S. D. CORPORATION PRIVATE LIMITED, MUMBAI V. PRINCIPAL COMMISSIONER OF INCOME TAX - 3, MUMBAI

ITA 3311/MUM/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8148 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2013-2014
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B B RAJENDRA PRASAD
• Assessee Lawyers: D V LAKHANI
• Keywords: Principle of natural justice; Competent authority; Assessment record
• Section: 143(3); 14A; 263

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL G B ENCH MUMBAI BEFORE SHRI PAWAN SINGH JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO. 3311/MUM/2018 (ASSESSMENT YEAR 2013-14 ) S.D. CORPORATION PRIVATE LTD., S.P. CENTRE, 41-44, MINU DESAI MARG, MUMBAI- 400005. PAN: AADCS4496C VS. PCIT-3, 612, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI-400020. APPELLANT RESPONDE NT APPELLANT BY : SH. D.V. LAKHANI (AR) RESPONDENT BY : SH. B.B. RAJENDRA PRASAD (CIT-DR) DATE OF HEARING : 20.11.2018 DATE OF PRONOUNCEMEN T : 26.12.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX-3 (PCIT), MUMBAI PASSED UNDER SECTION 263 OF THE INCOME TAX ACT DATED 27.03.2018. THE ASSESSE E HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE ORD ER PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX IS BAD IN LAW AS THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS WRONGLY INVOKED THE PROVISIONS OF SECTION 263 OF INCOME TAX ACT, 1961. THE APPELLANT PRAYS TH AT THE ORDER PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX MAY BE CANCELLED. 2. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEA RNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS ERRED IN CONCLUDING THAT THE ORDER PASSED BY ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 2 THE LEARNED ASSESSING OFFICER IS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE. THE APPELLANT PRAYS THAT THE CONCLUSIO N REACHED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX IS ERRONEOUS A ND CONTRARY TO THE FACTS OF THE CASE. 3. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE APP ELLANT PRAYS THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS ER RED IN CONCLUDING THAT IN RESPECT OF THE UNSOLD FLATS THE LEARNED ASSESSIN G OFFICER SHOULD HAVE CONSIDERED THE CALCULATION OF INCOME FROM HOUSE PRO PERTY. THE AMENDMENT IN THE LOW IS EFFECTIVE FROM 1/4/2018 AND NOT APPLICAB LE TO A.Y. 2013-14 AND IN VIEW OF THIS IT CANNOT BE CONSTRUED THAT ORDER PASS ED BY THE LEARNED ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF THE REVENUE. THE APPELLANT PRAYS THAT PROVISIONS OF SECTION 23 ARE N OT APPLICABLE IN RESPECT OF THE UNSOLD FLATS. THE APPELLANT PRAYS THAT ORDER PA SSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX U/S. 263 WITH REFERENCE TO COMPUTATION OF INCOME FROM HOUSE PROPERTY IS NOT JUSTIFIED AND BE DELETED. 4. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE COM PLETE INFORMATION ABOUT THE UNSOLD FLATS WAS AVAILABLE WITH THE ASSESSING OFFIC ER DURING THE ASSESSMENT PROCEEDINGS AND HE WAS AWARE ABOUT THE FACT OF UNSO LD FLATS AS ON 31/3/2013. AS THE PROVISIONS OF SECTION 23 WERE NOT APPLICABLE THE APPELLANT DID NOT OFFER THE INCOME AND THE LEARNED ASSESSING OFFICER DID NO T INVOKED THE PROVISIONS OF SECTION 23. IN VIEW OF THIS THE APPELLANT PRAYS THAT ORDER PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX U/S. 263 WITH REFERENCE TO COMPUTATION OF INCOME FROM HOUSE PROPERTY IS NOT JUSTIFIED AND BE DELETED. 5. ON THE FACTS & CIRCUMSTANCES OF THE CASE REGARDI NG INVOKING THE PROVISIONS OF SECTION 263 IN RESPECT THE APPLICABILITY OF THE PROVISIONS OF SECTION 36(1)(III) OF INCOME TAX ACT, 1961 IN RESPECT OF TH E PAYMENTS MADE TO PRS DEVELOPERS, THE LEARNED ASSESSING OFFICER THE ORIGI NAL ASSESSMENT PROCEEDINGS APPLIED HIS MIND AND HAS COMPUTED THE D ISALLOWANCE OF RS. 14.27 CRORES. THE LEARNED PRINCIPAL COMMISSIONER OF INCOM E TAX HAS WRONGLY CONCLUDED THAT THE LEARNED ASSESSING OFFICER DOES N OT INQUIRE INTO THE APPLICABILITY OF THE PROVISIONS OF SECTION 36(1)(II I). THE CONCLUSION REACHED BY ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 3 THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX IS ERRONEOUS AND CONTRARY TO THE FACTS. 6. DURING THE REVISION PROCEEDINGS BEFORE THE LEARN ED PRINCIPAL COMMISSIONER OF INCOME TAX THE APPELLANT HAS ESTABLISHED AND PRO VED THAT THERE IS NO ERROR IN THE ORDER OF THE LEARNED ASSESSING OFFICER DISALLOW ING THE INTEREST TO THE EXTENT OF RS. 14.27 CRORES. THE LEARNED PRINCIPAL C OMMISSIONER OF INCOME TAX HAS NOT CONSIDERED THE EXPLANATION AND THE WORK ING SUBMITTED BEFORE HER AND HAS WRONGLY CONCLUDED THAT ON THE ISSUE OF THE CALCULATION OF INTEREST THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER IS ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 7. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS ERRED IN IGNORING THE FACT THAT THE APPELLANT HAS FILED THE APPEAL BE FORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AGAINST THE OR IGINAL DISALLOWANCE OF RS. 14.27 CRORES MADE BY THE LEARNED ASSESSING OFFI CER U/S. 36(1)(III). THE APPELLANT PRAYS THAT ORDER PASSED BY THE LEARNED PR INCIPAL COMMISSIONER OF INCOME TAX TREATING THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER HAS ERRONEOUS AND PREJUDICIAL TO THE REVENUE IS NOT JUS TIFIED. 8. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE APP ELLANT PRAYS THAT ORDER PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INC OME TAX MAY BE SET ASIDE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A BUILDER AND DEVELOPER, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013 -14 ON 30.09.2013 DECLARING TOTAL INCOME AT RS. 28,94,92,970/-. THE R ETURN OF INCOME WAS SELECTED FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED ON 24.02.2016 UNDER SECTION 143(3) OF THE ACT. THE ASSESSING OFFICER WH ILE PASSING THE ASSESSMENT ORDER MADE ADDITION OF INTEREST EXPENDIT URE OF RS. 14.27 CRORE AND DISALLOWANCE UNDER SECTION 14A OF RS. 14,851/-. THE ASSESSMENT ORDER ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 4 WAS REVISED BY LD. PCIT BY INVOKING THE PROVISIONS OF SECTION 263 VIDE ITS ORDER DATED 27.03.2018. THE LD. PCIT ISSUED SHOW-CA USE NOTICE UNDER SECTION 263 DATED 28.02.2017 FOR PROPOSED REVISION ON TWO ISSUES I.E. (I) THAT ASSESSEE HAS SHOWN UNSOLD FLAT OF RS. 66.39 CR ORE IN CLOSING STOCK. HOWEVER, THE ASSESSEE HAS NOT OFFERED ANY INCOME FR OM THE SAID UNSOLD FLATS UNDER THE HEAD INCOME FROM HOUSE PROPERTY I N ITS COMPUTATION OF INCOME. THE ASSESSING OFFICER SHOULD HAVE CONSIDERE D THE UNSOLD FLAT FOR TAXING AT LEAST 8% OF THE VALUE OF THE STOCK AS INC OME OF THE ASSESSEE FROM THE SAID FLATS IN VIEW OF THE DECISION OF HONBLE D ELHI HIGH COURT IN ANSAL LEASING HOUSING FINANCIAL AND LEASING COMPANY LTD. [2013] 203 TAXMANN.COM 143. AND NO. (II) THE ASSESSING OFFICER WHILE WORKING THE INTEREST DISALLOWANCE UNDER SECTION 35(1)(III) IN R ESPECT OF PAYMENT MADE TO PRS DEVELOPER HAS TAKEN THE OPENING VALUE OF CLOSI NG WORK IN PROGRESS (CWIP) OF KANDIVALI PROJECT AS ON 01.04.2012 AT RS . 739.56 CRORE, WHEREAS THE CLOSING WORK OF KANDIVALI PROJECT AS ON 31.03.2012 STOOD AT RS. 720.2 CRORE. THUS, INCORRECT ADOPTION OF CAPITA L WORK-IN-PROGRESS HAS RESULTED IN EXCESS CARRY FORWARD OPENING WRITTEN DO WN VALUE (WDV) OF RS. 19.32 CRORE LEADING TO UNDERSTATEMENT OF INCOME TO THE SAME EXTENT OF COMPLETION OF PROJECT. THEREFORE, THE LD. PCIT ISSU ED SHOW-CAUSE NOTICE. 3. THE ASSESSEE FILED ITS REPLY AND CONTESTED THE NOTI CE OF REVISION VIDE ITS REPLY DATED 28.12.2017. IN THE REPLY, ON FIRST ISSU E THE ASSESSEE CONTENDED THE COMPUTATION OF INCOME FROM HOUSE PROPERTY THA T THE INVENTORY OF ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 5 UNSOLD FLAT IS DULY REFLECTED IN AUDITED FINANCIAL STATEMENT. THE ASSESSING OFFICER AFTER CONSIDERING THE FACT THAT NO INCOME U NDER THE HEAD INCOME FROM HOUSE PROPERTY NEEDS TO BE TAXED IN RESPECT O F UNSOLD INVENTORY. THE ASSESSEE ALSO CONTENDED THAT SUB-SECTION (5) OF SEC TION 23 IS INSERTED W.E.F. ASSESSMENT YEAR 2018-19 WHICH PROVIDES THAT THE ANN UAL VALUE OF PROPERTY OR A PART OF PROPERTY FOR THE PERIOD OF ONE YEAR FR OM THE END OF FINANCIAL YEAR IN WHICH CERTIFICATE OF COMPLETION OF CONSTRUC TION OF THE PROPERTIES OBTAINED FROM THE COMPETENT AUTHORITY, SHALL BE TAK EN TO BE NIL. THE AMENDMENT MADE IN SECTION 23(5) IS EFFECTIVE ONLY F ROM ASSESSMENT YEAR 2018-19 AND NOT RETROSPECTIVELY. IT WAS FURTHER CON TENDED THAT THE UNSOLD FLAT IS STOCK-IN-TRADE AND NO INCOME CHARGEABLE TO TAX SHOULD BE DETERMINED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE AS SESSEE THEREFORE, CANVASSED THAT THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEW. THE ORDER OF ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. AS THERE IS NO CERTAINTY AS TO WHETHER THE SAID INCOME IS TAXABLE TO TAX OR NOT. THEN, THE DECISION OF ASS ESSING OFFICER NOT TAXED SUCH INCOME, HENCE, CANNOT BE CONSTRUED THAT ORDER PASSED BY ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF REVENUE. ON SECOND ISSUE REGARDING INTEREST DISALLOWANCE, THE ASSESSEE VIDE ITS REPLY DATED 22.05.2017 CONTENDED THAT THE ASSESSING OFFICER HAS CORRECTLY WORKED OUT THE CAPITAL WORK-IN-PROGRESS. THE DETAILS OF THE SA ME WERE GIVEN TO THE ASSESSING OFFICER. THERE IS NO MISTAKE IN CALCULATI NG THE CAPITAL WORK-IN- ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 6 PROGRESS AND THAT NO EXCESS CAPITAL WORK-IN-PROGRES S FORWARDED IN THE SUBSEQUENT ASSESSMENT YEARS. THUS, THE ORDER PASSED BY ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERES T OF REVENUE. 4. THE ASSESSEE FURTHER EXPLAINED THAT AS PER NOTICE T HAT WORK-IN-PROGRESS AS ON 31.03.2012 WAS RS. 733.46 AFTER DISALLOWING INTE REST OF RS. 13.22 CRORE. THE CLOSING WORK-IN-PROGRESS (CWIP) SHOULD HAVE BEE N RS. 720.24 CRORE. ACCORDING TO NOTICE UNDER SECTION 263 THE CWIP AS O N 01.04.2012 SHOULD HAVE BEEN TAKEN AT RS. 720.24 CRORE WHEREAS THE ASS ESSING OFFICER HAS TAKEN CWIP AT RS. 739.56 CRORE. THUS, AS PER THE NO TICE, THERE IS A MISTAKE IN DETERMINING THE OPENING CWIP AS ON 01.04.2012 AN D CONSEQUENTLY THE CWIP IS CARRY FORWARD MORE FOR RS. 19.32 CRORE. THE ASSESSEE EXPLAINED THAT ASSESSING OFFICER HAS TAKEN CWIP AS PER THE BO OKS OF ACCOUNT AT RS. 739.56 CRORE TO REDUCE THE INTEREST ALREADY DISALLO WED AT RS. 27.66 CRORE AND DETERMINED CLOSING CWIP AS ON 31.03.2012 AT RS. 711.90 CRORE AND FURNISHED THE BREAKUP OF THE LD PCIT. IT WAS EXPLAI NED THAT RS. 27.66 CRORE INCLUDES INTEREST DISALLOWANCE FOR ASSESSMENT YEAR 2012-13 AMOUNTING TO RS. 13.2 CRORE. THUS, THE ASSESSEE CANVASSED THAT T HERE IS NO MISTAKE IN DETERMINING THE CWIP AS ON 31.03.2013. THE ASSESSIN G OFFICER HAS TAKEN STARTING FIGURE OF RS. 739.66 CRORE AND REDUCED INT EREST DISALLOWANCE OF RS. 27.66 CRORE, HOWEVER, IN THE NOTICE UNDER SECTION 2 63, THE OPENING FIGURE IS TAKEN AS PER ASSESSMENT ORDER. AS PER THE WORKING I N SHOW-CAUSE NOTICE THE OPENING CWIP ON 01.04.2012 SHOULD BE RS. 720.24 CRO RE, WHEREAS THE ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 7 OPENING CWIP DETERMINED BY ASSESSING OFFICER IS RS. 711.90 CRORE. THE ASSESSING OFFICER HAS CORRECTLY WORKED OUT OPENING CWIP AT RS. 711.9 CRORE AND HAS REDUCED RS. 14.27 CRORE INTEREST ATTR IBUTABLE FOR ASSESSMENT YEAR 2013-14 ACCORDING TO INTEREST ATTRIBUTABLE FOR ASSESSMENT ORDER PASSED BY ASSESSING OFFICER CANNOT BE CONSIDERED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. 5. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY LD. PCIT. FOR FIRST ISSUE THE LD. PCIT CONCLUDED THAT THE ASSESSEE SHOULD HAVE OF FERED INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN RESPECT OF UNS OLD FLAT. IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN ANSAL H OUSING FINANCIAL AND LEASING COMPANY LTD. (SUPRA). THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY, THUS, THE ASSESSMENT ORDER IS ERRONEOUS AN D SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS ISSUE. FOR SECOND ISSUE THE LD. PCIT CONCLUDED THAT THE ASSESSEE HAS SUBMITTED THAT ON T HIS ISSUE THERE IS NO ERROR AND ORDER IS NOT PREJUDICIAL TO THE INTEREST OF REV ENUE. THE LD PCIT FURTHER CONCLUDE THAT ON PERUSAL OF ASSESSMENT ORDER INDICA TES THAT ASSESSING OFFICER HAS NOT ENQUIRED THE ISSUE IN ACCORDANCE WI TH THE PROVISION OF SECTION 36(1)(III) WITH THE AMOUNT ADOPTED FOR CALC ULATION VIZ. THE EARLIER YEARS RECORD AND FACTS OF THE CASE. THUS, THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. PCI T DIRECTED THE ASSESSING OFFICER TO ENQUIRE INTO THE FACT OF THE CASE AND CO MPUTATION OF DISALLOWANCE. KEEPING IN VIEW THE PROVISIONS OF SEC TION 36(1)(III) BY ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 8 GRANTING SUFFICIENT OPPORTUNITY OF HEARING TO THE A SSESSEE. AGGRIEVED BY THE ORDER OF LD. PCIT, THE ASSESSEE HAS FILED THE PRESE NT APPEAL BEFORE US. 6. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) F OR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. A R OF THE ASSESSEE SUBMITS THAT DURING THE ASSESSMENT PROCEEDING COMPL ETE DETAILS WERE FURNISHED TO THE ASSESSING OFFICER REGARDING BOTH T HE ISSUES SOUGHT TO BE REVISED BY LD. PCIT. THE ASSESSING OFFICER AFTER EX AMINING BOTH THE ISSUES HAS TAKEN A POSSIBLE VIEW. THUS, THE ORDER PASSED B Y ASSESSING OFFICER IS NOT ERRONEOUS AND IN VIEW OF THE LAW LAID DOWN BY H ONBLE APEX COURT IN CIT VS. MAX INDIA LTD. [166 TAXMAN 188 (SC) NO REVI SION IS PERMISSIBLE. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT SUB -SECTION (5) OF SECTION 23 IS INSERTED BY FINANCE ACT 2017 AND APPLICABLE W.E. F. 01.04.2018 ONLY. THUS, THE PROVISION NOT APPLICABLE FOR THE YEAR UND ER CONSIDERATION. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT IN SO FAR A S THE DECISION OF ANSAL LEASING HOUSING FINANCIAL AND LEASING COMPANY LTD. (SUPRA) REFERRED AND RELIED BY LD. PCIT. THE LD. AR OF THE ASSESSEE SUBM ITS THAT THERE IS ANOTHER DECISION OF HONBLE GUJARAT HIGH COURT IN NEHA BUIL DERS VS. CIT (154 TAXMAN 342 (GUJ.), WHEREIN IT WAS HELD THAT A PROPE RTY IS USED AS STOCK- IN-TRADE THEN SAID PROPERTY WOULD BECOME OR PARTAKE CHARACTER OF STOCK AND ANY INCOME DERIVED FROM SUCH STOCK WOULD BE INCOME FROM BUSINESS AND NOT FROM INCOME FROM HOUSE PROPERTY. THEREFORE, T HE ISSUE IS DEBATABLE ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 9 ISSUE AND THE ASSESSING OFFICER HAS TAKEN ONE OF TH E POSSIBLE VIEWS. THEREFORE, THE ASSESSMENT ORDER BEYOND THE PURVIEW OF REVISION. 7. ON SECOND ISSUE THE LD. AR OF THE ASSESSEE SUBMITS THAT THAT THE ASSESSING OFFICER HAS CORRECTLY WORKED OUT THE CAPITAL WORK-I N-PROGRESS. THE DETAILS OF THE SAME WERE GIVEN TO THE ASSESSING OFFICER. TH ERE IS NO MISTAKE IN CALCULATING THE CAPITAL WORK-IN-PROGRESS AND THAT N O EXCESS CAPITAL WORK-IN- PROGRESS FORWARDED IN THE SUBSEQUENT ASSESSMENT YEA RS. THUS, THE ORDER PASSED BY ASSESSING OFFICER IS NEITHER ERRONEOUS NO R PREJUDICIAL TO THE INTEREST OF REVENUE. 8. THE ASSESSEE FURTHER EXPLAINED THAT AS PER NOTICE T HAT WORK-IN-PROGRESS AS ON 31.03.2012 WAS RS. 733.46 AFTER DISALLOWING INTE REST OF RS. 13.22 CRORE. THE CLOSING WORK-IN-PROGRESS SHOULD HAVE BEEN RS. 7 20.24 CRORE. ACCORDING TO NOTICE CWIP AS ON 01.04.2012 SHOULD HA VE BEEN TAKEN AT RS. 720.24 CRORE WHEREAS THE ASSESSING OFFICER HAS TAKE N CWIP AT RS. 739.56 CRORE. THUS, AS PER THE NOTICE, THERE IS A MISTAKEN IN DETERMINING THE OPENING CWIP AS ON 01.04.2012 AND CONSEQUENTLY THE CWIP IS CARRY FORWARD MORE FOR RS. 19.32 CRORE. THE ASSESSEE EXPL AINED THAT ASSESSING OFFICER HAS TAKEN CWIP AS PER THE BOOKS OF ACCOUNT AT RS. 739.56 CRORE TO REDUCE THE INTEREST ALREADY DISALLOWED AT RS. 27.66 CRORE AND DETERMINED CLOSING CWIP AS ON 31.03.2012 AT RS. 711.90 CRORE A ND FURNISHED THE BREAKUP OF THE SAME. IT WAS EXPLAINED THAT RS. 27.6 6 CRORE INCLUDES INTEREST DISALLOWANCE FOR ASSESSMENT YEAR 2012-13 AMOUNTING TO RS. 13.2 CRORE. ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 10 THUS, THERE IS NO MISTAKE IN DETERMINING THE CWIP A S ON 31.03.2013. THE ASSESSING OFFICER HAS TAKEN STARTING FIGURE OF RS. 739.66 CRORE AND REDUCED INTEREST DISALLOWANCE OF RS. 27.66 CRORE, HOWEVER, IN THE NOTICE; THE OPENING FIGURE IS TAKEN AS PER ASSESSMENT ORDER. AS PER THE WORKING OF NOTICE THE OPENING CWIP ON 01.04.2012 SHOULD BE RS. 720.24 CRORE, WHEREAS THE OPENING CWIP DETERMINED BY ASSESSING OF FICER IS RS. 711.90 CRORE. THE ASSESSING OFFICER HAS CORRECTLY WORKED O UT OPENING CWIP AT RS. 711.9 CRORE AND HAS REDUCED RS. 14.27 CRORE INT EREST ATTRIBUTABLE FOR ASSESSMENT YEAR 2013-14 ACCORDING TO INTEREST ATTRI BUTABLE FOR ASSESSMENT ORDER PASSED BY ASSESSING OFFICER CANNOT BE CONSIDE RED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSMENT ORDER IS NEITHER ERRONE OUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD AR FOR THE ASSESSEE FUR THER SUBMITS THAT IF TWO VIEW ARE POSSIBLE AND THE ASSESSING OFFICER HAS ADO PTED ONE OF THE POSSIBLE VIEW THE ORDER IS NOT ERRONEOUS. FOR REVISING THE A SSESSMENT ORDER THE TWIN CONDITION AS PROVIDED IN SECTION 263 MUST BE FULFIL LED. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASSESSEE RELIED UPON THE FOLLOWING DECISION: (I) MALABAR INDUSTRIAL CO. LTD V/S CIT 243 ITR (SC) , (II) CIT VS MAX INDIA LIMITED 295 ITR 282 (SC), (III) CIT VS ASHISH RAJPAL 180 TAXMAN 623, (IV) NEELAM MERCANTILE PRIVATE LIMITED V/S ITO(MUMBAI TR I) 31 SOT 278, (V) MARICO INDUSTRIES V/S ACIT (MUMBAI TRI) 27 SOT 73, (VI) OIL INDIA LTD V/S CIT (CALCUTTA HC) 138 ITR 836, (VII) SONAL GARMENTS V/S JCIT(MUMBAI ITAT) 98 TTJ 1020, (VIII) REMEX CONSTRUCTION V/S FIRST INCOME TAX (BOM HC), ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 11 ON ISSUE OF NON-APPLICABILITY OF SECTION 23 IN RESP ECT OF UNSOLD FLATS, THE LD. AR RELIED UPON THE FOLLOWING DECISIONS: (IX) ANSAL HOUSING & CONSTRUCTION LTD (S C) 95 TAXMANN.C OM 17 (X) CHENNAI PROPERTIES & INVESTMENTS LTD V/S CIT 373 IT R 673(SC) (XI) NEHA BUILDERS (P.) LTD. V/S CIT (GUJARAT HC) 164 TA XMAN 342 (XII) ARIHANT ESTATES PRIVATE LIMITED V/S ITO(MUMBAI TRI) , ITA NO. 6037/M/2016 (XIII) RUNWAL CONSTRUCTION V/S ACIT (MUMBAI TRI) ITA. NO 5 408 & 5409/MUM/2016 DATED 22.02.2018 9. ON THE OTHER HAND THE LD. CIT-DR FOR THE REVENUE SU PPORTED THE ORDER OF THE LD. PCIT. THE LD. DR FOR THE REVENUE FURTHER SU BMITS THAT THE LD. PCIT RIGHTLY REVISED THE ASSESSMENT ORDER AS THE ORDER I S ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE, WHICH IS CO RRECTLY SPELT OUT BY LD PCIT IN THE NOTICE UNDER SECTION 263 OF THE ACT. TH E ASSESSEE HAS NOT OFFERED THE INCOME FROM THE VACANT FLAT. THE ASSESS ING OFFICER HAS NOT EXAMINED THE ISSUE WHILE PASSING THE ASSESSMENT ORD ER. FOR ISSUE OF INTEREST INCOME THE LD. DR SUBMITS THAT THE LD. PCIT ALSO CO RRECTLY INVOKED THE PROVISION OF SECTION 263 AS THE ISSUE WAS NOT EXAMI NED BY ASSESSING OFFICER BY MAKING NECESSARY INQUIRY. THE LD DR FOR THE REVE NUE SUBMITS THAT THE PRESENT CASE IS FULLY COVERED BY EXPLANATION 2 SECTION 263(1) OF THE ACT. IN SUPPORT OF HIS SUBMISSIONS THE LD DR FOR THE REVENU E RELIED ON THE DECISION OF CALCUTTA HIGH COURT IN RAJMANDIR ESTATE VS PC IT (2016) 386 ITR 162 (CAL). 10. THE LD. AR FOR THE ASSESSEE WAS CONFRONTED WITH THE DECISION OF HONBLE BOMBAY HIGH COURT IN MANGLA HOUSE (P) LTD VS ITO [3 25 ITR 281(BOM.)]. ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 12 THE LD. AR OF THE ASSESSEE SUBMITS THAT THE RATIO O F THE DECISION OF JURISDICTIONAL HIGH COURT IN MANGLA HOUSE (P) LTD V S ITO SUPRA IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THE FA CTS OF THE SAID CASE ARE ENTIRELY DIFFERENT. THE ASSESSEE IN THE SAID CASE IS NOT THE BUILDER LIKE THE ASSESSEE IN THE CASE IN HAND. IN MANGLA HOMES (P) LTD THE ASSESSEE HAS NOT SHOWN THE VACANT FLATS AS STOCK IN TRADE, RATHER TH EY WERE ENGAGED IN THE BUSINESS OF LET OUT OF THE PROPERTIES, WHICH WAS ON E THEIR OBJECT. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE HONBL E SUPREME COURT IN MALABAR INDUSTRIAL CO LTD (SUPRA) HAS LAID DOWN THE FOLLOWING PRINCIPAL; A BARE READING OF SECTION 263 OF THE ACT 1961, MA KES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION BY TH E CIT SUO MOTO UNDER IT, IS THAT THE ORDER OF ITO IS ERRONEOUS, SO FAR AS IT I S PREJUDICIAL TO THE INTEREST OF REVENUE. THE CIT HAS TO BE SATISFIED TWIN CONDIT IONS, NAMELY (1), THE ORDER OF AO SOUGHT TO BE REVISED IS ERRONEOUS AND ( 2) IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. IF ONE OF THEM IS ABSENT- IF T HE ORDER OF ITO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS N OT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO SECTION 263 (1) OF THE ACT. THE PROVISION CANNOT BE INVOKED TO CORRECT EAC H AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE AO; IT IS ONLY WH EN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT AS SUMPTION OF FACT OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUI REMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLE OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE PREJUDICIAL TO THE INTEREST OF REVENUE IS NOT AN E XPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UNDERSTOOD IT IS ORDINARY MEANI NG IT IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. THE SCHEME OF T HE ACT IS TO LEVY AND COLLECT TAX IN ACCORDANCE WITH THE PROVISION OF THE ACT AND THIS TASK IS ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 13 ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS OR DER OF THE ITO, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTEREST OF REVENUE. THE PHRASE PREJUDICIAL TO THE INTEREST OF REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ER RONEOUS ORDER PASSED BY THE A.O. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF AO, CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENU E, FOR EXAMPLE, WHEN AN ITO, ADOPTED ONE OF THE COURSE PERMISSIBLE IN LAW A ND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND TH E ITO HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT B E TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVE NUE. UNLESS THE VIEW TAKEN BY ITO IS UNSUSTAINABLE IN LAW. HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS GABRIAL INDIA LTD 203 ITR 108 (BOM), HELD THAT THE POWER OF SUO MOTO REVISION UNDER SUBSECTION (1 ) OF SECTION 263 OF THE ACT IS IN THE NATURE OF SUPERVISORY DIRECTION AND C AN BE EXERCISED ONLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXIST. TWO CIRCUMST ANCES MUST EXIST TO ENABLE THE CIT TO EXERCISE THE POWER OF REVISION U NDER THIS SUB SECTION VIZ ( 1) THE ORDER SHOULD BE ERRONEOUS AND ( 2) BY VIRTUE OF THE ORDER BEING ERRONEOUS PREJUDICE MUST HAVE BEEN CAUSED TO THE IN TEREST OF THE REVENUE. AND ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT I S NOT IN ACCORDANCE WITH LAW. IF ITO. ACT IN ACCORDANCE WITH LAW. MAKE CERTAIN ASSESSMENT; THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE CIT SIMP LY BECAUSE ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE CEL EBRATORY. THIS SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION OF THE JU DGEMENT OF THE CIT FOR THAT OF THE ITO, WHO PASSED THE ORDER, UNLESS THE DECISI ON IS HELD TO BE ERRONEOUS. THIS IS MAY BE VISUALISED WHERE THE ITO WHILE MAKING THE ASSESSMENT EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIED HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINE T HE INCOME EITHER BY ACCEPTING THE ACCOUNTS FOR BY MAKING SOME ESTIMATE HIMSELF. THE CIT ON PERUSAL OF RECORDS, MAY BE OF OPINION THAT THE ESTI MATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND LEFT TO THE CIT , HE WOULD HAVE ESTIMATED THE INCOME AT A HIGHER FIGURE THAN ONE DE TERMINE BY THE ITO. THAT WOULD NOT VEST THE CIT WITH POWER TO RE-EXAMIN E THE ACCOUNTS AND ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 14 DETERMINE THE INCOME HIMSELF AT THE HIGHER FIGURE. THIS IS BECAUSE ITO HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION C ANNOT BE TERMED TO BE ERRONEOUS, SIMPLY BECAUSE THE CIT DOES NOT FEEL SAT ISFIED WITH THE CONCLUSION. IT MAY BE SAID IN SUCH A CASE THAT IN T HE OPINION OF THE CIT THE ORDER IN QUESTION IS PREJUDICIAL TO THE INTEREST OF REVENUE. BUT THAT BY ITSELF WOULD NOT BE ENOUGH TO VEST THE CIT WITH THE POWER TO SUO MOTO REVISION BECAUSE THE FIRST REQUIREMENT, NAMELY THAT THE ORDE R IS ERRONEOUS, IS ABSENT. SIMILARLY, IF AN ORDER IS ERRONEOUS BUT NOT PREJUDI CIAL TO THE INTEREST OF THE REVENUE, THEN THE POWER OF SUO MOTO REVISION CANNOT BE EXERCISED. AND EVERY ERRONEOUS ORDER CANNOT BE SUBJECT MATTER OF R EVISION BECAUSE THE SECOND REQUIREMENT MUST BE FULFILLED. THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT TAX WHICH WAS LAWFU LLY ELIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELE VANT STATUE, ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TA X THAN WHAT WAS JUST HAS BEEN IMPOSED. WHEN EXERCISE OF STATUTORY POWER IS D EPENDENT UPON THE EXISTENCE OF CERTAIN OBJECTIVE FACTS, THE AUTHORITY BEFORE EXERCISING SUCH POWER MUST HAVE MATERIAL ON RECORD TO SATISFY IN TH AT REGARD. IF THE ACTION OF THE AUTHORITIES CHALLENGED BEFORE THE COURT, IT WOULD BE OPEN TO THE COURTS TO EXAMINE WHETHER RELEVANT OBJECTIVE FACTORS WERE LABEL FROM THE RECORDS CALLED FOR AND EXAMINED BY SUCH AUTHORITY. 12. WE HAVE NOTED THAT THE LD. PCIT REVISED THE ASSESSM ENT ON TWO ISSUE I.E. (I) THE ASSESSING OFFICER HAS NOT EXAMINED THE TAXABILI TY OF UNSOLD FLAT UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND (II) DISA LLOWANCE AS PER THE PROVISIONS OF SECTION 36(1)(III). 13. WE HAVE NOTED THAT DURING THE ASSESSMENT, THE ASSES SEE VIDE ITS REPLY/LETTER DATED 24.11.2015 FURNISHED THE DETAIL OF OPENING AN D CLOSING STOCK CONSISTING OF FLAT READILY AVAILABLE FOR SALE IN RE SPECT OF IMPERIL PROJECT. IN THE DETAILS OF INVENTORY, THE ASSESSEE CLEARLY BRIN G ON RECORD THAT AT THE TIME ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 15 OF OPENING OF WRITTEN DOWN VALUE OF 21 FLAT, CONSIS TING OF AREA OF 80000 (MAY BE SQ.FT.) TOTAL VALUE OF RS. 170,41,088,56/- OUT OF WHICH THE ASSESSEE HAS SOLD 14 FLATS OF TOTAL AREA 48830 (MAY BE SQ.FT .) OF VALUE OF RS. 104,01,45,443/-. THEREBY THE ASSESSEE REMAINED IN P OSSESSION OF TOTAL 7 UNSOLD FLATS CONSISTING AREA OF 31170 (MAY BE SQ.FT .) VALUE OF WHICH WAS SHOWN AT RS. 66,39,63,413/-. THE ASSESSEE HAS ALSO FURNISHED THE COMPLETE DETAILS OF NAME OF PARTIES, FLAT NUMBER AND DETAILS OF THE COST OF FLATS SOLD DURING THE YEAR. MOREOVER, THE LD. CIT(A) IN THE NO TICE UNDER SECTION 263 HAS REFERRED THAT ON VERIFICATION, CERTAIN DISCREPA NCIES WERE FOUND IN THE ASSESSMENT ORDER. THE LD. CIT(A) HAS ALSO REFERRED THAT THE ASSESSEE HAS SHOWN UNSOLD FLAT VALUING OF RS. 66,39,63,413/- IN CLOSING STOCK. THEREBY, ALL THE INFORMATION/DETAILS WERE GATHERED BY THE LD . PCIT FROM THE ASSESSMENT RECORD. WE HAVE FURTHER NOTED THAT IN TH E NOTICE, THE LD. CIT(A) HAS REFERRED THE DECISION OF HONBLE DELHI HIGH COU RT IN ANSAL HOUSING FINANCE & LEASING COMPANY LTD. [203 TAXMAN 143 (DEL .)]. THE LD. AR OF THE ASSESSEE WHILE MAKING SUBMISSION HAS VEHEMENTLY SUBMITTED THAT ISSUE IS DEBATABLE AND THERE IS CONTRARY DECISION OF HON BLE GUJARAT HIGH COURT IN NEHA BUILDERS PVT. LTD. [164 TAXMAN 342 (GUJ.)] WHEREIN THE HONBLE COURT HAS TAKEN A VIEW THAT, IF PROPERTY IS USED AS A STOCK-IN-TRADE, THEN SAID PROPERTY WOULD BECOME OR PARTAKE CHARACTE R OF STOCK AND ANY INCOME DERIVED FROM SUCH STOCK WOULD BE INCOME FRO M BUSINESS AND NOT INCOME FROM HOUSE PROPERTY. THEREFORE, KEEPING IN VIEW THE CONTRARY ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 16 DECISION OF NON-JURISDICTIONAL HIGH COURT, WE ARE O F THE VIEW THAT ISSUE IS DEBATABLE AND TWO VIEWS ARE POSSIBLE. THE HONBLE S UPREME COURT IN CIT VS. MAX INDIA (SUPRA) HELD THAT WHEN TWO VIEWS ARE INHERENTLY POSSIBLE, THE PROVISION OF SECTION 263 WOULD NOT ATTRACT. WE MAY REFER HERE THAT THE UNSOLD FLAT WAS TREATED BY ASSESSEE AS STOCK-IN-TRA DE IN ITS BOOKS OF ACCOUNT. THE FLATS SOLD BY THE ASSESSEE WERE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS. THEREFORE, IN OUR CONSIDERED VIEW THAT T HE ORDER FOR NOT BRINGING THE UNSOLD FLATS TO TAX AT NOTIONAL LETTING VALUE U NDER THE HEAD INCOME FROM OTHER SOURCES IS NOT ERRONEOUS. THE ASSESSING OFFI CER HAS TAKEN ONE OF THE POSSIBLE VIEWS. EVEN OTHERWISE, SUB-SECTION (5) IN SECTION 23 WAS INSERTED BY FINANCE ACT, 2017 AND IS APPLICABLE ONLY FROM 01 .04.2018 AND NOT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, THE TWIN CONDITION AS PRESCRIBED UNDER SECTION 263 ARE NOT FULFILLED IN R ESPECT OF FIRST ISSUE I.E. TAXABILITY OF UNSOLD FLATS UNDER THE HEAD INCOME F ROM HOUSE PROPERTY. 14. SO FAR AS, DISALLOWANCE OF INTEREST UNDER SECTION 3 6(1)(III) IS CONCERNED IN RESPECT OF PAYMENT MADE TO PRS DEVELOPERS IS CONCER NED, WE HAVE NOTED THAT THIS ISSUE WAS EXAMINED BY ASSESSING OFFICER A S REFER IN PARA-5 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER OBSERVED TH AT PAYMENT MADE TO M/S PRS DEVELOPERS ALSO FORM PART OF WORK-IN-PROGRE SS SHOWN BY THE ASSESSEE. THE ASSESSING OFFICER MADE CORRESPONDING INTEREST DISALLOWANCE ATTRIBUTABLE TO NON-GENUINE PAYMENTS IN THE FOLLOWI NG MANNER: ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 17 SR. NO. PARTICULARS AMOUNT (RS. IN CRORES) A OPENING BALANCE OF CAPITAL WORK IN PROGRESS (INCL UDING RAW MATERIAL STOCK) 739.56 B ADD: EXPENSES CAPITALISED 51.07 TOTAL CAPITALIZATION 790.63 C LESS: INTEREST ALREADY DISALLOWED TILL AY 2012-13 AND INCLUDED IN ABOVE AMOUNT (27.66) D WIP EXCLUDING INTEREST 762.97 E ADD: FINANCE COST CAPITALISED 120.23 F CLOSING BALANCE OF WIP 883.20 G CONSULTANCY CHARGES PAID TO M/S. PRS DEVELOPERS 90.56 H INTEREST ATTRIBUTABLE TO PAYMENTS MADE TO PRS DEVELOPERS [EXG)/D] 14.27 15. THE ASSESSEE IN ITS REPLY TO THE SHOW-CAUSE NOTICE UNDER SECTION 263 CONTENDED THAT THERE IS NO MISTAKE IN DETERMINING T HE CWIP AS ON 31.03.2013. THE ASSESSING OFFICER HAS TAKEN STARTIN G FIGURE OF RS. 739.66 CRORE AND REDUCED INTEREST DISALLOWANCE OF RS. 27.6 6 CRORE, HOWEVER, IN THE NOTICE; THE OPENING FIGURE IS TAKEN AS PER ASSE SSMENT ORDER. AS PER THE WORKING OF NOTICE THE OPENING CWIP ON 01.04.2012 SH OULD BE RS. 720.24 CRORE, WHEREAS THE OPENING CWIP DETERMINED BY ASSES SING OFFICER IS RS. 711.90 CRORE. THE ASSESSING OFFICER HAS CORRECTLY W ORKED OUT OPENING CWIP AT RS. 711.9 CRORE AND HAS REDUCED RS. 14.27 C RORE INTEREST ATTRIBUTABLE FOR ASSESSMENT YEAR 2013-14. IN OUR VI EW THE ASSESSING OFFICER HAS CORRECTLY WORKED OUT THE CWIP AS ON 01. 04.2012 AT RS. 711.90 CRORE (RS. 739.56 CRORE RS. 27.66 CRORE) AND HAS REDUCED RS. 14.27 ITA NO. 3311 MUM 201 8-S.D. CORPORATION PRIVATE LTD. 18 CRORE INTEREST ATTRIBUTABLE FOR A.Y. 2013-14. THERE FORE, THE ORDER IS NOT ERRONEOUS AND PASSED AFTER DUE VERIFICATION OF FACT . HENCE, THE REVISION ORDER IS PASSED BY LD. PCIT ON SECOND ISSUE IS ALSO FAILED. 16. THE CASE LAWS RELIED BY LD. DR FOR THE REVENUE IN R AJMANDIR ESTATES (P.) LTD. IS NOT APPLICABLE ON THE FACT OF THE PRESENT C ASE. THE ASSESSMENT IN THE SAID CASE WAS COMPLETED WITHOUT HOLDING REQUISITE I NVESTIGATION FOR SHARE PREMIUM. THE ORDER WAS PASSED WITHOUT APPLICATION O F MIND. HOWEVER, IN THE PRESENT CASE, THE ASSESSING OFFICER MADE ENQUIR IES AND IN RESPONSE THERETO THE ASSESSEE FURNISHED RELEVANT MATERIAL BE FORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS ON FIRST ISSUE AND ON SECOND ISSUE; THERE IS NO MISTAKE IN D ETERMINING CWIP. IN THE RESULT, GROUNDS OF APPEAL RAISED BY ASSESSEE ARE AL LOWED. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/ 12/2018. SD/ SD/- N.K. PRADHAN PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 26.12.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI