Z Estate Private Limited, Bhubaneswar V. ACIT, Corporate Circle-1(2), Bhubaneswar

ITA 334/CTK/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5264 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-12-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 29-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: D K SHETH

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH CUTTACK BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER ./ ITA NO. 334 / CTK /20 1 7 ( / ASSESSMENT YEAR : 20 1 2 - 20 1 3 ) Z ESTATE PRIVATE LIMITED, AT - M - 4 /34, ACHARYA VIHAR, BHUBANESWAR - 751022 VS. THE ACIT, CIRCLE - 1(2), BHUBANESWAR ./ ./ PAN/GIR NO. : A AACZ 3063 B ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI D.K.SHETH , AR /REVENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 28 / 1 2 /201 7 / DATE OF PRONOUNCEMENT 29 / 12 /201 7 / O R D E R TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 1 , B H UBANESWAR , DA TED 24.05.2017 . 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESSEE IS THAT CIT(A) WAS ERRED IN CONFIRMING THE ADDITION OF RS.22,54,682/ - MADE BY THE AO. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE EXPENDITURE OF RS.2,30,95,322/ - SHOWN BY T HE ASSESSEE DURING THE YEAR WAS PROJECT WORK IN PROGRESS AND WAS IN THE NATURE OF PRE - OPERATIVE EXPENSES WHICH OUGHT TO HAVE BEEN CAPITALIZED. THE EXPENSES ARE IN THE NATURE OF DEFERRED REVENUE EXPENSES FOR BEING DEBITED AGAINST THE INCOME WHEN THE SAME WO ULD HAVE ARISEN. THEREFORE, HE HELD THAT THE RECEIPTS OF THE ASSESSEE ON ACCOUNT OF INTEREST ON F IXED DEPOSITS OF RS.21,04,410/ - , DIVIDEND INCOME RS.28,013/ - AND MISCELLANEOUS INCOME OF RS.1,22,259/ - AGGREGATING TO TOTAL RS.22,54,682/ - WAS THE INCOME FROM OTHER SOURCES ITA NO. 334 /CTK/201 7 2 AND ASSESSED THE SAME ACCORDINGLY. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AND THE CIT(A) CONFIRMED THE ORDER OF AO. 4. BEFORE ME, THE ONLY SUBMISSION OF AR OF THE ASSESSEE IS THAT THE ASSESSEE IN ITS STATEMENT OF ACCOUNT FOR THE YE AR ENDED ON 31.03.2012 HAS DEDUCTED RS.22,54,682/ - FROM THE TOTAL EXPENDITURE OF RS.2,53,50,014/ - AND IT CARRIED THE BALANCE AMOUNT TO RS.2,30,95,332/ - IN THE BALANCE SHEET AS PRE - OPERATIVE EXPENSES. HIS SUBMISSION IS THAT WHILE ON THE ONE HAND THE AO IS A SSESSING RS.22,54,682/ - AS INCOME OF THE ASSESSEE DURING THE YEAR UNDER THE HEAD INCOME FROM OTHER SOURCES, HE IS NOT RESTORING THE PRE - OPERATIVE EXPENSES OF THE ASSESSEE BACK TO ITS ORIGINAL AMOUNT OF RS.2,53,50,014/ - AND THIS AMOUNTS TO DOUBLE TAXATION O F THE SAME AMOUNT. 5. LD. DR COULD NOT CONTROVERT THE SUBMISSIONS AR OF THE ASSESSEE. 6. IN THE ABOVE BACK GROUND OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE SUBMISSION OF AR OF THE ASSESSEE IS CORRECT AS PER THE AUDITED STATEMENT OF ACCOUNTS FILED BEFORE ME FOR THE YEAR ENDED ON 31.03.2012, I FIND THAT OTHER INCOME SHOWN IS AT RS.22,54,682/ - AND PRE - OPERATIVE EXPENSES ARE SHOWN AT RS.2,53,50,014/ - . THE ASSESSEE HAS DEDUCTED THE OTHER INCOME OF RS.22,54,682/ - FROM ITS EXPENDITURE AND CARRIED TO NET AMOUNT OF RS.2,30,95,332/ - AS PRE - OPERATIVE EXPENSES IN ITS BALANCE S HEET . THEREFORE, AS THE OTHER INCOME OF RS.22,54,682/ - IS BROUGHT TO TAX BY THE AO AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES THEN CONSEQUENTLY THE PRE - OPERATIVE EXPENSES OF THE A SSESSEE TO BE CARRIED FORWARD IS TO BE RESTORED TO ITS ORIGINAL AMOUNT OF RS.2,53,50,014/ - . I, ITA NO. 334 /CTK/201 7 3 THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND REMAND THE MATTER BACK TO THE FILE OF AO TO RE - ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE DISCUSSIO N MADE HEREINABOVE AFTER ALLOWING REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 / 12 /201 7 . SD/ - (N. S . SAINI) / ACCOUNTANT MEMBER CUTTACK ; DATED 29 / 12 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. Z ESTATE PRIVATE LIMITED, AT - M - 4/34, ACHARYA VIHAR, BHUBANESWAR - 751022 2. / THE RESPONDENT - ACIT , CORP. CIRCLE - 1 ( 2 ), BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//