ITO, New Delhi V. M/s. Jatadhari Builders Pvt. Ltd, New Delhi

ITA 3741/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58969 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Assessment record
• Section: 143(3)

Judgement Text

ITA NO. 3741/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3741/DEL/2010 A.Y. : 2007-08 ITO, WARD 4(2), ROOM NO. 413A, CR BUILDING, IP ESTATE, NEW DELHI VS. M/S JATADHARI BUILDERS PVT. LTD., H-69, GROUND FLOOR, DDA FLATS, ASHOK VIHAR, PHASE-I, NEW DELHI 110 052 (PAN/GIR NO. : AABCJ 6324Q) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. AMOL SINH A , ADV. DEPARTMENT BY : SH. D.K. MISHRA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 27.5.2 010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- (1) THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS AND CONTRARY TO FACTS AND LAW. ITA NO. 3741/DEL/2010 2 (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN RESTRICTING THE ADDITION OF ` 21,55,000/- TO ` 1,07,250/- I.E. 0.5% AS AGAINST 10% MADE BY THE AS SESSING OFFICER ON THE GROSS RECEIPT. (2.1) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IG NORED THE FACT THAT THE ASSESSEE DID NOT FILE ANY EVIDENCE IN SUPPORT OF THE EXPENSES CLAIMED IN PROFIT AND LOSS ACCOUNT AND THE FACT THAT THE BOOKS OF ACCOUNT WERE CORRECTLY REJECTED BY THE ASSESSING OFFICER U/S. 145(3) OF THE IT ACT. (3) THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, OR AMEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF TH E HEARING. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS A PRIVATE LIMITED COMPANY. THE ASSESSEE COMPANY ELECTRO NICALLY FILED ITS RETURN OF INCOME ON 31.10.2007 DECLARING LOSS OF ` 3,326/-. THE RETURN WAS PROCESSED U/S. 143(1) AT THE RETURNED IN COME AND THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. SUBSEQUENT LY, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 14 .12.2009 DETERMINING THE TOTAL INCOME AT ` 21,55,000/-. WHIL E COMPLETING THE ITA NO. 3741/DEL/2010 3 ASSESSMENT, THE ASSESSING OFFICER HAS REJECTED BOO KS AND ACCOUNTS AND HAS INVOKED THE PROVISIONS OF SEC. 145(3) AND A PPLIED THE NET PROFIT @10% ON THE GROSS RECEIPTS OF THE COMPANY OF ` 2,15, 50,000/- DISCLOSED DURING THE YEAR UNDER CONSIDERATION. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND ELABORATELY DISCUSSED THE ISSUE AND CONCLUDED AS UNDER:- IT WAS ALSO CONTENDED ON BEHALF OF THE ASSESSEE TH AT IN THE CASE OF OTHER GROUP COMPANIES M/S RISHIKESH PROPETIES PVT. LTD., M/S RISHIKHESH BUILDCON PVT. LTD. AND M/S RUPA PROMOTERS PVT. LTD. THE IDENTICAL ADDITIONS MADE BY THE ASSESSING OFFICER WERE DELETED AND THE RESULTS DEC LARED BY THE COMPANY WERE ACCEPTED AS CORRECT. THE COMPANY IS ONE OF THE GROUP COMPANIES HAVING SIMILAR NATURE OF ACTIVITIES, SAME CONTRACTEE PARTY, SAME BUSINESS, SAME DIRECTORS, AND UNDER THE SAME CIRCUMSTANCES, ITS AD DITION MADE IN THE TWO OF THE GROUPS WHICH WAS DELETED BY T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND ITAT CANNOT BE HELD JUSTIFIED IN THE CASE OF THE ASSESSEE COMPANY. I HAVE ALSO PERUSED THE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL REFERRED TO ABOVE. I FIND THAT ITA NO. 3741/DEL/2010 4 THE APPEALS OF THE REVENUE HAVE BEEN DISMISSED IN TH E CASES OF M/S RISHIKESH BUILDCON PVT. LTD. AND M/S RU PA PROMOTERS LTD FOR ASSESSMENT YEAR 2006-07. HOWEVER IN THE CASE OF M/S RISHIKHESH PROPERTIES PVT. LTD. IT I S SEEN THAT THE DISALLOWANCE OF ` 34,00,000/- (8% OF ` 4,2 5,00,000) MADE BY THE ASSESSING OFFICER OUT OF EXPENSES IN ASSESSMENT YEAR 2006-07 WAS REDUCED TO 0.5% BY LD. COMMISSIONER OF INCOME TAX (APPEALS). AGAINST THE S AID ORDER THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THE DEPARTMENT PREFERRED APPEAL BEFORE ITAT WHO IN ITA NO. 2061/D/2009 VIDE THEIR ORDER DATED 18.12.2009 RESTOR ED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER. FOLLO WING THE DECISIONS OF ITAT IN THE CASES OF M/S RISHIKHESH BU ILDCON PVT. LTD. AND M/S RUPA PROMOTERS PVT. LTD. (SUPRA) AND THAT OF LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THE CA SE OF M/S RISHIKHESH PROPERTIES PVT. LTD. THE DISALLOWANCE IS RESTRICTED TO 0.5% OF THE TOTAL GROSS RECEIPTS OF 2,15,50,000/-. THE ASSESSING OFFICER IS DIRECTED TO MODIFY THE ORDER ACCORDINGLY. THUS, GROUND OF APPEAL NO. 2 IS PARTLY ALLOWED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 3741/DEL/2010 5 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. IT TRANSPIRES THAT THIS TRIBUNAL IN ASSESSEES GROUP COMPANY CASE IN ITA NO. 2061/D/2009 FOR A.Y. 2006- 07 VIDE ORDER DATED 18.12.2009 HAS HELD AS UNDER:- WE HAVE CONSIDERED THE FACTS OF AUTHORITIES BELOW AND THE SUBMISSIONS MADE BY THE LD. DEPARTMENTAL REPRESENTATI VE. THE ASSESSING OFFICER NOT BEING SATISFIED WITH THE EVIDENCE PRODUCED DISALLOWED 8% OF THE CONTRACT RECEIPT AS DISALLOWABLE EXPENDITURE. THUS THOUGH NOT SPECIFIC ALLY MENTIONING ABOUT INVOKING SECTION 44AD, IN A INDIREC T MANNER THIS SECTION WAS APPLIED. ON THE OTHER HAND LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RESTRICTED THE DISALLOWANCE TO 0.5% OF THE CONTRACT RECEIPT AS DI SALLOWABLE EXPENDITURE. NONE OF THE AUTHORITIES HAVE TRIED TO JUSTIFY HOW MUCH EXPENSES ARE DISALLOWABLE. IN THE CIRCUMSTA NCES WE ARE UNABLE TO GIVE ANY FINDING. SINCE THE ASSES SEE IS NOT IN APPEAL, THE ASSESSEE ACCEPTED THAT DISALLOWANCE IS CALLED FOR BUT ONLY QUANTUM IS IN DISPUTE. WE THEREFORE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. T HE ASSESSING OFFICER SHALL ARRIVE AT A FINDING AS TO WHICH EXPENSES ARE NOT ALLOWABLE AND FOR WHAT REASON. FOR THIS PURPOSE THE ASSESSING OFFICER MAY ALSO REFER TO TH E PAST HISTORY OF THE ASSESSEE AS WELL AS SUBSEQUENT YEAR S ASSESSMENT RECORDS TO FIND OUT THE PROFITABILITY OF THE ASSESSEE. THE ASSESSEE MAY ALSO PLACE OTHER COMPA RABLE CASES ON RECORD. THE ASSESSEE IS ALSO REQUIRED TO JUSTIFY ALLOWABILITY OF EXPENSES CLAIMED. ITA NO. 3741/DEL/2010 6 7. WE FIND THAT FACTS OF THE PRESENT CASE ARE ANALO GICAL TO THE ONE DISCUSSED ABOVE BY THE TRIBUNAL. ADHERING TO DOC TRINE OF STARE DECISIS, WE ALSO REMIT THE MATTER BACK TO THE FILE O F THE ASSESSING OFFICER. ASSESSING OFFICER SHALL CONSIDER THE IS SUE IN LIGHT OF THE DIRECTIONS AS GIVEN IN THE AFORESAID TRIBUNALS ORD ER. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORT UNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/3/2012. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 23/3/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A) 5. SR. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES