Gopisons Developers P. Ltd, Pune V. ACIT,CIR-I,[2] Pune, Pune

ITA 356/PUN/2012

• Counselvise Citation: 35624514 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 22-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADARSH KUMAR MODI
• Assessee Lawyers: SANJAY N KAPADIAA
• Keywords: Sale consideration of property below Jantri Value
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 356/PN/2012 (ASSESSMENT YEAR 2006-07) GOPISONS DEVELOPERS PVT. LTD., A-1, 5 TH FLOOR, AVENUE DHOLE PATIL ROAD, PUNE-411 001 PAN NO. AAACG 6190N .. APPELLANT VS. ACIT, CIRCLE-1(2), PUNE .. RESPONDENT APPELLANT BY : SHRI SANJAY N. KAPADIAA RESPONDENT BY : SHRI ADARSH KUMAR MODI DATE OF HEARING : 03-07-2013 DATE OF PRONOUNCEMENT : 03-07-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 30-05-2011 PASSED U/S.263 BY THE CIT-I, PUNE RELATI NG TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE IN THE GROUNDS OF APPEAL HAS CHALLE NGED THE VALIDITY OF THE ORDER PASSED U/S.263 BY THE LD. CIT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY ENGAGED IN CONSTRUCTION AND DEVELOPMENT OF PROPERTI ES. IT FILED ITS RETURN OF INCOME ON 30-11-2006 DECLARING TOTAL LOSS OF RS. 11,69,450/-. THE ASSESSING OFFICER PASSED THE ORDER U/S.143(3) ON 17 -11-2008 DETERMINING THE TOTAL LOSS AT RS.9,66,610/-. SUBSE QUENTLY, THE LD. CIT 2 CALLED FOR THE RECORDS AND NOTED THAT THE FOLLOWING ISSUES WERE NOT CONSIDERED BY THE ASSESSING OFFICER WHILE FRAMING T HE ASSESSMENT. I. INCORRECT COMPUTATION OF STCG ON SALE OF LAND : AS PER THE DEVELOPMENT AGREEMENT, THE MARKET VALUE OF THE LAND SOLD DURING THE YEAR IS OF RS.1,29,03,000/- AN D THE SAME SHOULD HAVE BEEN TAKEN FOR COMPUTING THE SHORT TERM CAPITAL GAIN AS PER THE PROVISIONS OF SEC.50C OF THE I.T. ACT. THE SAME HAS RESULTED IN UNDER ASSESSMENT OF STCG BY RS.1,16,68, 000/-. II. INCORRECT ALLOWANCE OF PERSONAL EXPENDITURE (SC HOLARSHIP EXPENSES) : THE ADMINISTRATIVE EXPENDITURE CLAIMED IN THE RETUR N OF INCOME INCLUDES EXPENDITURE OF RS.24,38,673/- INCURRED TOW ARDS SCHOLARSHIP EXPENSES FOR THE CHILDREN OF THE DIRECT ORS, WHICH ARE NOT COVERED U/S.37 OF THE I.T. ACT. THE SAID EXPEN DITURE HAS ALSO NOT BEEN CONSIDERED FOR LEVY OF FRINGE BENEFIT TAX AS PER SEC.115WB (2)(P). HE THEREFORE ISSUED A SHOW CAUSE NOTICE U/S.263 OF THE I.T. ACT ASKING THE ASSESSEE TO EXPLAIN AS TO WHY AN ORDER OF REVIS ION U/S.263 SHOULD NOT BE PASSED. REJECTING THE VARIOUS EXPLANATIONS GIVE N BY THE ASSESSEE THE LD. CIT HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE , THEREFORE, RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMI NE ALL THE FACTS AND EVIDENCE PERTAINING THERETO AND TO DECIDE THE SAME AFRESH IN THE LIGHT OF HIS OBSERVATIONS AND IN ACCORDANCE WITH LAW. 3.1 AGGRIEVED WITH SUCH ORDER OF THE LD.CIT SETTING ASIDE THE ASSESSMENT U/S.263 THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT AND CONSIDERED THE PAPER BOOK FILED. WE HAVE ALSO CONS IDERED THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSE SSEE. FROM THE COPY 3 OF THE ASSESSMENT ORDER WE FIND THERE IS NO DISCUSS ION AT ALL ABOUT THE 2 IMPORTANT ISSUES RAISED BY THE LD.CIT. THE ASSESSI NG OFFICER WHILE COMPLETING THE ASSESSMENT HAS ONLY DISCUSSED THE AL LOWABILITY OF DEDUCTION U/S.24 OF THE I.T. ACT. HE, HOWEVER, HAS NEITHER DISCUSSED ANYTHING ABOUT COMPUTATION OF SHORT TERM CAPITAL GA IN ON SALE OF LAND NOR DISCUSSED THE ISSUE OF THE SCHOLARSHIP EXPENSES. N OTHING WAS EVEN ASKED DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO THE ASSESSEE TO SUBMIT THE DETAILS ON ACCOUNT OF THOSE ISSUES. THERE IS NOT A WHISPER IN THE ASSESSMENT ORDER ON THIS ISSUE NOR ANY REPLY BY THE ASSESSEE ON THE ABOVE ISSUES. 5. FROM THE FACTS AND SUBMISSIONS IT IS VERY CLEAR THAT THERE IS COMPLETE NON APPLICATION OF MIND BY THE ASSESSING O FFICER WHILE PASSING THE ORDER U/S.143(3). SINCE THE ASSESSING OFFICER H AS NOT AT ALL APPLIED HIS MIND WHILE FRAMING THE ASSESSMENT AND THE VITAL ISSUES HAVE NEITHER BEEN CONFRONTED TO THE ASSESSEE NOR CONSIDERED BY T HE ASSESSING OFFICER, THEREFORE, THE ORDER BECOMES BOTH ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5.1 IT HAS BEEN HELD IN VARIOUS JUDICIAL DECISIONS THAT LACK OF ENQUIRY OR NO ENQUIRY BY THE ASSESSING OFFICER WHILE FRAMIN G THE ASSESSMENT MAKES THE ORDER BOTH ERRONEOUS AS WELL AS PREJUDICI AL TO THE INTEREST OF THE REVENUE. SINCE IN THE INSTANT CASE THERE IS NO ENQUIRY AT ALL BY THE ASSESSING OFFICER ON THE 2 VITAL ISSUES AND THERE I S COMPLETE NON APPLICATION OF MIND, THEREFORE, THE ORDER HAS BECOM E ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE, TH EREFORE, HOLD THAT THE LD. CIT, UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE, WAS JUSTIFIED IN 4 INVOKING THE JURISDICTION UNDER SECTION 263 OF THE I.T. ACT. THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSE SSEE ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THOSE CASE THERE WERE SOME ENQUIRIES CONDUCTED BY T HE ASSESSING OFFICER AND SOME VIEW HAS BEEN TAKEN. HOWEVER, IN THE INST ANT CASE, THERE IS ABSOLUTELY NO ENQUIRY EITHER BY THE ASSESSING OFFIC ER NOR ANY DETAILS FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSME NT PROCEEDINGS. THEREFORE, THE DECISIONS RELIED ON BY THE LD.COUNSE L FOR THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. C ONSIDERING THE TOTALITY OF THE FACTS OF THE INSTANT CASE WE HOLD THAT THE LD. CIT WAS JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE I.T. ACT. ACCORDINGLY, THE SAME IS UPHELD. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARIN G ITSELF, I.E. ON 03 RD DAY OF JULY 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA ) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED: 05 TH JULY 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT-I, PUNE 4. THE D.R, B PUNE BENCH 5. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE