DCIT, New Delhi V. M/s. Unitech Realty Pvt. Ltd., New Delhi

ITA 3732/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3817 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 25-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUMIT MANGAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO S . 6462 /DEL/201 3 & 3732/DEL/2014 A.YRS. : 2009-10 & 2010-11 DCIT, CIRCLE 18(1), NEW DELHI VS. M/S UNITECH REALITY PVT. LTD., 6, COMMUNITY CENTRE, SAKET, NEW DELHI 110 017 (AAACR4290E) (ASSESSEE) (RESPONDENT) REVENUE BY : MS. RACHNA SINGH, CIT(DR) ASSESSEE BY : SH. SUMIT MANGAL, ADV. & MS. KANIKA JAIN, ADV. ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THESE APPEALS AGAINST THE RESP ECTIVE IMPUGNED ORDERS OF THE LD. CIT(A)-XXI, NEW DELHI R ELEVANT TO ASSESSMENT YEARS 2009-10 & 2010-11 RESPECTIVELY. 2. SINCE THE ISSUES INVOLVED IN THESE APPEALS WERE I DENTICAL, HENCE, THE APPEALS WERE HEARD TOGETHER AND ARE BEIN G DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 3. THE GROUNDS RAISED IN THE REVENUE S APPEAL FOR ASSESSMENT YEAR 2009-10 READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT ERRED IN DELETING ADDITION OF RS. 32,72,07,299/- MADE BY THE AO UNDER THE HEAD BUSINESS PROFIT, WITHOUT APPRECIATING THE TOTALITY OF FACTS DISCUSSED AND ALSO CASE LAWS MENTIONED IN THE ASSESSMENT ORDER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN DELETING ADDITION OF RS. 2,03,86,732/- ON ACCOUNT OF LOSS UNDER MAINTENANCE CHARGES, WITHOUT APPRECIATING THAT THE SAID PROJECT WAS TREATED AS COMPLETED ON THE LAST DAY OF THE PREVIOUS YEAR I.E. 31.3.2009, DUE TO THE FACT THAT ALL MAJOR WORK IN THE PROJECT WORK WAS COMPLETED AND POSSESSION OF 504 FLATS HAD BEEN GIVEN DURING THE YEAR OUT OF TOTAL 506 FLATS. 3. THE APPELLANT CRAVES, LEAVE OR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD, OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 4. THE GROUNDS RAISED IN REVENUES APPEAL FOR ASSES SMENT YEAR 2010-11 READ AS UNDER:- 3 1. LD. CIT(A) HAD ERRED IN DELETING ADDITION AMOUNTING TO RS. 2,37,15,070/- MADE BY THE AO BEING DIFFERENCE BETWEEN MAINTENANCE INCURRED BY ASSESSEE IN MAINTAINING THE BUILDING FLATS CONSTRUCTED BY ASSESSEE CHARGES CONTRIBUTION TOWARDS MAINTENANCE CHARGES RECEIVED FROM FLAT OWNERS, WITHOUT APPRECIATING THE REASONING FOR SUCH DISALLOWANCE. 2. LD. CLT(A) HAD ERRED IN DELETING ADDITION AMOUNTING TO RS. 11,82,84,871/- BEING IT EXPANSES SHOWN TOWARDS PROJECT-I (UNIWORLD GARDEN-I) WITHOUT APPRECIATING THE COGENT REASONING FOR HOLDING THE SAID PROJECT TO BE COMPLETED IN AY 2009-10, WHICH IS CONFIRMED BY FACTS ADMITTED BY ASSESSEE DURING THE CURRENT YEARS ASSESSMENT PROCEEDINGS. 3. LD. CLT(A) HAD ERRED IN DELETING ADDITION AMOUNTING TO RS. 7,75,60,966/- BEING EXPANSES INTEREST FORGONE BY ASSESSEE ON THE DEPOSITS ADVANCED TO ITS HOLDING COMPANY VIZ. UNITECH LTD. WITHOUT APPRECIATION THE FACTS & REASONING MENTIONED IN ASSESSMENT ORDER ALSO THE FACT THAT HON'BLE SUPREME COURT IN ITS ORDER DATED 30.04.2012 IN THE CASE OF ADDL. CIT VS. TULIP STAR HOTELS LTD. HAS OBSERVED THAT DECISION OF SA BUILDERS NEED TO BE REVIEWED. 4 4. THE APPELLANT CRAVES, LEAVE OR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD, OR FOREGO ANY GROUNDS(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 5. AT THE TIME OF HEARING, LD. DR RELIED UPON THE ORD ER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. SHE STATED THAT LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS.32,72,07,299/- MADE BY THE AO UNDER THE HEAD BUSI NESS PROFIT; WITHOUT APPRECIATING THE TOTALITY OF FACTS DISCUSSED AND ALSO CASE LAWS MENTIONED IN THE ASSESSMENT; DID NOT DISCUSS TH E MERIT OF THE CASE; NOT GIVEN ANY PROPER JUSTIFICATION FOR THE DELETI ON OF THE ADDITION IN DISPUTE AND ALSO EVEN NOT DISCUSSED THE REMAND REPORT OF THE AO, WHICH IS CONTRARY TO LAW AND THE SAME ITSELF PROVES THAT THAT LD. CIT(A) IN A HURRY MANNER HAS PASSED THE NON- SPEAKING AND LACONIC ORDER WHICH NEEDS TO BE SET ASIDE TO THE FIL E OF THE LD. CIT(A) WITH THE DIRECTIONS TO DECIDE THE ISSUES IN DI SPUTE AFRESH AND PASS A WELL REASONED AND SPEAKING ORDER. IN SUPPORT OF HER ARGUMENTS SHE HAS FILED A COPY OF ORDER PASSED BY T HE HONBLE SUPREME COURT OF INDIA IN THE CASE OF ASSTT. COMMISSIO NER OF INCOME TAX VS. M/S SHUKLA & BROTHERS DECIDED IN SLP( C) NO. 16466 OF 2009 VIDE ORDER DATED 15.09.2010. SHE FURTHER S TATED THAT LD. CIT(A) ALSO ERRED IN DELETING THE ADDITION OF RS. 2 ,03,86,732/- ON ACCOUNT OF LOSS UNDER MAINTENANCE CHARGES, WITHOUT AP PRECIATING 5 THAT THE SAID PROJECT WAS TREATED AS COMPLETED ON THE LAST DAY OF THE PREVIOUS YEAR I.E. 31.3.2009, DUE TO THE FACT THAT ALL MAJOR WORK IN THE PROJECT WAS COMPLETED AND POSSESSION OF 504 FLATS HAD BEEN GIVEN DURING THE YEAR OUT OF TOTAL 506 FLATS. HOW EVER, LD. CIT(A) HAS ADMITTED THIS ADDITIONAL GROUND OF APPEA L BY BRUSHING ASIDE THE REMAND REPORT OF THE AO AND EVEN NOT DISCU SSED THE SAME IN HIS IMPUGNED ORDER AND HELD THAT THE PROJ ECT WAS NOT COMPLETED AND IT WAS THE RESPONSIBILITY OF THE ASSESSE TO MAINTAIN THE FLATS AND INCUR THE NECESSARY EXPENSES FOR THE MAI NTENANCE OF FLATS. FINALLY SHE RELIED UPON THE ORDER OF THE AO IN BOTH CASES. 6. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE RELIE D UPON THE ORDER PASSED BY THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE. HE FURT HER STATED THAT AO HAS ESTIMATED THE ADDITION IN DISPUTE WITHOUT ANY J USTIFICATION AND MADE THE SAME ON ESTIMATE BASIS, WHICH IS NOT TENAB LE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED RECO RDS, ESPECIALLY THE IMPUGNED ORDER. FOR THE SAKE OF CONV ENIENCE, WE ARE REPRODUCING THE RELEVANT FINDINGS OF THE LD. CIT(A) AS UNDER:- I HAVE CONSIDERED THE ORDER OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THERE IS NO PROPER JUSTIFICATION FOR 6 REJECTING THE BOOKS OF ACCOUNTS AS THE AO DID NOT FIND ANY DEFECTS IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE WHICH ARE AUDITED U/S. 44AB. THERE IS ALSO NO BASIS FOR ESTIMATING THE INCOME @15% WHEN THE PROJECT WAS NOT COMPLETED IN THE CURRENT YEAR AS THE ASSESSEE WAS MAINTAINING THE BOOKS OF ACCOUNTS ON THE BASIS OF PROJECT COMPLETION METHOD. THERE IS ALSO MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE PROJECT COMPLETION METHOD ADOPTED BY THE ASSESSEE HAS BEEN AO IN THE PAST AND THE SAME REMAINED UNDISTURBED EVEN AFTER THE SCRUTINY ASSESSMENTS U/S. 143(3) FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THERE IS NO PROPER JUSTIFICATION FOR THE AO TO REJE CT THE BOOKS OF ACCOUNTS AND ESTIMATE THE INCOME @15% AND AS SUCH THE ADDITION MADE BY THE AO IS DELETED. 7.1 AFTER PERUSING THE AFORESAID FINDINGS, WE FIND THAT LD. CIT(A) HAS DELETED THE ADDITION OF RS.32,72,07,299/- MADE BY THE AO UNDER THE HEAD BUSINESS PROFIT; WITHOUT APPRECIATING THE TO TALITY OF FACTS DISCUSSED AND ALSO CASE LAWS MENTIONED IN THE ASSESSM ENT. IT IS ALSO 7 NOTED THAT LD. CIT(A) ALSO NOT DISCUSSED THE MERIT OF T HE CASE AND NOT GIVEN ANY PROPER JUSTIFICATION AND REASONING FOR THE DELETION OF THE ADDITION. IT IS FURTHER NOTED THAT LD. CIT(A) AL SO NOT DISCUSSED THE REMAND REPORT OF THE AO, WHICH IS CONTRARY TO LAW AND ITSELF ESTABLISH THAT LD. CIT(A) HAS PASSED THE NON-SPEAKING AND LACONIC ORDER, WHICH IN OPINION NEED TO BE REMITTED BACK TO TH E FILE OF THE LD. CIT(A) TO DECIDE THE SAME DENOVO. OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE SUPREME COURT OF IND IA IN THE CASE OF ASSTT. COMMISSIONER OF INCOME TAX VS. M/S SHUKLA & BROTHERS DECIDED IN SLP(C) NO. 16466 OF 2009 VIDE ORDER DATED 15.09.2010 WHEREIN, THE HONBLE SUPREME COURT OF INDIA HAS OBSE RVED THAT IT IS TRUE THAT REQUIREMENT OF STATING REASONS FOR JUD ICIAL ORDERS NECESSARILY DOES NOT MEAN A VERY DETAILED OR LENGTHY O RDER, BUT THERE SHOULD BE SOME REASONING RECORDED BY THE LOWER AUTHORITY FOR GRANTING RELIEF TO THE ASSESSEE. THE PURPOSE, AS ALREADY NOTICED, IS TO MAKE THE LITIGANT AWARE OF THE REASONS FOR WHICH THE RELIEF IS DECLINED AS WELL AS TO HELP THE HIGHER COURT IN ASSE SSING THE CORRECTNESS OF THE VIEW TAKEN BY THE LOWER AUTHORITY DE CIDING THE APPEAL OF THE ASSESSEE. IN VIEW OF THE ABOVE, WE ARE UNABLE TO FIND ANY INFIRMITY IN THE ARGUMENTS ADVANCED ON BEHALF OF THE DEPARTMENT, THAT NO REASONS HAVE BEEN RECORDED FOR R EJECTING THE CONTENTIONS RAISED, THIS LEGAL INFIRMITY HAS, IN FA CT, PREJUDICIALLY 8 AFFECTED THE CASE OF THE ASSESSEE BEFORE US. HENCE, WE ARE UNABLE TO SUSTAIN THE ORDER OF THE LD. CIT(A) AND F OR THE AFORE- RECORDED REASONS, WE SET ASIDE THE IMPUGNED ORDER AN D REMIT BACK THE CASE TO THE FILE OF THE LD. CIT(A) WITH TH E DIRECTION TO HEAR THE CASE DE NOVO AND PASS APPROPRIATE AND SPEA KING ORDER IN ACCORDANCE WITH LAW, AFTER GIVING ADEQUATE OPPORT UNITY OF BEING HEARD. 8. AS REGARDS OTHER GROUNDS ARE CONCERNED, SINCE W E HAVE REMITTED THE BACK THE ISSUE RAISED IN GROUND NO. 1 TO THE FILE OF THE CIT(A) WITH THE AFORESAID DIRECTIONS GIVEN IN P ARA NO. 7 TO 7.1 AS AFORESAID, HENCE, THE GROUND NO. 2 IS ALSO R EMITTED TO THE FILE OF THE LD. CIT(A) WITH THE SIMILAR DIRECTIO NS AS GIVEN FOR GROUND NO. 1, AS AFORESAID. 9. WITH REGARD TO ITA NO. 3732/DEL/2014 (AY 2010-1 1) IS CONCERNED, FOLLOWING THE CONSISTENT VIEW AS TAKEN I N AY 2009- 10 IN ITA NO. 6462/DEL/2013, AS AFORESAID, THE GROUND S RAISED IN AY 2010-11 ALSO STAND REMITTED TO THE FILE OF TH E LD. CIT(A) WITH THE SIMILAR DIRECTIONS AS GIVEN IN ASSESSMENT YEAR 2009-10 IN ITA NO. 6462/DEL/2013 IN ASSESSEES CASE. 9 10. IN THE RESULT, BOTH THE REVENUE APPEALS ARE ALLO WED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 24/01/2018. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 24/01/2018 COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES