Nyas Infrabuild P.Ltd, New Delhi V. ITO, Ward-13(3), New Delhi

ITA 4717/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3492 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 21-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: UPVAN GUPTA ADV SH U C DUBEY
• Keywords: Application of stay
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SH.G.D.AGRAWAL, HONBLE PRESIDENT AND SH.K.N.CHARY, JUDICIAL MEMBER SA NO.622/DEL/2017 & ITA NO.-4717/DEL/2017 (ASSESSMENT YEAR: 2 011-12) ORDER PER K.N.CHARY, JUDICIAL MEMBER AGGRIEVED BY THE ORDER DATED 15.02.2016 IN APPEAL NO.108/14-15 OF THE COMMISSIONER OF INCOME TAX (APPEAL) [IN SHORT CIT (A)]-6, DELHI FOR 2011-12 ASSESSMENT YEAR, THE ASSESSEE FILED THIS APPEAL CHA LLENGING THE ADDITION OF RS.4,11,00,000/- ON ACCOUNT OF EXPENDITURE INCURRED ON LAND DEVELOPMENT AND WORKING PROGRESS. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A COMPANY INCORPORATED ON 15.09.2010 UNDER THE PROVISION OF COMPANIES ACT, 19 56 AND IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF HOUSING PROJECTS. FOR A Y 2011-12, THE ASSESSEE FILED RETURN OF INCOME ON 28.09.2011 DECLARING A LOSS OF RS.1,20,627/. DURING THE SCRUTINY, THE AO FOUND THAT WORK-IN-PROGRESS OF PRO JECT WAS DECLARED AT RS.4,11,00,000/- ALONG WITH THE CLOSING STOCK OF RS .91,85,000/- AND WHEN CALLED NYAS INFRABUILD PVT.LTD., RL-26, 1 ST FLOOR, GANGA RAM VATIKA, TILAK NAGAR, NEW DELHI-110018. PAN-AADCN3977D VS ITO, WARD-13(3), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY SH. UPVAN GUPTA, ADV. RESPONDENT BY SH.U.C.DUBEY, SR.DR DATE OF HEARING 0 6 . 11 .2017 DATE OF PRONOUNCEMENT 0 7 . 11 .2017 SA NO.622/DEL/2017 & ITA NO.-4717/DEL/2017 PG. 2 UPON TO FURNISH THE DETAILS, THE ASSESSEE EXPLAINED THAT THE COMPANY PURCHASED LAND IN RISHIKESH AND THE ENTIRE WORK IS A PART OF THE DEVELOPMENT OF A PROJECT, AND FOR THIS PURPOSE THEY SPENT RS.4,11,00,000/- ON ACC OUNT OF PAYMENT TO TWO CONTRACTORS NAMELY M/S AMR CONSTRUCTION LIMITED, HY DERABAD AND ALLIED GLOBAL INFRASTRUCTURE LIMITED, KOLKATA. ACCORDING TO AO I N SPITE OF REPEATED DEMANDS INCLUDING THE SERVICE OF QUERY NOTE DATED 21.02.201 4, THE ASSESSEE FAILED TO FURNISH THE COPIES OF CONTRACTS AND OTHER DETAILS. AO RECO RDED THAT THE VENDORS DID NOT CONFIRM THE TRANSACTIONS WITH THE ASSESSEE, IN RESP ONSE TO THE NOTICE ISSUED U/S 133(6) OF THE ACT AND THE ASSESSEE ALSO DID NOT FUR NISH ANY EVIDENCE TO SUBSTANTIATE THE NATURE OF WORK CARRIED OUT BY THE VENDORS, AS SUCH TREATING THE EXPENDITURE AS BOGUS AO ADDED THE SAME TO THE INCOM E OF THE ASSESSEE. THE APPEAL PREFERRED TO THE LD.CIT(A) WAS ALSO DISMISSE D ON THE SAME GROUNDS. HENCE, THIS APPEAL FILED BY THE ASSESSEE BEFORE US. 3. ALONGWITH THE APPEAL, THE ASSESSEE PREFERRED THE STAY PETITION SEEKING STAY OF DEMAND OF RS.1,85,12,750/- PENDING DISPOSAL OF THE APPEAL. 4. HEARD THE LD. COUNSEL ON EITHER SIDE AND PERUSED THE MATERIAL PAPERS ON RECORD. THE CONTENTION OF THE LD.AR IS THAT THE AS SESSEE DID NOT CLAIM DEDUCTION OF RS.4,11,00,000/- BUT THEY HAVE SHOWN IT AS WORK IN PROGRESS. LD.AR SUBMITTED THAT WHEN NO DEDUCTION IS CLAIMED IN RESPECT OF THI S PARTICULAR EXPENDITURE, DISALLOWING THE SAME AND TO MAKE ANY ADDITION ON TH AT BASIS DOES NOT ARISE. HE SUBMITTED THAT AT BEST THE AO CAN REDUCE THE WORKIN G PROGRESS TO THE EXTENT OF EXPENDITURE THAT IS NOT PROVED. HOWEVER, LD. COUNS EL SUBMITTED THAT THEY HAVE NO OBJECTION FOR REDUCING THE WORK-IN-PROGRESS. IN SU PPORT OF THIS CONTENTION, HE BROUGHT TO OUR ATTENTION THE P&L A/C AND THE NOTES FORMING PART OF THE BALANCE SA NO.622/DEL/2017 & ITA NO.-4717/DEL/2017 PG. 3 SHEET INCORPORATED AT PAGE NOS. 8 1TO 10 OF THE PAP ER BOOK TO DEMONSTRATE THAT THIS EXPENDITURE IS NOT DEBITED. HOWEVER, IT COULD BE SENT THAT AT PAGE NO.9 VIDE SCHEDULE-IV UNDER THE HEAD OTHER CURRENT ASSETS W ORK-IN-PROGRESS (IN SHORT WIP-PROJECT) AN AMOUNT OF RS.4,11,00,000/- IS SHO WN. 5. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES, WE ARE SATISFIED THAT INSTEAD OF MAKING ANY DISALLOWANCE OF ANY EXPENDITURE WHICH IS NOT CLAIMED AS DEDUCTION, BUT SHOWN AS WORK IN PROGRESS, THE AO SHOULD HAVE R EDUCED THE WORK IN PROGRESS. IN THESE CIRCUMSTANCES, IN VIEW OF THE SUBMISSION O F LD. AR, WE DIRECT THE AO TO REDUCE THE WORK IN PROGRESS TO COMPUTE THE INCOME O F THE ASSESSEE. SINCE WE DISPOSE OF THE APPEAL ITSELF, THE STAY PETITION BEC OMES INFRUCTUOUS AND IS LIABLE TO DISMISS. 6. IN THE RESULT, STAY PETITION IS DISMISSED AS INF RUCTUOUS AND THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07 TH NOVEMBER, 2017. SD/- SD/- (G.D.AGRAWAL) (K.N.CHARY) PRESIDENT JUDICIAL MEMBER *AMIT KUMAR* DATE:- 07.11.2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI