M/s Divine City Pvt. Ltd., Ujjain V. The CIT, Ujjain

ITA 343/IND/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99147 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Revision of order
• Section: 263

Judgement Text

DIVINE CITY PVT. LTD. ITA NO. 343/IND/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 343/IND/2013 A.Y.2008-09 M/S DIVINE CITY PVT. LTD. UJJAIN ::: APPELLANT VS COMMISSIONER OF INCOME TAX UJJAIN ::: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 18.11.2015 DATE OF PRONOUNCEMENT 7 .12.2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT, UJJAIN, DATED 20.3.2013. DIVINE CITY PVT. LTD. ITA NO. 343/IND/2013 2 2. THE LEARNED COMMISSIONER OF INCOME TAX INITIATED PROCEEDINGS U/S 263 OF THE ACT ON THE ISSUE THAT FRO M RECORD IT IS SEEN THAT AN AMOUNT OF RS. 25,11,809/- WA S ADDED TO THE TOTAL INCOME ON ACCOUNT OF INFLATED COST O F GOODS SOLD AND AS PER THE RECORD SUBMITTED DURING THE ASSESSMENT PROCEEDINGS, AS PER SCHEDULE 9 OF THE AUDIT REPORT, PURCHASES HAVE BEEN SHOWN AT RS. 1,07,19,617/- . HOWEVER, THE BIFURCATION OF THE PURCHASES WAS NOT GIV EN. THE LEARNED COMMISSIONER OF INCOME TAX ALSO OBSERVED THAT NO ACTIVITY WAS PERFORMED DURING THE YEAR WITH RE SPECT TO THE LAND PURCHASED AT UJJAIN. THE LEARNED CIT(A) ALSO OBSERVED THAT RS. 61,42,956/- WAS DEBITED AS DEVELOPME NT EXPENSES BUT NO DETAILS OF THE DEVELOPMENT WORK DONE HAVE BEEN PLACED ON RECORD AND WHETHER THESE HAVE BEEN VERI FIED OR NOT AND TDS HAS BEEN MADE ON THE AMOUNT OF RS. 46,30,433/- AND ON THE BALANCE AMOUNT OF RS. 15,12,523/ - NO TDS WAS DEDUCTED. HE, THEREFORE, HELD THAT DIVINE CITY PVT. LTD. ITA NO. 343/IND/2013 3 RS.15,12,523/- WAS TO BE DISALLOWED BY INVOKING PROVI SIONS OF SECTION 40(A)IA) OF THE ACT. 3. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT IN THE APPEAL OF THE ASSESSEE IN ITA NO. 207/IND/2013 WE HAVE SET ASIDE THE ISSUE RELATING TO INFLATED COST OF GOODS SOLD TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED DE NOVO. ON THE ISSUE OF DEVELOPMENT EXPENSES, WE HOLD THAT THIS WAS A PURE GUESS WORK ON THE PART OF THE LEARNED COMMISSION ER OF INCOME TAX TO HOLD THAT TDS WAS DEDUCTED ONLY ON RS.46,30,433/- AND NOT ON THE WHOLE AMOUNT OF DEVELOPMENT EXPENSES OF RS.61,42,966/-. SUCH NOTING S ARE WITHOUT ANY BASIS. THERE IS NO QUALIFYING STATEMENTS IN AUDIT REPORT OF THE AUDITORS ON THIS ISSUE, RATHER THE AUDITORS HAVE CERTIFIED THAT THE ASSESSEE HAS COMPLIED WITH THE PROVISIONS OF CHAPTER XVII-B WHICH THE ASSESSING OFFICER HAS ACCEPTED. HENCE, ORDER IS NEITHER PREJUDI CIAL TO THE INTEREST OF THE REVENUE NOR ERRONEOUS ON THIS I SSUE. DIVINE CITY PVT. LTD. ITA NO. 343/IND/2013 4 THEREFORE, OBJECTION OF LD. CIT WITH REGARD TO TDS O N THE DEVELOPMENT EXPENSES IS WITHOUT ANY BASIS AND WE SET ASIDE THE DIRECTION ON THIS ISSUE. HOWEVER, WE MAINTAI N THE CITS DIRECTION WITH REGARD TO EXPENSES TOWARDS THE C OST OF GOODS SOLD. IN THE OTHER APPEAL WE HAVE RESTORED THE I SSUE TO THE ASSESSING OFFICER. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 7TH DECEMBER, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 7TH DECEMBER, 2015 DN/- DIVINE CITY PVT. LTD. ITA NO. 343/IND/2013 5