THE ITO, Vijayawada V. M/s Sri Sujatha Dwellings, Vijayawada

ITA 52/VIZ/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9017 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 28-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SATYANDHAM
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 52 / VIZ /201 5 (ASST. YEAR : 20 08 - 09 ) ITO, WARD - 2(2), VIJAYAWADA. VS. M/S. SRI SUJATHA DWELLINGS, C/O CH. SATISH BABU, D.NO. 32 - 9 - 12, B.V. RATNAM ST., MOGH A LRAJAPURAM, VIJAYAWADA . PAN NO. ABIFS 2351 P (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : SHRI T. SATYANDHAM SR. DR DATE OF HEARING : 1 0 / 0 4 /201 7 . DATE OF PRONOUNCEMENT : 12 / 04 /201 7 . O R D E R THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), VIJAYAWADA , DATED 12 / 11 /201 4 FOR THE ASSESSMENT YEAR 2008 - 09 . 2. FACTS ARE IN BRIEF THAT THE ASSESSEE - FIRM CARRYING ON THE BUSINESS OF CONSTRUCTION OF COMMERCIAL COMPLEX E S , FILED ITS RETURN OF INCOME BY DECLARING TOTAL LOSS OF 10,32,188/ - . THE RETURN FILED BY THE ASSESSEE WAS INITIALLY PROCESSED UNDER SECTION 143(1) OF THE ACT, THEREAFTER CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. THEREAFTER, CAS E OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 AND NOTICE UNDER SECTION 148 WAS SERVED AND AFTER DUE PROCESS, ASSESSMENT WAS COMPLETED UNDER 2 ITA NO. 52 / VIZ /201 5 (M/S. SRI SUJATHA DWELLINGS) SECTION 143(3) READ WITH SEC. 147 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , ASSESSING OFFICER ASK ED THE ASSESSEE - FIRM TO PRODUCE THE DETAILS OF THE WORK IN PROGRES S (WIP) SHOWN IN THE PROFIT & LOSS ACCOUNT . THE MANAGING PARTNER OR HIS AR COULD NOT FILE ANY WIP. IN ABSENCE OF INFORMATION, ASSESSMENT WAS COMPLETED , BASED ON THE INFORMATION AVAILABLE ON RECORD. THE ASSESSING OFFICER FURTHER OBSERVED FROM THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE - FIRM AS ON 31/03/2008 THAT THE ASSESSEE - FIRM HAS SHOWN SALE OF APARTMENTS AT 40,50,000/ - AND WIP AT 35,31,779/ - . THE A SSESSEE - FIRM CLAIMED CONSTRUCTION EXPENDITURE TO THE EXTENT OF 75,81,779/ - APART FROM THE OTHER EXPENDITURES DEBITED TO PROFIT & LOSS ACCOUNT . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , IT WAS OBSERVED FROM THE COPIES OF THE SALE DEEDS FOR THE SALE OF FIVE FLOORS IN CNR COMPLEX, THE ASSESSEE - FIRM HAS RECEIVED THE CONSIDERATION AS UNDER: - SL.NO. DATE OF SALE NAME OF THE PURCHASER ADVANCES RECEIVED, IF ANY SALE CONSIDERATION 1 25/02/2012 GADDAM SUCHARITHA -- 8406000 2 29/03/2012 1. ARE SIVA REDDY 2. ARE SRINIVASA REDDY 3. CH. SATEESH BABU (MG. PARTNER IN SRI SUJATHA DWELLINGS) 4. V. PRAVEEN BABU -- 2041750 2041750 2041750 2041750 3 01/12/2011 CH. RAGHURAM VARIOUS INSTALLMENTS I) BY CASH II) BY CHEQUE 4167000 4000000 4 01/12/2011 CH.V.V.S. PRASAD I) BY CHEQUE 6 - 9 - 2011 27 - 10 - 2011 02 - 11 - 2011 30 - 11 - 2011 30 - 11 - 2011 30 - 11 - 2011 900000 1600000 400000 900000 900000 900000 900000 3 ITA NO. 52 / VIZ /201 5 (M/S. SRI SUJATHA DWELLINGS) 30 - 11 - 2011 30 - 11 - 2011 30 - 11 - 2011 30 - 11 - 2011 II) CASH BY INSTALLMENTS 500000 700000 200000 267000 5 29/03/2011 CH. LAVANYA I) BY CHEQUE 14 - 3 - 2012 8167000 TOTAL RS. 41075000 FROM THE ABOVE DETAILS, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS NOT RECEIVED ANY SALE CONSIDERATION OF 40,50,000/ - AS ON 31/03/2008 STATED TO BE RECEIVED FROM SRI SATISH BABU OF 10,50,000/ - , SRI A. SIVA REDDY 10,00,000/ - AND SRI C. VENKATA RATNAM 20,00,000/ - . ALL THESE AMOUNTS ARE NOTHING , BUT ADVANCES RECEIVED FROM THE ABOVE PERSONS. ALL THESE AMOUNTS ARE RETURNED BY THE ASSESSEE - FIRM TO THE ABOVE PERSONS IN THE SUBSEQUENT ASSESSMENT YEARS. THEREFORE, IT IS NOT KNOW WHY THE ASSESSEE FIRM HAS SHOWN THE ADVANCES RECEIVED FROM THE ABOVE PERSONS TO THE EXTENT OF 40,50,000/ - AS SALE CONSIDERATION RECEIVE D DURING THE FINANCIAL YEAR 2007 - 08 . SINCE, CONSTRUCTION OF FIVE FLOORS ARE COMPLETED IN THE FINANCIAL YEAR 2011 - 12 AND SALE CONSIDERATION WAS RECEIVED IN THE SAME YEAR , UNTIL THEN , THE EXPENDITURE INCURRED TOWARDS CONSTRUCTION BY THE ASSESSEE - FIRM HAS TO BE SHOWN AS WIP. FOR THE YEAR UNDER CONSIDERATION , THE ASSESSEE - FIRM HAS CLEVERLY SHOWN THE ADVANCES RECEIVED TO THE EXTENT OF 40,50,000/ - IN PROFIT & LOSS ACCOUNT AS SALE CONSIDERATION TO REDUCE THE WIP TO THE EXTENT OF ADVANCES RECEIVED AS MENTIONED ABOVE. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE 4 ITA NO. 52 / VIZ /201 5 (M/S. SRI SUJATHA DWELLINGS) THE DETAILS OF THE ADVANCES RECEIVED , BUT ASSESSEE HAS NOT FILED ANY DETAILS. ACCORDINGLY, THE ASSESSING OFFICER HAS CALCULATED IN THE ASSESSMENT ORDER AT PAGE NO.4 BY CONSIDERING ALL THE DETAIL S AND HELD THAT THE ASSESSEE - FIRM IS IN RECEIPT OF PROFIT TO THE EXTENT OF 27,92,818/ - AND A CCORDINGLY ASSESSMENT IS COMPLETED. 3. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO ADOPT THE VALUE OF 45,09,767/ - AS CLOSING WIP AND RECOMPUTED THE INCOME /LOSS . I FIND THAT COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT GIVEN ANY REASONS AND ALSO NOT EXAMINED THE DETAILS OF THE ADVANCES RECEIVED AND SUBSEQUENTLY RETURNED TO THE PARTIES. THE COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT EXAMINING THE RELEVANT DETAILS AND EXPLANATION GIVEN BY THE ASSESSEE, SIMPLY DIRECTED THE ASSESSING OFFICER TO FOLLOW HIS OBSERVATIONS , WHICH IS I N MY OPINION, IS NOT CORRECT. EVEN BEFORE ME , NONE APPEARED ON BEHALF OF THE ASSESSEE AND NO DETAILS WERE FILED. IN VIEW OF THE ABOVE, I REVERSE THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND UPH O LD THE ORDER OF THE ASSESSING OFFICER. 4 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 1 2 T H DAY OF APRIL , 201 7 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 1 2 T H APRIL , 201 7 . VR/ - 5 ITA NO. 52 / VIZ /201 5 (M/S. SRI SUJATHA DWELLINGS) COPY TO: 1 . THE ASSESSEE - M/S. SRI SUJATHA DWELLINGS, C/O CH. SATISH BABU, D.NO. 32 - 9 - 12, B.V. RATNAM ST., MOGHALRAJAPURAM, VIJAYAWADA. 2 . THE REVENUE ITO, WARD - 2(2), VIJAYAWADA. 3 . THE CIT - VI, HYDERABAD. 4 . THE CIT(A) , VIJAYAWADA . 5 . THE D.R . , VISAKHAPATNAM. 6 . GUARD FILE. BY ORDER