The ITO, 4(1), Indore V. M/s. Chandra Prabhu Homes Pvt. Ltd., Indore

ITA 478/IND/2010

• Counselvise Citation: 47822714 RSA 2010
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: S S DESH
• Section: 133(6); 68; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.478/IND/2010 AY:2005-06 INCOME TAX OFFICER 4(1), INDORE ..APPELLANT V/S. M/S CHANDA PRABHU HOMES PVT. LTD. INDORE PAN AACCC-488P .....RESPONDENT APPELLANT BY : SHRI ARUN DEWAN, SR. DR RESPONDENT BY : SHRI S.S. DESHPANDE, FCA ORDER PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 29.3.2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWING GROUNDS :- 2 I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT(A)-II, INDORE, IS CONTRARY TO THE FACTS AND LAW. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-II, INDORE, ERRED IN DELETING THE ADDITION OF RS.7,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LAND DEVELOPMENT EXPENSES. III. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A)-II, INDORE, ERRED IN DELETING RS. 21,68,555/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALE OF PLOTS. IV. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A)-II, INDORE, ERRED IN DELETING THE ADDITION OF RS.27,96,419/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED ADVANCES CLAIMED TO RECEIVED AGAINST PLOTS 3 2. GROUND NO. (I) IS GENERAL IN NATURE AND NEEDS NO DELIBERATION. 3. SO FAR AS GROUND NO. (II) IS CONCERNED, WE FIND THAT THERE IS A TYPOGRAPHICAL ERROR IN THE GROUND AS THE ADDITION OF RS. 7,35,327/- HAS BEEN SUSTAINED BY LE ARNED COMMISSIONER OF INCOME TAX (APPEALS) OUT OF THE TOT AL ADDITION OF RS. 21,35,327/- ON ACCOUNT OF CLAIM OF LAND DEVELOPMENT EXPENSES WHEREAS THE REVENUE HAS TAKEN THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 7 L ACS MADE ON ACCOUNT OF LAND DEVELOPMENT EXPENSES. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT LD. FIRS T APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.14 LACS OUT OF THE TOTAL ADDITION OF RS.21,35,327/- TH AT TOO WITHOUT ASSIGNING ANY REASON. ON THE OTHER HAND, TH E LD. COUNSEL FOR ASSESSEE DEFENDED THE IMPUGNED ORDER. 4. BRIEF FACTS ARE THAT THE ASSESSEE IS A PRIVATE L IMITED COMPANY ENGAGED IN THE BUSINESS OF PURCHASE, 4 DEVELOPMENT AND SALE OF PLOTS AND BUILDING, DECLARE D NIL INCOME AFTER CLAIMING THE SET OFF OF BROUGHT FORWAR D LOSSES WHICH WAS REOPENED U/S 148 OF THE ACT THAT T HE LAND DEVELOPMENT EXPENSES HAVE BEEN SHOWN AT RS.82, 86 LACS AND THE ADVANCE AGAINST PURCHASE OF PLOTS FOR WHICH NO DETAILS HAVE BEEN FILED. THE ASSESSEE CLAIMED A SUM OF RS.21,35,327/- AS LAND DEVELOPMENT EXPENSES WHEREAS IN THE COPY OF LEDGER ACCOUNT THE AMOUNT OF RS.19,89,322/- SHOWED THE EXPENSES ON SUCH COUNT. IN REPLY TO THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED REPLY ON 30.12.2008 . WE FIND THAT THE ASSESSING OFFICER CALLED FOR INFORMAT ION U/S 133(6) OF THE ACT FROM THE POLICE AND OBSERVED THAT THE POLICE SEIZED CASH BOOK, RASID KATTA, LEDGER, FORM NO. 32 AND MEMORANDUM OF ARTICLES OF ASSOCIATION ONLY. TH E CONCLUSION DRAWN IN THE IMPUGNED ORDER (PARA 4.2.4) IS REPRODUCED HEREUNDER :- 4.2.4 ON OVERALL CONSIDERATION OF FACTS AND MATERIAL ON RECORD IT HAS TO BE NECESSARILY CONCLUDED THAT APPELLANT HAS INCURRED EXPENSES 5 ON DEVELOPMENT WORK DURING THE YEAR UNDER CONSIDERATION AS EVIDENCED BY BOOKS OF ACCOUNT MAINTAINED AND REPORT PREPARED BY LAND REVENUE AUTHORITIES. BUT THE ENTIRE CLAIM OF RS. 21,35,327/- CANNOT BE ALLOWED AS IN THE ACCOUNTS PRODUCED THE AMOUNT WAS SHOWN AT RS.19,89,332/-. THE RECORDS ARE NOT COMPLETE AND NOT SUPPORTED BY BILLS AND VOUCHERS AND HENCE CANNOT BE RELIED FULLY. FURTHER IN RESPECT O F LABOUR EXPENSES, THERE CANNOT BE USUALLY THIRD PARTY VOUCHERS AND LABOUR EXPENSES CLAIMED ITSELF STAND AT RS. 11,18,810/-. THUS IN VIEW OF ABOVE DISCUSSION, A.O. IS DIRECTED TO ALLOW CLAIM OF DEVELOPMENT EXPENSES AT RS. 14 LACS IN PLACED OF RS. 21,35,327/- AND BALANCE DISALLOWANCE IS CONFIRMED. IF THE AFORESAID UNCONTROVERTED FINDING IS ANALYSED , LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS MENTIONED THAT THE ASSESSEE HAS INCURRED EXPENSES O N DEVELOPMENT WORK AS EVIDENCED BY BOOKS OF ACCOUNT MAINTAINED AND RECORD PREPARED BY LAND REVENUE AUTHORITIES. AFTER PERUSAL AND EXAMINATION OF RECO RD, THE ADDITION OF RS.14 LACS WAS DELETED. NO CONTRARY FAC TS WERE BROUGHT BY EITHER SIDE BEFORE US, THEREFORE, WE FIN D NO INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) AND AFFIRM THE SAME. 6 5. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.21,68,555/- MADE ON ACCOUNT OF SALE OF PLOT. TH E LEARNED SR. DR DEFENDED THE ASSESSMENT ORDER WHEREA S THE LD. COUNSEL FOR ASSESSEE SUPPORTED THE IMPUGNED ORDER. 5.1. ON PERUSAL OF RECORD AND AFTER HEARING THE RIV AL SUBMISSIONS, WE FIND THAT THE CLAIM OF THE ASSESSEE IS THAT THE SALE HAS ALREADY BEEN ACCOUNTED FOR AND OF FERED FOR TAXATION AND THE ADVANCES RECEIVED AGAINST BOOK ING OF PLOTS HAVE BEEN DULY REFLECTED IN THE BOOKS AND PRO PER RECEIPTS HAVE ALSO BEEN ISSUED TO THE RESPECTIVE PA RTIES. IT IS FURTHER SEEN THAT REMAND REPORT WAS CONSIDERED B Y LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND TH E LEARNED ASSESSING OFFICER DULY VERIFIED THE COMPLET E RECEIPTS FROM THE BOOKS OF ACCOUNT. EVEN 8 PERSONS WERE PRODUCED BEFORE HIM AND THEIR STATEMENTS WERE RECOR DED. IN THE REMAND REPORT, THE ASSESSING OFFICER HAS MENTIONED THAT BOOKING OF PLOTS HAVE BEEN DULY VERI FIED 7 BY THE INSPECTOR AND THE ADVANCES, SHOWN BY THE ASSESSEE, WERE ACTUALLY RECEIVED AGAINST BOOKING OF PLOTS. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 7. THE LAST GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.27,96,419/- MADE ON ACCOUNT OF UNEXPLAINED ADVANCES CLAIMED TO BE RECEIVED AGAINST PLOTS. AFT ER HEARING THE RIVAL SUBMISSIONS WE FIND THAT THE ASSE SSING OFFICER CALLED THE EXPLANATION FROM THE ASSESSEE IN RELATION TO SUCH RECEIPTS. THE ASSESSEE BEFORE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) FURNISHED A LI ST OF SEVEN PAGES CONTAINING NAMES AND ADDRESSES OF SUCH PERSONS (ALONGWITH TELEPHONE NUMBERS IN SOME CASES) FROM WHOM THE ADVANCES TOTALLING RS. 27,96,419/- WE RE RECEIVED. THIS LIST WAS FORWARDED TO THE ASSESSING OFFICER BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS). I N THE REMAND REPORT, SUCH RECEIPTS WERE VERIFIED BY HIM A ND FOUND TO BE CORRECT. IN VIEW OF THESE FACTS, WE AR E 8 SATISFIED THAT THE ASSESSEE DISCHARGED ITS BURDEN A ND NO ADDITION CAN BE MADE U/S 68 OF THE ACT, CONSEQUENTL Y, THE IMPUGNED ADDITION WAS RIGHTLY DELETED BY LEARNE D COMMISSIONER OF INCOME TAX (APPEALS). THE SAME IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2011. (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.6.2011 COPY TO:APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD FI LE D/-