SAROVAR HOMES P.LTD, MUMBAI V. ACIT 4(3), MUMBAI

ITA 4431/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3879 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 28-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 29-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K SAHUDR

Judgement Text

INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUMBAI , . . , BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND C. N. PRASAD,JUDICIAL MEMBER ./ITA/4431/MUM/2012, /ASSESSMENT YEARS: 2006-07 M/S. SAROVAR HOMES PVT. LTD. SAIRA MANSION, CHURCH ROAD, OPP. EVEREST BUILDING, MAROL, ANDHERI-(E) MUMBAI-400 059. PAN:AABCS 3740 B VS. ACIT-4(3) AAYAKAR BHAVAN MUMBAI. ( /APPELLANT ) ( / RESPONDENT) REVENUE BY: SHRI R.K. SAHU-DR ASSESSEE BY: SHRI BHUPENDRA SHAH /DATE OF HEARING: 26.07.2016 / DATE OF PRONOUNCEMENT:05.08.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM-. CHALLENGING THE ORDER,DATED 10/08/2011,OF THE CIT ( A)-8,MUMBAI, THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE-COMPANY,ENGAGED I N THE BUSINESS OF CONSTRUCTION, DEVELOPMENT,BUILDERS AND BUILDING CONTRACTORS, FILE D ITS RETURN OF INCOME ON 23/ 11/ 2006,DECLARING TOTAL INCOME OF RS.35.09 LAKHS.THE A SSESSING OFFICER(AO) COMPLET -ED THE ASSESSMENT U/S.143 (3) OF THE ACT, ON 05/12 / 2008, DETERMINING THE INCOME OF THE ASSESSEE AT RS. 70.30 LAKHS. 2. THERE IS A DELAY OF 28 DAYS IN FILING THE APPEAL. IN HIS AFFIDAVIT, THE DIRECTOR OF THE COMPANY HAS STATED THAT DUE TO ILLNESS OF THE A CCOUNTANT THE TAX CONSULTANT COULD NOT BE CONTACTED TO FILE THE SECOND APPEAL,TH AT THE DELAY IN FILING THE APPEAL WAS BEYOND THE CONTROL OF THE ASSESSEE.DURING THE C OURSE OF HEARING BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)REITERATED THE SAME AR GUMENTS THAT ARE PART OF THE AFFIDAVIT AND THE APPLICATION FILED BY THE ASSESSEE FOR CONDONING THE 4431/M/12-SAROVAR HOMES P.LTD. 2 DELAY.CONSIDERING THE CIRCUMSTANCES AND FACTS OF TH E CASE AND THE PERIOD OF DELAY,WE ARE OF THE OPINION THAT DELAY SHOULD BE CO NDONED. 3. EFFECTIVE GROUND OF APPEAL DEALS WITH ADDITION OF R S.33.82 LAKHS.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND FROM THE CERTIF ICATES OF TDS CLAIM THAT THE ASSESSEE WAS IN RECEIPT OF LABOUR CHARGES OF RS.9.3 5 CRORES, THAT IT HAS OFFERED AN AMOUNT OF RS. 9.29 CRORES ONLY.HE RAISED A QUERY AS TO WHY THE DIFFERENCE OF RS.6.73 LAKHS SHOULD NOT BE TAXED IN ITS HANDS. VID E ITS LETTER DATED 20/11/2008,THE ASSESSEE FILED A RECONCILIATION STATEMENT IN THAT R EGARD. AFTER GOING THROUGH THE STATEMENT,THE AO FOUND THE THERE WAS DIFFERENCE OF RS. 33, 82,003/-BETWEEN THE CONTRACT RECEIPTS AS PER THE RECONCILIATION STATEME NT AND AS PER THE LEDGER ACCOUNT FURNISHED.HE DIRECTED IT TO RECONCILE THE DIFFERENC E.IN ITS REPLY, THE ASSESSEE FILED THE RECONCILIATION STATEMENTS WITH REGARD TO NIRMAL LIFESTYLE LTD. (NLL)AND HIRANANDANI AKUTI JV(HAJ) AND CLAIMED THAT THERE WA S NO DIFFERENCE IN THE INCOME SHOWN IN THE BOOKS OF ACCOUNTS AND THE TEXT DEDUCTED AT SOURCE CERTIFICATES.HOWEVER, THE AO HELD THAT THE EXPLANAT ION SUBMITTED BY THE ASSESSEE WAS NOT ACCEPTABLE, THAT HE HAD MADE CERTAIN ENQUIR IES BY ISSUING NOTICES U/S. 133 (6)OF THE ACT WITH BOTH THE PARTIES I.E.NLL AND HAJ , THAT IN THE SECOND RECONCILIA - TION STATEMENT THE ASSESSEE HAD SHOWN VAT PAYABLE A T RS. 21.75 LAKHS, THAT SAME WAS NOT APPEARING ANYWHERE IN THE DETAILS SUBMITTED NOR WAS IT APPEARING IN THE PROFIT AND LOSS ACCOUNT, THAT THE ENTRY OF VALUE-AD DED TAX PAYABLE WAS NOT EXPLAINED PROPERLY AND SATISFACTORILY, THAT THERE WAS DIFFERE NCE IN THE LABOUR CHARGES RECEIVED FROM NLL, THAT IN THE SECOND STATEMENT THE ASSESSEE HAD SHOWN RECEIPT OF RS.5,00,54, 848/-AS AGAINST THE RECEIPT OF RS. 4.78 CRORES IN THE FIRST THE STATEMENT, THAT IN THE CASE OF HAJ THERE WAS DIFFERENCE OF RS. 8.72 LAKHS, THAT THE ASSESSEE HAD SUBMITTED THE RECONCILIATIONS WITHOUT ANY SUPPORTIN G DOCUMENTS.FINALLY,HE HELD 4431/M/12-SAROVAR HOMES P.LTD. 3 THAT THERE WAS VARIATION IN LABOUR CHARGES OF RS. 3 3.82 LAKHS.HE ADDED THE SAID SUM TO THE TOTAL INCOME THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM,IT WAS A RGUED THAT THE ASSESSEE HAD COMPLETED ONE OF THE ONGOING PROJECT BEFORE MARCH, 2005 AND HAD SUBMITTED THE BILL,THAT THE BILL WAS ACCOUNTED BY IT IN ITS BOOKS OF ACCOUNTS, THAT THE OTHER PARTY PASSED THE BILL FOR PAYMENT IN JANUARY, 2006 AND AC CORDINGLY TDS CERTIFICATES WAS ISSUED IN THE SUBSEQUENT YEAR, THAT THE AO HAD ACCE PTED THE ABOVE EXPLANATION , THAT WHILE DEALING WITH THE LEDGER ACCOUNTS OF NLL AND HAJ THE AO HAD CONSIDERED CERTAIN ITEMS THAT SHOULD NOT HAVE BEEN TAXED AS INCOME, THAT THE ASSESSMENT WAS GETTING TIME-BARRED, THAT HE PASSED THE ORDER WITHOUT CONSIDERING THE RELEVANT MATERIAL. AFTER CONSIDERING THE ASSESS MENT ORDER AND THE SUBMISSION OF THE ASSESSEE,THE FAA HELD THAT THE RECONCILIATION S TATEMENTS FILED BY IT WERE NOT CREDIBLE,THAT THE PAYMENT OF VAT WAS NOT MADE IN TH E YEAR UNDER CONSIDERATION, THAT THERE WAS DIFFERENCE IN THE ACCOUNTS OF THE PA RTIES FROM THE ASSESSEE HAD RECEIVED THE PAYMENT AND IN THE BOOKS OF ACCOUNTS O F THE ASSESSEE,THAT IT HAD NOT FILED A JUSTIFIABLE EXPLANATION IN THAT REGARD.FINA LLY, HE UPHELD THE ORDER OF THE AO. 5. BEFORE US,THE AR SUBMITTED THAT THE ASSESSEE HAD FI LED THE RECONCILIATION STATEMENTS AND COPIES OF THE LEDGER ACCOUNTS APPEAR ING IN THE BOOKS OF NLL AND HAJ,THAT BOTH THE AUTHORITIES AND NOT CONSIDERED TH E DEBIT NOTES AND THE REASONS OF DIFFERENCE IN THE RECEIPTS,THAT TDS AND VAT WERE NO T TO BE CONSIDERED FOR DETERMINING THE INCOME OF THE ASSESSEE. HE REFERRED TO THE PAGES 85 TO 94, 104, 107,108,111 OF THE PAPER BOOK.THE DEPARTMENTAL REPR ESENTATIVE(DR) SUPPORTED THE ORDER OF THE AO AND THE FAA. 4431/M/12-SAROVAR HOMES P.LTD. 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO HAD OBSERVED THAT THE ASSESSEE WAS IN RECEIPT OF LABOUR CHARGES OF RS.9.35 CRORES FOR THE YEAR UNDER CONSIDERATION AND HAD OFFERED RS.9.29 CRORES ONLY FOR TAXATION, THAT THE ASSESSEE FILED RECONCILIATION IN THAT REGARD,THAT HE DIRECTED THE ASSESSEE TO FILE F URTHER RECONCILIATION OF THE RECEIPTS IN THE CASES OF NLL AND HAJ(RS.4.78 CRORES AND RS. 2.47 CRORES, RESPECTIVELY), THAT THE AO CONCLUDED THAT THERE WAS DIFFERENCE IN THE R ECEIPT TO THE EXTENT OF RS. 33.82 LAKHS,THAT THE ASSESSEE HAD ARGUED BEFORE THE FAA T HAT THE AO HAD WRONGLY CONSIDERED THE LABOUR-CHARGES-TDS CERTIFICATES,THAT SERVICE TAX,VAT WERE CONSIDERED AS INCOME WHILE CALCULATING LABOUR-CHARG ES RECEIPTS, THAT THE ASSESSEE HAD FILED DETAILED RECONCILIATIONS BEFORE THE FAA W ITH REGARD TO NLL AND HAJ, THAT IT HAD FILED DEBITED NOTES CONTAINING THE DETA ILS OF SERVICE TAX AND TDS,THAT IT HAD ALSO EXPLAIN AS TO HOW THE RETENTION MONEY WAS AFFECTING THE BILL AMOUNTS,THAT WHILE DECIDING THE APPEAL THE FAA DID NOT CONSIDER THE DEBIT NOTES AND THE LEDGER ACCOUNTS IN PROPER PERSPECTIVE,THAT IT HAD ALSO EXP LAINED AS TO WHY THERE WAS DIFFERENCE BETWEEN THE LEDGERS OF BOTH THE PARTIES AND THE LEDGERS MAINTAINED BY IT, THAT THE FAA IGNORED THE SUBMISSIONS MADE BY IT. IN OUR OPINION,THE RECONCILIA - TIONS SUBMITTED BY THE ASSESSEE ALONG WITH THE DEBI T NOTES THE LEDGER ACCOUNTS OF NLL AND HAJ AND THE FINAL BILLS(PAGE 109 OF THE PB. )HAVE TO BE CONSIDERED FOR ARRIVING AT FINAL CONCLUSION.THUS,THERE IS A NEED O F FURTHER VERIFICATION OF THE MATTER UNDER CONSIDERATION.SO,IN THE INTEREST OF JUSTICE, WE ARE RESTORING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION.HE IS DIR ECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND TO CONSI DER THE MATERIAL SUBMITTED BY THE IT BEFORE US.EFFECTIVE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE, IN PART. APPEAL BY THE ASSESSEE STANDS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH AUGUST,2016. 4431/M/12-SAROVAR HOMES P.LTD. 5 5 , 2016 SD/- SD/- ( . . / C.N. PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :05.08.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.