ACIT1(1), Bhopal V. Shri Prahlad Das Goyal, Bhopal

ITA 337/Ind/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0461 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 25-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S DESHPANDE
• Keywords: Business income; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (Convened through Virtual Court) BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SHRI MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं./I. T. A. No. 337/Ind/2020 ( नधा रण वष / As s es s ment Yea r : 2010-11) A s s is ta n t C o mmi s s io n e r o f I n c o me T a x – 1( 1 ) Bh op al बनाम/ V s . S h r i Pr ah l ad D a s Goy a l 18, S hya ml a H i l ls , Bh op al थायी लेखा सं./जीआइआर सं./P A N / G IR N o . : A B B P G 3 4 9 4 L (अपीलाथ /Appellant) . . ( यथ / Respondent) अपीलाथ ओर से/Appellant by : Shri P. K. Mitra, CIT. D.R. यथ क ओर से / Respondent by : S h ri S . S . D es hp an de, A . R. स ु नवाई क तार ख / D a t e o f H e a r i ng 25/11/2021 घोषणा क तार ख /D a te o f P r o n o u nc e me n t 06 /01/2022 ORDER PER MAHAVIR PRASAD, JM: The appeal has been preferred by the Revenue against the order of the Commissioner of Income Tax (Appeals)-1, Bhopal (‘CIT(A)’ in short) vide Appeal No. CIT(A)-1/BPL/IT-10080/13-14, dated 02.09.2020 arising out of assessment order dated 13.03.2013 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2010-11. ITA No. 337/Ind/2020 [ACIT vs. Shri Prahlad Das Goyal] AY 2010-11 - 2 - 2. The ground of appeal raised by Revenue reads as under: “1. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in deleting the addition amounting to Rs. 3,92,68,861/- by not considering the advances received from customers as business income for year under consideration, when there was no surety in construction and possession of the project. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified for not holding that the advance received from the customers as business income merely because that no registration was made and possession still with assessee.” 3. During the course of assessment proceedings, the learned A.O. found that the assessee alongwith two other persons had entered into a Joint Venture agreement with M/s. NIHO Construction Ltd. for development of a colony under the name and style 'Scotish Garden'. The learned A.O. further found that the assessee alongwith two other persons were to receive 26% of the sale receipts of the above project. All the expenses relating to construction were to be borne by M/s. NIHO Construction Ltd. The Learned A.O. found that the assessee had received a sum of Rs. 4,36,32,068/- against the above project in addition to refundable security deposit of Rs. 62,50,000/-. This was the business receipt of the assessee. On being asked, the assessee replied that the sum of Rs. 4,36,32,068/- was advances received from the customers. The learned A.O. analyzed that the cost to be incurred by the assessee in the said project was very meager and applied 90% profit ratio and determined undisclosed business income at Rs.3,92,68,861/- and the same was added to the total income of the assessee. 4. Thereafter, the assessee preferred first statutory appeal before the learned CIT(A) who granted relief to the assessee holding that the advances received from the prospective customers cannot be treated as income unless the registration is made in favour of the customers and possession to the ITA No. 337/Ind/2020 [ACIT vs. Shri Prahlad Das Goyal] AY 2010-11 - 3 - customers given. Since, no transfer of property could be taken place in this case, hence, no income has been arisen on this account of the assessee. 5. The Revenue has preferred appeal against the order of the learned CIT(A). 6. We have gone through the relevant records and impugned order and heard both the parties. The learned AO nowhere mentioned that how 90% of the total advances could be treated as income of the assessee. The learned AO nowhere has done such exercise in our opinion merely assessee has received advances for construction of houses from its customers cannot be the income of the assessee. As evident from the record that there were a Joint Venture agreement with M/s. NIHO Construction Ltd. for development of a colony under the name and style 'Scotish Garden'. There was a joint venture agreement with M/s NIHO Construction Ltd. for the construction of colony under the name and style Scottish Garden. As per the joint venture Agreement, the assessee being land owner along with other two persons was authorized to receive 26% of total receipt and due to some avoidable circumstances, amount could not be received as share but NIHO Construction Ltd. allotted 41 plots to the assessee on which M/s NIHO Construction Ltd. was supposed to construct bungalows. The assessee got advances from the prospective customers. But no constructed bungalow was handed over to the assessee by the M/s NIHO Construction Ltd. Before the CIT(A), the assessee filed certain additional evidences who forwarded the same to the AO for his comments for proper investigation/examination. Thereafter, reminder was also sent to the AO to give his comments, but, the learned AO did not submit his comments or any investigation in the matter with regard to the additional evidences. In such situation, it can be presumed that learned AO has made addition on ITA No. 337/Ind/2020 [ACIT vs. Shri Prahlad Das Goyal] AY 2010-11 - 4 - the basis of whims and fancies and in Income Tax Law, there is no scope for such prevaricate. In our considered view, the CIT(A) has passed a detailed and reasoned order and same does not require any kind of interference at our end. 7. In the result, the appeal filed by the Revenue is dismissed. Sd/- Sd/- (MANIS H BOR AD) (MAHAVIR PRASAD) ACCOUN TANT MEM BER JUDICIAL MEMBER Ahmedabad: Dated 06 /01/2022 S.K.SINHA आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. राज व / Revenue 2. आवेदक / Assessee 3. संबं)धत आयकर आय ु +त / Concerned CIT 4. आयकर आय ु +त- अपील / CIT (A) 5. /वभागीय 2त2न)ध, आयकर अपील य अ)धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड8 फाइल / Guard file. By order/आदेश से, A s si s st a n t R e g i st r a r , I . T . A . T . , I n d o r e This Order pronounced in Open Court on 06 /01/2022