The ITO, Ward-4(2), Baroda V. Rainbow Housing Developement & Finance Corpn.Ltd., Baroda

ITA 3408/AHD/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2000 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-02-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 15-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR RAJA RAM SAH
• Assessee Lawyers: S N SOPARKAR
• Keywords: Search and seizure; Audit objection
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER) ITA NO.3408/AHD/2008 [ASSTT. YEAR : 2001-2002] ITO, WARD-4(2) BARODA. VS. RAINBOW HOUSING DEVELOPMENT & FINANCE CORPN. LTD. RAIBOW HOUSE, PRATAP ROAD RAOPURA, BARODA. PAN : AABCR 4038 D (APPELLANT) (RESPONDENT) REVENUE BY : DR. RAJA RAM SAH ASSESSEE BY : SHRI S.N. SOPARKAR O R D E R PER BENCH: THIS APPEAL IS AT THE BEHEST OF THE REVENUE, WHICH HAS EMANATED FROM THE ORDER OF THE CIT(A)-III, BARODA D ATED 29.07.2008. THE RELEVANT GROUND IS REPRODUCED BELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,16,48,992/- BEING EXTINGUISHMENT OF LIABILITY U/S.41(1) THOUGH THE AS SESSEE FAILED TO FURNISH NEITHER CONFIRMATION FROM THE CREDITOR NOR COULD FU RNISH PAPERS INDICATIVE OF THE PENDENCY OF CIVIL SUIT, EITHER DU RING THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLANT PROCEEDINGS, IG NORING THE FACT THAT THE ASSESSEE HAS DECLARED THE INVENTORY ON THE LAST DAY OF DIFFERENT ASSESSMENT YEARS AT DIFFERENT AMOUNT WHICH PROVES T HAT THE ASSESSEE HAS SOLD THE LAND. 2. THE ASSESSMENT IN QUESTION HAS BEEN PASSED UNDER SECTION 143 (3) R.W.S. 147 DATED 19-12-2009. THE CASE WAS REOPENED BY ISS UING NOTICE UNDER SECTION 148 DATED 30.03.2007. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, VIDE PARA 4.2 THE ADDITION WAS DELETED, REPRODUCED BELOW :- 4.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. A.R AND THE FACTS OF THE L CASE. THE ISSUE HAS BEEN DISCUSSED BY ME I N DETAIL IN ANY ORDER NO.CAB/III/69/0607 DATED 23-7-2007. THE CONCI SE FACT IS THAT THE ASSESSES HAS NOT DISCLOSED THE TRANSACTION ON N ET BASIS BUT HAS DONE SO ON GROSS BASIS. IN OTHER WORDS, THE ENTIRE VALUE OF LAND (RS.2,15,41,450/-) HAS BEEN SHOWN AS ITS ASSET AND THE PAYMENT OUTSTANDING HAS BEEN SHOWN AS ITS LIABILITY. IF THE TRANSACTION WERE TO ITA NO.3408/AHD/2008 -2- BE REFLECTED ON NET BASIS, IT WOULD APPEAR ON THE A SSET SIDE AS ADVANCE PAID TOWARDS COST OF LAND ( RS.2,15,41,450 - RS.1,08,24,496 = RS.1,07,16,954/-). THUS, THE AUDIT OBJECTION WOUL D BE MET. I AM AFRAID NEITHER THE AUDITOR NOR THE A.O HAS CORRECTL Y APPRECIATED THE FACTUAL POSITION. FOR THE REASONS DISCUSSED BY ME I N DETAIL IN APPELLATE ORDER NO.CAB/III/69/06-07 DATED 23-7-07, IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN AGAIN REOPENING THE ASS ESSMENT AND MAKING THE ADDITION OF RS.2,16,48,992/-. THE ADDITI ON IS DELETED. 3. WITH THIS BACKGROUND, WE HAVE HEARD BOTH THE SID ES. AT THE OUTSET, THE ORDER OF THE RESPECTED CO-ORDINATE BENCH C OF ITA T, AHMEDABAD IN ITA NO.4052/AHD/2007 FOR A.Y.2001-2002 DATED 31.05.2010 IN ASSESSEES OWN CASE, HAS BEEN CITED, WHEREIN THE REVENUES APPEAL WAS DISMISSED WITH THE FOLLOWING FINDINGS: 10. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE REASONING GIVEN BY THE LD. CIT(A) IN THE IMPUGNED O RDER, WE ARE CONVINCED THAT THE AMOUNT OF RS.1.08 CRORES HAS BEE N SHOWN BY THE ASSESSEE-COMPANY AS LIABILITY IN THE BALANCE SHEET AND NO EVIDENCE OF CESSATION OF LIABILITY HAS BEEN BROUGHT ON RECORD. NO EVENT WHATSOEVER HAS BEEN PLACE IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, IN THE IMPUGNED ORDER, TH E LD.CIT(A) RIGHTLY TOOK THE VIEW THAT THE AMOUNT IN QUESTION IS NOT AS SESSABLE UNDER SECTION 41(1) OF THE INCOME TAX ACT, 1961. WE, THEREFORE I NCLINE TO UPHOLD THE VIEW TAKEN BY THE LD.CIT(A). SINCE A VIEW HAS ALREADY BEEN TAKEN BY THE RESPECTE D CO-ORDINATE BENCH ON IDENTICAL FACTS, THEREFORE, FOLLOWING THE SAME, WE HEREBY AFFIRM THE FINDINGS OF THE LEARNED CIT(A) AND DISMISS THIS GROUND OF THE R EVENUE. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11TH FEBRUARY, 20 11. SD/- SD/- (G.D. AGARWAL) VICE-PRESIDENT (MUKUL KR. SHRAWAT) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 11-02-2011 ITA NO.3408/AHD/2008 -3- COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD