESSING OFFICER OF ` 39,52,293/- DOES NOT EXCEED THAT AMOUNT. THEREFORE, IN OUR OPINION, LEARNED CIT (A) HAS TAKEN A RIGHT VIEW THAT THE AFOREMENTIONED AMOUNT SHOULD HAVE BEEN CONSIDERED TO BE EMBEDDED IN THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE. WE FIND NO INFIRMITY IN THE VIEW TAKEN BY THE CIT (A) AND, THEREFORE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT (A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.12.20 11. SD/- SD/- [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 28.12.2011. DK ITA NO.3276/DEL/2011 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES