S.J.Developers & Housing Pvt. Ltd., Bhubaneswar V. ACIT, Corporate Circle-1(2), Bhubaneswar

ITA 417/CTK/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4337 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 02-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: AMBIKA PRASAD MOHATNY
• Keywords: Principle of natural justice; Corroborative evidences; Revised return
• Section: 133A; 2

Judgement Text

1 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 417 /CTK/201 6 ASSESSMENT YEAR : 201 2 - 13 SJ DEVELOPERS & HOUSING PVT LTD., PLOT NO.A/103, MIKNIK MALL, RAJDHANI GAS BUILDING OPP. ISCO N TMPLE, BHUBANESWAR. VS. ACIT, CORPORATE CIRCLE 1(2), BHUBANESWAR. PAN/GIR NO. AAECA 8702 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI AMBIKA PRASAD MOHATNY, DR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 26 / 0 2 / 201 8 DATE OF PRONOUNCEMENT : 2 8 / 0 2 / 201 8 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 1, BHUBANESWAR DATED 2.9.2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT (APPEALS) HAS BEEN UNLAWFUL BY SUSTAINING THE ADDITION OF RS. 25,04,095/ - IN RESPECT OF COMMISSION INCOME. 2. THE LEARNED CIT (APPEALS) CONF IRMED THE ADDITION, IN A BIASED MANNER FOR WANT OF EVIDENCE IN SUPPORT OF AN ESTIMATED INCOME RECOGNIZED BY THE ASSESSEE, WITHOUT HAVING ANY BASIS OF ENHANCEMENT OF THE ESTIMATED INCOME AND WITHOUT FINDING ANY SPECIFIC DEFICIENCY IN THE ESTIMATE OF THE ASS ESSEE, EITHER BY THE AO OR BY HIMSELF. 2 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 3. THE LEARNED CIT (APPEALS) IS WRONG IN SUSTAINING THE DISALLOWANCE OF EXPENSES PAID AMOUNTING TO RS 1,81,395/ - . 4. THE LEARNED CIT (APPEALS) IS WRONG IN DISMISSING THE ADDITIONAL GROUND NO.3, ON WRONGFUL REJECTION OF BOOKS OF THE ASSESSEE AND ESTIMATION OF INCOME BY MAKING ADHOC DISALLOWANCE, WITHOUT ANY SPECIFIC DEFICIENCY OBSERVED FROM THE BOOKS OF THE ASSESSEE BY AO. 5. THE LEARNED CIT(APPEALS) HAD FAILED TO PROVIDE REASONABLE OPPORTUNITY TO THE APPELLANT FOR RE BUTTAL THEREFORE THE ORDER IS DEVOID OF NATURAL JUSTICE AND BAD IN LAW. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPERS AND REAL ESTATE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOU ND THAT THE ASSESSEE HAS DISCLOSED INCOME OF RS.69,67,437/ - IN THE HEAD OTHER INCOME IN THE AUDITED ACCOUNTS. DURING THE SURVEY OPERATION ON 20.11.2012, A COMPUTATION SHEET COMPUTING COMMISSION OF RS.94,71,532/ - WAS FOUND RELATING TO THE RELEVANT YEAR, REFLECTING THE FIGURE AS ON 26.12.2011. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY COMMISSION HAS NOT BEEN DECLARED AS INCOME FOR THE ASSESSMENT YEAR 2012 - 13. IN RESPONSE THERETO, THE DIRECTOR OF THE ASSESSEE COMPANY SUBMITTED AS U NDER: THOUGH THE COMMISSION HAS ACCRUED TO THE COMPANY SCHEME WAS NOT DECLARED AS INCOME DUE TO THE FAT THAT ASIANA HOMES PVT LTD., DID NOT CONFIRM THE AMOUNT. HOWEVER, IN VIEW OF DETAILE D DISCUSSION MADE TODAY DURING THE COURSE OF SURVEY PROCEEDINGS, I WISH TO FILE A REVISED RETURN FOR THE ASSESSMENT YEAR 2012 - 13 DISCLOSING SUCH INCOME ON PAYMENT OF SELF ASSESSMENT TAX. I SHALL FURNISH DETAILED CALCULATION ON 23.11.2012 AFTER CONSULTATION WITH ASIANA HOMES PVT. LTD., 4. DURING THE COURSE OF SCRUTINY PR OCEEDINGS, THE ASSESSEE SUBMITTED THE CALCULATION OF INCENTIVE RECEIVABLE ACCRUED TO IT AT RS.69,67,437/ - . HOWEVER, THE ASSESSING OFFICER OBSERVED THAT THE STATISTICS SUBMITTED ARE 3 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 NOT SUPPORTED BY ANY AUTHENTICATION IN RESPECT OF ADOPTION OF RATE OF SALE PER SQUARE FEET. RATHER, THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY HAVE MORE PRECEDENCE WITH MORE EVIDENTIAL VALUE. THE ASSESSEE HAS ADMITTED THE UNDISCLOSED ON THIS ACCOUNT AS APPARENT AS APPARENT AND OFFERED TO FILE THE REVISED RETURN DISCLOSING SUCH INCOME. IN VIEW OF ABOVE, THE ASSESSING OFFICER ADDED THE BALANCE INCOME OF RS.25,04,095/ - (RS.4,71,532 RS.69,67,437/ - ) TO THE TOTAL INCOME OF THE ASSESSEE. 5. SIMILARLY, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PROVE THE EXPENSES OF RS.36,2 7,893/ - CLAIMED IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSEE FILED SUPPORTING EVIDENCES IN SHARE OF VOUCHERS AND REGISTERS. THE ASSESSING OFFICER OBSERVED THAT THE VOUCHERS PRODUCED ARE SELF MADE AND NOT FULLY VERIFIABLE AND CASH PAYMENTS WERE MADE IN MO ST OF THE CASE. IN VIEW OF ABOVE, THE ASSESSING OFFICER DISALLOWED 10% OF TOTAL EXPENSES OF RS.36,27,893/ - AND ADDED RS.3,62,790/ - TO THE INCOME OF THE ASSESSEE. 6. ON APPEAL, WITH REGARD TO COMMISSION PAYMENT, IN THE WRITTEN SUBMISSION, IT WAS STATED AS UNDER: I ) THE STATEMENT GIVEN DURING THE SURVEY WAS A PROVISIONAL AND NOT THE FINAL. II) THE DIRECTOR OF THE ASSESSEE COMPANY WAS NOT AWARE OF THE ACCOUNTS AND MADE THE STATEMENT OUT OF PRESSURE. III) THE COMMISSION WAS NOT DECLARED AS INCOME AS ASIANA HO MES PVT LTD., DID NOT CONFIRM THE AMOUNT. HOWEVER, STATEMENT WAS MADE TO FURNISH DETAILED CALCULATION ON 23.11.2012 AFTER CONSULTATION WITH ASIANA HOMES PVT LTD. 4 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 IV) THE AO HAS NOT FOUND ANY MISTAKE OR NON - DISCLOSURE OF INCOME BY THE ASSESSEE. V) ALTHOUGH DURING THE SURVEY, IT WAS SUBMITTED TO FILE THE REVISED RETURN, BUT LATER ON IT WAS NOT FOUND THAT COMMISSION INCOME SHOULD BE INCREASED AND, THEREFORE, THE ORIGINAL INCOME FILED WAS CORRECT. VI) SEVERAL JUDICIAL PRONOUNCEMENTS ON THIS ISSUE WAS REFERRED BY THE ASSESSEE. 7. THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING BY OBSERVING AS UNDER: 2,2 I HAVE CONSIDERED THE MATTER AND PERUSED THE MATERIALS ON RECORD. IT IS A FACT THAT IN THE COURSE OF SURVEY PROCEEDING, A SHEET OF PAPER WAS FOUND IN THE BUSI NESS PREMISES OF THE ASSESSEE WHEREIN THE AMOUNT OF COMMISSION DUE TO THE ASSESSEE FROM THE JOINT DEVELOPER M/S. ASIANA HOMES (P).LTD. WAS CALCULATED AT RS.94,71,532/ - AS ON 26.12.2011. BASED ON THIS CALCULATION, THE ASSESSEE, IN THE COURSE OF SURVEY ADMIT TED THAT THE COMMISSION DUE FROM M/S. ASIANA HOMES (P) LTD. WHICH HAD NOT BEEN DISCLOSED AS INCOME IN THE RETURN ALREADY FILED WOULD BE DISCLOSED AFTER CHECKING UP OF THE FACTS AND FIGURES AND A REVISED RETURN WOULD BE FILED. ACCORDINGLY, A REVISED RETURN WAS FILED AFTER THE SURVEY BUT THE AMOUNT OF COMMISSION SHOWN IN THAT RETURN STOOD AT RS.69,67,437/ - ONLY. IN THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSEE FILED A CALCULATION SHEET BEFORE THE AO AND CLAIMED THAT THE CALCULATION OF COMMISSION AT RS.94, 71,532/ - IN THE SHEET OF PAPER FOUND AT THE TIME OF SURVEY WAS NOT CORRECT AND THE CORRECT CALCULATION WOULD BE RS.69,67,437/ - , HOWEVER, NO SATISFACTORY EVIDENCE WAS FILED BEFORE THE AO IN SUPPORT OF THE CALCULATION OF COMMISSION AT RS.69,67,437/ - . IN THE COURSE OF APPEAL HEARING, THE SAME CALCULATION SHEET HAS BEEN FILED AND IT IS CONTENDED THAT THE CALCULATION HAS BEEN MADE CORRECTLY. HOWEVER, IN ABSENCE OF ANY SUPPORTING EVIDENCE, THE CALCULATION SO MADE CANNOT BE ACCEPTED AS CORRECT AND AUTHENTIC. NO CO NFIRMATION FROM THE JOINT DEVELOPER M/S. ASIANA HOMES (P) LTD. HAS BEEN FILED EITHER BEFORE THE AO OR BEFORE THE UNDERSIGNED TO SHOW THAT THE COMMISSION DUE TO THE ASSESSEE FOR THE PREVIOUS YEAR 2011 - 12 IS ACTUALLY RS.69,67,437/ - . IN VIEW OF THIS, THE ACTI ON OF THE AO TO CONSIDER THE AMOUNT OF COMMISSION AT RS.94,71,532/ - CANNOT BE QUESTIONED. HENCE, THE ADDITION OF RS.25,04,095/ - ON ACCOUNT OF COMMISSION IS CONFIRMED. 5 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 8. BEFORE US, LD A.R. SUBMITTED THAT DURING THE COURSE OF SURVEY CONDUCTED BY THE REVENUE ON 20.11.2012, A STATEMENT WAS FOUND REGARDING THE PROVISION FOR COMMISSION INCOME COMPUTED AT RS.94,71,532 AS ON 26.12.2011. IT WAS STATED THAT IT IS A PROVISION AND NOT A FINAL ONE. THIS STATEMENT WAS GIVEN BY THE DIRECTOR OF THE ASSESSEE, WHO IS FULLY UNWARE F THE ACCOUNTS TO DISCLOSE SUCH HIGHER COMMISSION UNDER PRESSURE. HOWEVER, THE DIRECTOR PROMISED TO FURNISH THE DETAILED CALCULATION ON 23.11.2012 AFTER CONSULTATION WITH ASIANA HOMES PVT. LTD. LD A.R. SUBMITTED THAT THE ASSESSEE HAD ADMITTED INCREASED COMMISSION INCOME BUT AT THE TIME OF FILING REVISED RETURN BASED ON THE SURVEY DOES NOT FINDS THAT THE COMMISSION INCOME SHOULD BE INCREASED AND THE AMOUNT OF COMMISSION INCOME FILED AT THE TIME OF ORIGINAL WAS CORRECT. LD A.R. RELIED ON THE DECISION OF MUMBAI BENCHES OF THE TRIBUNAL IN THE CASE O DCIT S. SAMTA MARINE KAKINADA, 18 SOT 135 (MUM), WHEREIN, IT WAS HELD THAT IN THE ABSENCE OF ANY MATERIAL ON RECORD THAT THE EXPENDITURE WAS FALSE, NO ADDITION COULD BE MADE MERELY ON THE BASIS OF DISCLOSURE MADE DURING SURVEY. HE ALSO STATED THAT SAME VIEW HAS BEEN TAKEN BY THE DELHI BENCHES OF THE TRIBUNAL IN THE CASE OF ACIT VS SMT. USHA RANI TALLA,(2010) 6 ITR (TRIB) 37(EL). LD A.R. ALSO RELIED ON THE DECISION OF HONBLE MADRA S HIGH COURT IN THE CASE OF CIT VS. S.KHADER KHAN SON (2008) 300 ITR 157 (MAD), WHEREIN, IT WAS HELD THAT STATEMENT TAKEN DURING THE SURVEY U/S.133A HAS NO EVIDENTIARY VALUE AS SECTION 133A DOES NOT EMPOWER THE ASSESSING OFFICER TO ADMINISTER OATH AND TAKE A SWORN 6 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 STATEMENT. HE, THEREFORE, PRAYED THAT SINCE THE DIRECTOR OF THE ASSESSEE COMPANY HAD STATED TO FILE THE REVISED RETURN WITH ENHANCED INCOME ON COMMISSION BUT LATER ON IT WAS FOUND THAT THERE WAS NO ENHANCED COMMISSION INCOME, THEREFORE, IT WAS ST ATED THAT NO ENHANCED COMMISSION SHOULD BE SHOWN. 9. CONTRA, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, DURI NG THE COURSE OF SURVEY OPERATION , A SHEET OF PAPER WAS FOUND IN THE BUSINESS PREMISES OF THE ASSESSEE WHEREIN THE AMOUNT OF COMMISSION DUE TO THE ASSESSEE FROM THE JOINT DEVELOPER M/S. ASIANA HOMES (P).LTD. WAS CALCULATED AT RS.94,71,532/ - AS ON 26.12.201 1. BASED ON THIS CALCULATION, THE DIRECTOR OF THE ASSESSEE , IN THE COURSE OF SURVEY ADMITTED THAT THE COMMISSION DUE FROM M/S. ASIANA HOMES (P) LTD. WHICH HAD NOT BEEN DISCLOSED AS INCOME IN THE RETURN ALREADY FILED WOULD BE DISCLOSED AFTER CHECKING UP OF THE FACTS AND FIGURES AND A REVISED RETURN WOULD BE FILED. IT IS THE CONTENTION OF LD A.R. THAT THE DIRECTOR OF THE ASSESSEE COMPANY WAS NOT AWARE OF THE FINANCIAL TRANSACTIONS OF THE ASSESSEE BUT UNDER DURESS STATED THAT IF THERE IS ANY ENHANCED COMMISSI ON INCOME, A REVISED RETURN WOULD BE FILED AFTER THE SURVEY . BUT LATER ON WHEN IT WAS FOUND THERE WAS NO ENHANCED COMMISSION INCOME, IN THE REVISED RETURN IT WAS 7 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 STATED THAT THE AMOUNT OF COMMISSION SHOWN IN THAT RETURN STOOD AT RS.69,67,437/ - ONLY. IN TH E COURSE OF ASSESSMENT PROCEEDING, THE ASSESSEE FILED A CALCULATION SHEET BEFORE THE AO AND CLAIMED THAT THE CALCULATION OF COMMISSION AT RS.94,71,532/ - IN THE SHEET OF PAPER FOUND AT THE TIME OF SURVEY WAS NOT CORRECT AND THE CORRECT CALCULATION WOULD BE RS.69,67,437/ - . WE FIND THAT THE CIT(A) IN HIS ORDER HAS STATED THAT N O CONFIRMATION FROM THE JOINT DEVELOPER M/S. ASIANA HOMES (P) LTD. HAS BEEN FILED EITHER BEFORE THE AO OR BEFOR E HIM TO SHOW THAT THE COMMISSION DUE TO THE ASSESSEE FOR THE PREVIOUS YEAR 2011 - 12 IS ACTUALLY RS.69,67,437/ - . WE ALSO FIND FORCE IN THE SUBMISSION OF LD A.R. OF THE ASSESSEE BASED ON JUDICIAL DECISIONS THAT STATEMENT TAKEN DURING SURVEY U/S.133A HAS NO EVIDE NTIARY VALUE AS SECTION 133A DOES NOT EMPOWER THE ASSESSING OFFICER TO ADMINISTER OATH. WE FIND THAT IF THE ASSESSEE HAS ADHERED TO HIS FIRST DISCLOSED AMOUNT OF RS.69,67,437/ - , IT WAS THE DUTY OF THE DEPARTMENT TO CALL M/S. ASIANA HOMES (P) LTD., TO CONFI RM THE COMMISSION. IN VIEW OF ABOVE, IN ORDER TO RENDER SUBSTANTIAL JUSTICE TO THE ASSESSEE, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO CON FIRM FROM THE JOINT DEVELOPER M/S. ASIANA HOMES (P) LT D. REGARDING ACTUAL COMMISSION PAYMENT AND PASS A FRESH ASSESSMENT ORDER AS PER LAW AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 11. SINCE WE HAVE RESTORED THE ISSUE OF COMMISSION TO THE FILE OF THE ASSESSING OFFICER, THE OTHER GROUND REGARDING DISALLOWANCE OF EXPENSES 8 ITA NO. 417/CTK/2016 ASSESSMENT YEAR : 2012 - 13 PAID OF RS.1,81,395/ - IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 1 2 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 2 8 / 0 2 /201 8 . S D / - S D / - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 2 8 / 0 2 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SJ DEVELOPERS & HOUSING PVT LTD., PLOT NO.A/103, MIKNIK MALL, RAJDHANI GAS BUILDING OPP. ISCON TMPLE, BHUBANESWAR 2. THE RESPONDENT. ACIT, CORPORATE CIRCLE 1(2), BHUBANESWAR 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//