Pavan Land & Estate Pvt.Ltd., Bharuch V. The Income tax Officer,Ward-2, Bharuch

ITA 474/AHD/2009

• Counselvise Citation: 47420514 RSA 2009
• Duration Of Justice: 2 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-10-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 13-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAY RAJ KUMARD R
• Keywords: Set aside
• Section: 142(1); 148; 144

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH DAHMEDABAD BEFORE S/SHRI D. K. TYAGI, J.M. AND A. K. GARODIA, A.M. PAVAN LAND & ESTATE (P) LTD., 35, B.G. TRADE CENTRE, PANCH BATTI, BHARUCH VS. ITO, WARD-2, BHARUCH. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SAKAR SHARMA, AR RESPONDENT BY:- SHRI JAYRAJ KUMAR,DR DATE OF HEARING : 4/10/2011 DATE OF PRONOUNCEMENT : 4/10/2011 O R D E R PER BENCH. ALL THESE THREE APPEALS ARE FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LD. CIT(A)-VI, BAROD A DATED 25.11.2008 FOR ASST. YEAR 1998-99, DATED 28.11.2008 FOR ASST. YEAR 2000-01 AND DATED 28.11.2008 FOR ASST. YEAR 2002-03. SINCE ALL THESE APPEALS PERTAIN TO THE SAME ASSESSEE, THESE WERE HEARD TOGETHER AND ARE BE ING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.474 TO 476/AHD/2009 ASST. YEARS 1998-99, 2000-01 & 2002-03 ITA NOS.474 TO 476/AHD/2009 ASST. YEARS 1998-99, 2001-01 & 2002-03 2 GROUND RAISED FOR ASST. YEAR 1998-99 IS AS UNDER :- (1) THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRM ING ADDITION OF RS.5,54,900/- ON ACCOUNT OF PROFIT ESTIMATED @ 1 0% ON WORK IN PROGRESS. GROUNDS FOR ASST. YEAR 2000-01 ARE AS UNDER :- (1) THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRM ING ADDITION OF RS.4,73,000/- ON ACCOUNT OF UNEXPLAINED UNSECURE D LOANS. (2) THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRM ING ADDITION OF RS.171,400/- ON ACCOUNT OF PROFIT ESTIMATED @ 10 % ON WORK IN PROGRESS. GROUNDS FOR ASST. YEAR 2002-03 ARE AS UNDER :- (1) THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRM ING ADDITION OF RS.35,000/- ON ACCOUNT OF DEPOSITS MADE IN BANK ACCOUNT. (2) THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN ENHANCI NG ASSESSMENT BY MAKING ADDITION OF RS.35,000/- BY EST IMATING COMMISSION INCOME @ 5% ON RS.7,00,000/- IGNORING TH E TERMS AND CONDITIONS OF DEVELOPMENT AGREEMENT. BEFORE ENH ANCING ASSESSMENT NO NOTICE OF ENHANCEMENT WAS GIVEN BY TH E LD. CIT(A). 2. AT THE VERY OUTSET IT WAS SUBMITTED BY THE LD. A R OF THE ASSESSEE THAT THE APPEAL FOR ASST. YEAR 1998-99 IS FILED BY THE ASSESSEE IN SECOND ROUND BECAUSE IN THE FIRST ROUND, THE MATTER WAS RE STORED BACK BY THE TRIBUNAL TO THE FILE OF AO FOR FRESH DECISION AS PE R ITS ORDER DATED 17/3/2006 IN ITA NO.1633/AHD/2001 FOR ASST. YEAR 1 998-99. 3. IT IS FURTHER SUBMITTED THAT IN REMAINING TWO YE ARS I.E. ASST. YEAR 2000-01 & 2002-03, THE MATTER HAS BEEN REOPENED BY THE AO BY ISSUING NOTICE U/S 148 ON 28.03.2007. HE FURTHER SUBMITTED THAT IN ALL THE THREE YEARS, THE QUERY WAS RAISED BY THE AO IN THE MONTH OF NOVEMBER, 2007 PRECISELY ON 5/11/2007 IN ASST. YEAR 1998-99, AND O N 15/11/2007 AND ITA NOS.474 TO 476/AHD/2009 ASST. YEARS 1998-99, 2001-01 & 2002-03 3 17/12/2007 IN THE REMAINING TWO YEARS. ASSESSMENTS WERE FRAMED BY THE AO ON 24.12.2007 IN ALL THE THREE YEARS UNDER SECTI ON 144 AND THE ASSESSEE WAS NOT PROVIDED SUFFICIENT TIME OF HEARIN G AND HENCE, THE MATTER SHOULD GO BACK TO THE FILE OF THE AO FOR FRESH DECI SION BECAUSE IT WAS THE DIRECTION OF THE TRIBUNAL IN ASST. YEAR 1998-99 THA T PROFIT ELEMENTS IN THE CONSTRUCTION CAN ONLY BE WITH REFERENCE TO THE CONT RACT AND HENCE THE ASSESSEE HAD TO FURNISH THE RELEVANT CONTRACTS BEFO RE THE AO AND THEN ONLY THIS ASPECT CAN BE DECIDED BY THE AO. 4. AS AGAINST THIS, THE LD. DR SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. IT WAS ALSO HIS SUBMISSION THAT THE BURDEN W AS ON THE ASSESSEE TO FURNISH RELEVANT EVIDENCE BEFORE THE AO AND SINCE I T WAS NOT DONE, THE ISSUE WAS DECIDED WITHOUT CONSIDERING THE CONTRACTS . 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT IN ASST. YEAR 1998-99, THE TRIBUNAL VIDE PARA 5.3 OF THE ORDER DATED 17.3.2006 HAS HELD AS UNDER :- 5.3 IN VIEW OF THE FOREGOING WE ONLY CONSIDER I T FIT, THE ASSESSEE HAVING NOT FURNISHED THE DETAILS OF ITS WIP FOR A PROPER A SSESSMENT OF ITS VALUE, TO RESTORE THIS MATTER BACK TO THE FILE OF AO FOR A VERIFICATION OF THE SAME WITH REFERENCE TO THE CONTRACT(S) ENTERED INTO BY T HE ASSESSEE IN RESPECT OF ITS CONSTRUCTION. IT WOULD BE NOT OUT OF ORDER TO A DD THAT THE PROFIT ELEMENT IN THE CONSTRUCTION CAN ONLY BE WITH REFERENCE TO T HE CONTRACT (RATE), THOUGH IRRESPECTIVE OF THE AMOUNT RECEIVED THERE AG AINST AND FURTHER, ONLY IF THE PROJECT CROSSES A CERTAIN THRESHOLD LEVEL, W HICH IT APPEARS TO HAVE I.E. AS PER THE ACCEPTED AND RECOGNIZED ACCOUNTING PRACTICES, AND WHICH WOULD ALSO ENTITLE IT FOR A PROVISION AGAINST FUTUR E UNCERTAINTIES (IN RELATION TO THE PROJECT UNDER EXECUTION) INCLUDING ESCALATION IN COST. WE DECIDE THIS APPEAL IN THESE TERMS. 6. WE FIND THAT ALTHOUGH THE MATTER WAS RESTOR ED BACK BY THE TRIBUNAL TO THE FILE OF AO AS PER ITS ORDER DATED 17.3.2006 AND THEREAFTER THERE WAS ITA NOS.474 TO 476/AHD/2009 ASST. YEARS 1998-99, 2001-01 & 2002-03 4 RE-ASSESSMENT NOTICES ISSUED FOR ASST. YEAR 2000-01 AND 2002-03 ON 28.3.2007. NOTICE UNDER SECTION 142(1) ALONG WITH Q UESTIONNAIRE WAS ISSUED BY THE AO ONLY ON 5.11.2007 FOR ASST. YEAR 1 998-99 AND 15.11.2007 FOR THE REMAINING TWO YEARS AND THE ASSE SSMENT ORDERS IN ALL THE THREE YEARS WERE PASSED ON 24.12.2007. UNDER TH ESE FACTS, WE FEEL THAT SUFFICIENT TIME WAS NOT PROVIDED TO THE ASSESSEE FO R FURNISHING THE DOCUMENTS AND EVIDENCE REQUIRED FOR THE PURPOSE OF CARRYING OUT THE DIRECTIONS OF THE TRIBUNAL IN ASST. YEAR 1998-99. W E, THEREFORE, FEEL UNDER THESE FACTS AND IN THE INTEREST OF JUSTICE, T HE MATTER SHOULD GO BACK TO THE FILE OF AO FOR A FRESH DECISION. WE THEREFOR E, SET ASIDE THE ORDERS OF LD. CIT(A) IN ALL THE THREE YEARS AND RESTORE THE M ATTER BACK TO THE FILE OF THE AO FOR A FRESH DECISION. THE AO SHOULD ALSO CAR RY OUT THE INSTRUCTION OF THE TRIBUNAL IN THE EARLIER ORDER DATED 17.3.200 6 IN ASST. YEAR 1998-99 AND FOR THIS PURPOSE, ADEQUATE AND REASONABLE TIME SHOULD BE ALLOWED TO THE ASSESSEE AND THE ASSESSEE SHOULD ALSO KEEP ALL DOCUMENTS AND EVIDENCES READY TO BE FURNISHED TO THE AO IMMEDIATE LY ON ASKING. THEREAFTER THE AO SHOULD PASS SPEAKING ORDERS AS PE R LAW IN ALL THE THREE YEARS. 7. IN THE RESULT, ALL THE THREE APPEALS OF AS SESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 4.10. 2011. SD/- SD/- (D. K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, MAHATA/- ITA NOS.474 TO 476/AHD/2009 ASST. YEARS 1998-99, 2001-01 & 2002-03 5 COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 4/10/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 7/10/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..