Income Tax Officer, Ward -1(1), Panaji., Panaji V. M/s Aisha Contruction., Panaji

ITA 411/PAN/2014

• Counselvise Citation: 41124114 RSA 2014
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 03-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNIL DESH
• Section: 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BABNSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 411 /PNJ/2014 (ASST. YEAR : 2003 - 0 4 ) ACIT, CENTRAL CIRCLE, PANAJI. VS. M/S. AISHA CONSTRUCTION, RANI PRAMILA ARCADE, PANAJI, GOA. PAN NO. AADFA 5374 L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE. DEPARTMENT BY : SHRI SUNIL DESHPANDE - D.R. DATE OF HEARING : 09 / 0 3 /2015 . DATE OF PRONOUNCEMENT : 20 / 0 3 /201 5 . O R D E R PER D.T. GARASIA , J .M THIS APPEAL BY THE DEPARTMENT AGAINST THE ORDER OF LD. CIT (A), PANAJI DATED 01 /0 9 /201 4 FOR THE A.Y. 200 3 - 0 4 . 2. THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL READS AS UNDER: - 2. THE LD. CIT(A) HAS ERRED IN ADMITTING FRESH EVIDENCE WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER UNDER RULE 46A OF THE INCOME TAX RULES REGARDING FORFEITURE OF ADVANCE OF RS. 1,12,00,000/ - PAID BY THE ASSESSEE TO THE OWNER OF THE LAND FOR DEVELOPMENT OF LAND WHICH RESULTED 2 IN REDUCTION OF CLOSING W.I.P. VALUATION, WHEN THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS EVEN AFTER RECEIVING SUFFICIENT NUMBER OF OPPORTUNITY TO DO SO AND OUT THE BALANCE AMOUNT RS. 47,33,270/ - , 50% RS. 23,66,635/ - IS UPHELD AND BALANCE DELETED WITHOUT GIVING ANY REASON. 3. SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 01/12/2003 DECLARING LOSS OF RS. 1,65,21,170/ - . A NOTICE U/S. 142(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT', FOR SHORT) WAS ISSUED TO FILE PROJECT - WISE DETAILS OF THE OPENING WORK - IN - PROGRESS, CLOSING WORK - IN - PROGRESS, DETAILS OF EXPENSES & SALES ETC. ON PERUSAL OF THE DETAILS, IT WAS NOTI CED THAT THE CLOSING WIP OF SANGOLDA PLOT WAS RS. 3,38,46,350/ - AND CLOSING WIP WAS AT RS. 1,82,99,150/ - . NO SUCH SALES ARE CREDITED TO THE P & L ACCOUNT. ASSESSEE WAS ASKED EXPLANATION FOR SELLING THE LAND AT LESS THAN THE COST . AS PER THE TRADING AND P & L ACCOUNT, THE OPENING WIP IS RS. 5,70,00,000/ - . ASSESSEE WAS ASKED TO FURNISH DETAILS . AS PER THE DETAILS, OPENING COST OF UNSOLD AND UNDEVELOPED LAND AT SAGOLDA WAS RS. 3,38,46,350/ - AND AS PER THE CLOSING WIP, THE COST OF LAND WAS SHOWN AT RS. 1,82,99,150/ - . ASSESSEE DECLARED PROFIT ON THE REMAINING THREE PROJECTS AS UNDER: - DESCRIPTION OF PROPERTY OPENING WIP CLOSING WIP SALES BOOKED AT CHIMBEL 2,00,15,150 26,67,500 1,73,47,650 3 AT MERCES 18,38,500 2,58,500 15,80,000 AT TALEIGAO 13,00,000 12,65,000 35,000 2,31,53,650 41,91,000 1,89,62,650 THE ASSESSEE HAS CREDITED TO THE P & L A/C THE SALE OF FLATS, SHOPS PLOTS AT RS. 2,27,21,950/ - . THE DIFFERENCE OF THESE TWO I.E. RS. 2,27,21,950/ - ( - ) RS. 1,89,62,650/ - = RS. 37,59,300/ - APPEARS TO BE THE PROFIT DECLARED FOR THE LAND AT SANGOLDA. ACCORDINGLY, T HE CLOSING WIP WAS TO BE WORKED OUT AS UNDER: - OPENING WIP 3,38,46,350 LESS: PROFIT BOOKED 37,59,300 3,00,87,050 ADD: CLOSING WIP OF THE REMAINING THREE PROJECTS AS ABOVE 41,91,000 3,42,78,050 B/F 3,42,78,050 LESS : CLOSING WIP AS PER P & L A/C 1,17,87,900 FROM THE ABOVE COMPUTATION, EITHER THE CLOSING WIP IN THE CASE OF SANGOLDA PROPERTY HAS BEEN UNDERVALUED OR THE SALE PRICE OF THE SAID PROPERTY HAS NOT BEEN DISCLOSED FULLY. IN ABSENCE OF FULL DETAILS, THE ASSESSING OFFICER DISALLOWED A SUM OF RS. 1,65,21, 170/ - 4 . THE MATTER WAS CARRIED TO THE LD. CIT(A) AND THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. NOW THE DEPARTMENT IS IN APPEAL. 4 5. LEARNED DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER. NONE APPEARED ON BEHALF OF THE ASSESSEE . 6. WE HAVE HEARD LEARNED DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FROM THE ORDER OF LD. CIT(A) IN PARA 6 THAT THE ASSESSEE IS A CONTRACTOR AND ALSO ENGAGED IN THE BUSINESS OF DEVELOPMENT OF REAL ESTATE . THE ASSESSING OFFICER NOTICED THAT THE OPENING WIP OF SANGOLDA PLOT WAS SHOWN AT RS. 3,38,46,350/ - WHEREAS CLOSING WIP WAS AT RS. 1,82,99 , 150/ - . THE ASSESSING OFFICER CONCLUDED THAT NO CORRESPONDING SALE WAS DECLARED BY THE ASSESSEE. THE SALE HAS NOT BEEN DISCLOSED OR THE CLOSING WIP HAS BEEN UNDERVALUED . WE FIND THAT DURING THE APPELLATE PROCEEDINGS, THE LD. CIT(A) IN HIS ORDER HAS HELD THAT REGARDING CLOSING OF WIP VALUATION, THE ASSESSEE HAD ADVANCED A SUM OF RS. 1,12,00,000/ - AGAINST A POWER OF ATTORNEY HOLDER FOR LAND DEVELOPMENT AND THEREFORE SAME WAS INCLUDED IN THE OPENING W.I.P. THE OWNER OF THE LAND CANCELLED THE POWER OF ATTORNEY AND FORFEITED THE ADVANCE AMOUNT , AS THE ASSESSEE COULD NOT FULFIL THE CONDITIONS LAID DOWN IN THE AGREEMENT . HENCE, THE ADVANCE PAID WAS LOST FOREVER AND THE SAME WAS NOT INCLUDED IN THE CLOSING WIP . THE ASSESSING OFFICER GIVEN MANY OPPORTUNITIES, BUT THE ASSESSEE DID NOT FURNISH THE DETAILS . THE LD. CIT(A) HAS NOT VERIFIED THE DOCUMENTARY 5 EVIDENCE REGARDING FORFEITURE OF RS. 1,12,00,000/ - PAI D BY THE ASSESSEE TO THE OWNER OF THE LAND FOR DEVELOPMENT. THE ASSESSEE DID NOT PRODUCE THIS EVIDENCE BEFORE THE ASSESSING OFFICER, THEREFORE IN OUR OPINION, LD. CIT(A) WITHOUT VERIFYING THIS DOCUMENTARY EVIDENCE HAS COME TO THE CONCLUSION THAT THE ASSES SEE HAS EXPLAINED REASON FOR VALUATION OF CLOSING WIP. THE DUTY OF THE LD. CIT(A) IS TO VERIFY THE DOCUMENTS IF ASSESSING OFFICER HAS NOT VERIFIED THE SAME . WE FIND THAT THERE IS NO WHISPER ABOUT THIS THAT LD. CIT(A) HAS NOT VERIFIED THIS . THEREFORE , WE REVERSE THE FINDING OF LD. CIT(A) AND RESTORE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER, WHO SHOULD VERIFY THE AGREEMENT TO SALE AS STATED BY THE LD. CIT(A) A S THE AMOUNT IS FORFEITED OR NOT . THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE MATTER AFRESH AFTER DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSE. ( ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH , 201 5 ). SD/ - SD/ - (P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 TH MARCH , 201 5 . VR/ - 6 COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI