JCIT.,-17(3), MUMBAI V. SUN DEVELOPERS, MUMBAI

ITA 4709/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1659 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 31-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 10-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR SINGH
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Opportunity of being heard; Retraction; Revised return
• Section: 131; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO. 5017/M/2011 ASSESSMENT YEAR:2007-2008 M/S. SUN DEVELOPERS, 361 A JERBAI WADIA ROAD, PAREL, BHOIWADA, MUMBAI 400 012. PAN:ABAFS 6419 C VS. JT. COMMISSIONER OF INCOME TAX, RANGE-17(3), PIRAMAL CHAMBERS, MUMBAI 400 013. (APPELLANT) (RESPONDENT) I.T.A. NO. 4709/M/2011 ASSESSMENT YEAR:2007-2008 JT. COMMISSIONER OF INCOME TAX, RANGE-17(3), PIRAMAL CHAMBERS, MUMBAI 400 013. VS. M/S. SUN DEVELOPERS, 361 A JERBAI WADIA ROAD, PAREL, BHOIWADA, MUMBAI 400 012. PAN:ABAFS 6419 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJIV M. SHAH REVENUE BY : SHRI PRADEEP KUMAR SINGH, DR DATE OF HEARING: 31.12.12 DATE OF O RDER: 4.1.2013 O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION AND THEY ARE CROSS APPEALS. ITA NO. 5017/M/2011 IS FILED BY THE ASSESSEE AND ITA NO. 47 09/M/2011 IS FILED BY THE REVENUE AND BOTH APPEALS PERTAINING TO THE SAME ASS ESSMENT YEAR 2007-2008 ARE AGAINST THE ORDER OF SAME CIT (A)-29, MUMBAI DATED 14.3.2011. THE APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE FOLLOW ING PARAGRAPHS. FIRSTLY, WE SHALL TAKE UP THE ASSESSEES APPEAL. I.T.A. NO. 5017/M/2011 (BY ASSESSEE) 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GRO UNDS WHICH READ AS UNDER: 1. THE LD CIT (A) ERRED IN LAW AND FACTS IN UPHOLD ING DISALLOWANCE OF EXPENSES OF RS. 97,32,858/- CLAIMED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS BEING EXPENSES RELATED TO PROJECT TAKEN AS COMPLETED AND ASSESSED TO TAX, ON THE GROUND THAT THE ASSESSEE HA S NOT CLAIMED THE SAME 2 BY FILING REVISED RETURN OF INCOME. THE REASONS GI VEN BY HIM FOR DOING SO ARE WRONG, CONTRARY TO THE FACTS OF THE CASE AND AGAINS T THE PROVISIONS OF LAW. 2. THE LD CIT (A) OUGHT TO HAVE ALLOWED THE EXPENSE S INCURRED OR TO BE INCURRED TILL THE PROJECT IS COMPLETED AS PER REASO NABLE ESTIMATES OR EVIDENCES AND ASSESSED THE INCOME AT NIL. 3. THE LD CIT (A) ERRED IN LAW AND FACTS IN CONFIRM ING THE ASSESSMENT ON PROJECT COMPLETION METHOD WHEN THE PROJECT WAS NOT COMPLETED AND DISALLOW THE EXPENSES INCURRED OR TO BE INCURRED ON PROJECT. 4. THE LD CIT (A) ERRED IN LAW AND FACTS IN NOT ALL OWING RETRACTION OF STATEMENT RECORDED U/S 131 WHEREIN THE ASSESSEE WAS FORCED TO ACCEPT THE PROJECT COMPLETION BASIS EVEN WHEN PROJECT WAS NOT YET COMPLETED ON THE GROUND THAT RETRACTION IS NOT ACCEPTABLE. THE REAS ONS GIVEN BY HIM FOR DOING SO ARE WRONG, CONTRARY TO THE FACTS OF THE CASE AND AGAINST THE PROVISIONS OF LAW. 3. GROUND NOS. 1 & 2 RELATE TO THE APPLICABILITY OF THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF GOETZ INDIA LIMITED VS. CIT [2006] 2 84 ITR 323. RELATING TO THE FACTS OF THESE GROUNDS WHERE ASSESSEE RAISED THE ISSUE REGAR DING THE DISALLOWANCE OF RS. 97,32,858/- WITHOUT FILING THE REVISED RETURN OF I NCOME. IN THIS REGARD LD COUNSEL MENTIONED THAT CONSIDERING THE ABOVE CITED JUDGMENT THE ASSESSING OFFICER IS REQUIRED TO ENTERTAIN THE GROUNDS RAISED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE GIST OF THE ABOVE CITED JUDGMENT OF THE HONBLE APEX COU RT READS AS UNDER: IN CASE WHERE A DEDUCTION IS CLAIMED AFTER FILING O F RETURN OF INCOME, THE ASSESSING AUTHORITY HAS NO POWER TO ENTERTAIN SUCH CLAIM OTHERWISE THAN BY WAY OF A REVISED RETURN. 4. CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSU E, THE CIT (A) IS ALSO AN APPELLATE AUTHORITY. THE BAR IF ANY, FOR CLAIMING OF RAISING OF FRESH ISSUES, ONLY THROUGH THE FILING OF THE REVISED RETURN THROUGH THE ASSESSING OFFICER. WE ADMIT THE SAME AND THEREFORE, AO IS DIRECTED TO ADJUDICATE THE ISSUE AFRESH AFTER GRANT ING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 1 & 2 ARE ADMITTED BY US AND SET ASIDE TO THE FILES OF AO. 5. REGARDING GROUND NO. 3 & 4, WHERE THE ISSUE IS A BOUT RETRACTION OF STATEMENT RECORDED U/S 131, BOTH THE PARTIES MENTIONED THAT T HIS ISSUE MUST ALSO GO TO THE FILES OF THE AO FOR ADJUDICATING THE ISSUE AFRESH. 6. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. DURING THE COURSE OF PROCEEDINGS, BOTH THE PARTIES AGREED TO R EMIT THE MATTER BACK TO THE FILES OF THE AO FOR FRESH ADJUDICATION OF THE ISSUE. WE HAVE CO NSIDERED THE REQUEST OF BOTH THE PARTIES AND REMIT THE MATTER BACK TO THE FILES OF THE AO FO R ADJUDICATING THE ISSUE AFRESH AFTER 3 GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE CIT (A) IS DIRECTED TO PROVIDE SPEAKING ORDER ON THE REASONS GIVEN BY T HE ASSESSEE IN PARA 3.5 OF THE APPELLATE ORDER REGARDING THE FACTS RELATING TO WHETHER THE P ROJECT IN QUESTION IS COMPLETED OR NOT? ACCORDINGLY, GROUND NO. 3 & 4 RAISED BY THE ASSESSE E ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 4709/M/2011 (BY REVENUE) 8. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROU NDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION OF AN AMOUNT OF RS. 42,10,070/- BEING EXPENSES CLAIMED IN THE NATURE OF CONTINGENT / UNAS CERTAINED LIABILITIES NOT ALLOWABLE U/S 37 OF THE IT ACT. 2. THE LD CIT (A) FAILED TO APPRECIATE THE FACTS OF THE CASE PROPERTY AND THE ORDER BASED ON SUCH IMPROPER APPRECIATION OF TH E FACTS AND PREVAILING JUDICIAL DECISIONS IS ERRONEOUS AND MAY BE QUASHED. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A ) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFIC ER BE RESTORED. 9. THE ONLY ISSUE THAT IS RAISED IN THIS APPEAL REL ATES TO THE ADDITION OF RS. 42,10,070/- DISALLOWED U/S 37 OF THE ACT. DURING T HE PROCEEDINGS BEFORE US, BOTH THE PARTIES MENTIONED THAT THIS ISSUE BEING ONE LIN KED TO THE PROJECT IN QUESTION, PRAYED FOR SETTING ASIDE THIS ISSUE ALSO TO THE FIL ES OF THE AO FOR FRESH ADJUDICATION. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT TH IS ISSUE IS SET ASIDE AND AO IS DIRECTED TO ADJUDICATE THE ISSUE AFRESH AFTER AFFOR DING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS R AISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF JANUARY, 2013. SD/- SD/- (D.K. AGARWAL) (D. KARUNAKARA R AO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 4.1.2013 AT :MUMBAI 4 OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR , BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI.