M/s. Nehar's And Associates Private Limited, Guwahati V. Income tax Officer, Ward-3(5), Guwahati

ITA 417/GTY/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2782 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 11-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, GUWAHATI E-COURT AT KOLKATA BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER I.T.A. NO.417/GAU/2019 ASSESSMENT YEAR: 2015-16 M/S. NEHARS AND ASSOCIATES PVT. LTD.APPELLANT CHRISTIAN BASTI, G.S. ROAD, GUWAHATI-781005. [PAN:AABCN7629L] VS. ITO, WARD-3(5), GUWAHATI.........RESPONDENT APPEARANCES BY: SHRI D.K. BISWAL, AR, APPEARED ON BEHALF OF THE APPELLANT. SHRIAMITAVA SEN, JCIT, SR. DR, APPEARED ON BEHALF OF THE RESPONDENT. DATE OF CONCLUDING THE HEARING :MARCH 19, 2021 DATE OF PRONOUNCING THE ORDER :APRIL 30, 2021 ORDER THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDERDATED 12.07.2019OF THE COMMISSIONER OF INCOME TAX (APPEALS), GUWAHATI. THE ASSESSEE IN THIS APPEAL HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS)-2, GUWAHATI IS NOT JUSTIFIED FOR ISSUINGDIRECTION U/S 250 OF THE I.T. ACT TO THE ASSESSING OFFICERFOR CONDUCTING ENQUIRY IN RESPECT TO THE STAGES OFCOMPLETION OF EACH PROJECTS AT THE END OF EACHASSESSMENT YEAR WHEN THE APPELLANT DECLARED THAT THEAPPELLANT HAS BEEN FOLLOWING THE METHOD OF PROJECTCOMPLETION AND THE METHOD OF COMPLETION & SALE OFAPARTMENT METHOD FOR FILING THE RETURN OF INCOME FOR THEASSESSMENT YEAR 2015-16 ALTHOUGH RELIEF WAS ALLOWED TOTHE APPELLANT AS PRAYED FOR VIDE ORDER DATED 12.07.2019. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-GUWAHATI IS NOT JUSTIFIED IN ISSUING DIRECTION U/S 250OF THE I.T. ACT TO THE ASSESSING OFFICER FOR SUBMITTING THEREPORT REGARDING ACTION TAKEN ON THE ALLEGED FAILURE OFCOMPUTING THE INCOME ON THE BASIS OF ADOPTINGPERCENTAGE OF COMPLETION METHOD ALTHOUGH THE LD.COMMISSIONER OF INCOME TAX (APPEALS)-2, GUWAHATIALLOWED RELIEF VIDE ORDER DATED 12.07.2019 AS PERGROUNDS OF APPEAL TAKEN BY THE APPELLANT FOR THEASSESSMENT YEAR 2015-16. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS)-2, GUWAHATI IS ALSO NOT JUSTIFIED IN ISSUINGDIRECTION /S 250 OF THE I.T. ACT TO THE ASSESSING OFFICERTO CONDUCT AN ENQUIRY WITH RESPECT TO THE STAGES OFCOMPLETION OF EACH PROJECT AT THE END OF EACH ASSESSMENTYEAR TAKING INTO CONSIDERATION OF ESTIMATED COST INCURRED,SALEABLE AREA, ESTIMATED PROJECT REVENUE && THE POSITIONOF THE ADVANCES RECEIVED FROM THE CUSTOMERS AND TOCOMPARE THE NET PROFIT RETURNED WITH ESTIMATED PROFITS ONPOCM I.E. PERCENTAGE OF COMPLETION METHOD FOR EACH OFTHE ASSESSMENT YEARS PRIOR TO THE 2 I.T.A. NO.417/GAU/2019 M/S. NEHARS AND ASSOCIATES PVT. LTD ASSESSMENT YEAR: 2015-16 ASSESSMENT YEAR 2015-16 & SUBSEQUENT ASSESSMENT YEARS ALTHOUGH RELIEF WASALLOWED TO THE APPELLANT AS PER GROUNDS OF APPEAL TAKENBY THE APPELLANT FOR THE ASSESSMENT YEAR 2015-16. 4. FOR THAT THE APPELLANT RESERVES THE RIGHTS TO ADD FURTHERGROUNDS OF APPEAL ON OR BEFORE HEARING OF THE APPEAL. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPER AND THE ASSESSEE HAS CONTINUOUSLY BEEN FOLLOWING THE PROJECT COMPLETION METHOD WHICH IS A RECOGNIZED METHOD AS PER ACCOUNTING STANDARDS. 4. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED, IN THIS CASE, THAT THE ORIGINAL ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER VIDE ORDER DATED 20.11.2017 MAKING THE CERTAIN ADDITIONS. THE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), GUWAHATI [THE CIT(A)] AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICER. THE LD. CIT(A) DELETED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. HOWEVER, AFTER THE ADDITIONS WERE DELETED/SET ASIDE, THE LD. CIT(A), THEREAFTER, PROCEEDED TO ISSUE CERTAIN DIRECTIONS TO ASSESSING OFFICER TO CONSIDER THE CASE OF THE ASSESSEE AS PER THE PERCENTAGE COMPLETION METHOD. 5. THE LD. AR HAS SUBMITTED THAT AFTER DECIDING THE MATTER ON MERITS IN FAVOUR OF THE ASSESSEE, THE LD. CIT(A) HAD NO JURISDICTION TOFURTHER DIRECT THE ASSESSING OFFICER TO ENQUIRE AND EXAMINE THE CASE OF THE ASSESSEE FROM DIFFERENT ANGLE;THAT THE ASSESSEE HAS BEEN FOLLOWING PROJECT COMPLETION METHOD, AND THAT SINCE NO DEFECT HAS BEEN POINTED OUT IN THE SAME BY ANY OF THE LOWER AUTHORITIES. HE, THEREFORE, HAS SUBMITTED THAT AFTER DECIDING THE CASE OF THE ASSESSEE ON MERITS, THE LD. CIT(A) WAS NOT SUPPOSED TO GIVE THE FURTHER DIRECTIONS TO THE ASSESSING OFFICER TO SCRUTINIZE THE CASE OF THE ASSESSEE APPLYING PERCENTAGE COMPLETION METHOD. 6. THE LD. DR THOUGH HAS RELIED UPON THE ORDER OF THE LOWER AUTHORITIES, HOWEVER, COULD NOT REBUT THE CONTENTIONS OF THE LD. AR THAT LD. CIT(A) HAD NO JURISDICTION TO ORDER THE ASSESSING OFFICER TO RE-SCRUTINIZE THE CASE OF THE ASSESSEE FROM DIFFERENT ANGLE BY APPLYING PERCENTAGE COMPLETION METHOD WHEN THE ASSESSEE HAS ALREADY 3 I.T.A. NO.417/GAU/2019 M/S. NEHARS AND ASSOCIATES PVT. LTD ASSESSMENT YEAR: 2015-16 BEEN FOLLOWING PROJECT COMPLETION METHOD WHICH IS ONE OF THE RECOGNIZED METHODS OF ACCOUNTING. 7. IN VIEW OF THE ABOVE, I DO NOT FIND JUSTIFICATION ON THE PART OF THE CIT(A) IN GIVING THE IMPUGNED DIRECTIONS TO THE ASSESSING OFFICER. THE REVENUE HAS NOT PREFERRED ANY APPEAL AGAINST THE ACTION OF THE CIT(A) IN DELETING THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. IN VIEW OF THIS, THE ORDER OF THE CIT(A) IS SUSTAINED TO THE EXTENT THAT HE HAS DELETED THE ADDITIONS ON MERITS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. HOWEVER, THE REMAINING DIRECTIONS ISSUED BY THE CIT(A) TO THE ASSESSING OFFICER BEING WITHOUT JURISDICTION ARE SET ASIDE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. KOLKATA, THE 30 TH APRIL, 2021. SD/- [ SANJAY GARG ] JUDICIAL MEMBER DATED :30.04.2021 RS COPY OF THE ORDER FORWARDED TO: 1.M/S. NEHARS AND ASSOCIATES PVT. LTD 2.ITO, WARD-3(5), GUWAHATI 3. CIT(A)- 4. CIT- , 5. CIT(DR), //TRUE COPY// BY ORDER SR. PS,H.O/D.D.O, I.T.A.T, KOLKATA BENCHES,KOLKATA .