ACIT, New Delhi V. M/s Greater Ashoka Land & Development Co. Pvt. Ltd., New Delhi

ITA 5349/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91059 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 28-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 29-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VAYANTHAN
• Section: 131

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C: NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO. 5349/DEL/2010 ASSESSMENT YEAR: 2005-06 ACIT, VS. GREATER ASHOKA LAND & DEVELOPMENT CO. P. LTD., CIRCLE 12(1), FLAT NO. 104, CHIRANJIV TOWER, 43, NEHRU PLACE, NEW DELHI. NEW DELHI. AAACG0896K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. T. VAYANTHAN, SR. DR RESPONDENT BY : SH. SALIL AGGARWAL, ADV. & SH. SHA ILESH GUPTA, CA DATE OF HEARING: 28.04.2015 DAT E OF PRONOUNCEMENT: 20.05.2015 ORDER PER SHRI C.M. GARG, J.M. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-X, NEW DEL HI DATED 13/09/2010 IN APPEAL NO. 222/2009-10 FOR A.Y. 2005- 06. 2. EFFECTIVELY THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF THE CIT(A) IS WRONG, PERVERSE, ILLEGAL AND AGAINST THE PROVISIONS OF LAW WHICH IS LIABLE TO BE SET ASIDE; 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1, 07,87,357/- OUT OF TOTAL ADDITION OF RS. 1,67,64,815/- MADE BY THE AO WITHOUT GOING INTO THE FACTS OF THE CASE THOUGH NO SUCH 2 SUBMISSION RELIED UPON THE LD. CIT(A) WERE MADE BEF ORE THE AO DURING THE ASSESSMENT PROCEEDINGS WHICH IS ALSO IN CONTRADICTION OF RULE 46A(3)(1). 3. APROPOS THE SAID GROUNDS WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL P LACED ON RECORD, INTER- ALIA, ASSESSMENT ORDER, IMPUGNED ORDER, PAPER BOOK OF THE ASSESSEE SPREAD OVER 197 PAGES AND WRITTEN SYNOPSIS FILED BY LD. DR AND ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN I TA NO. 121/DEL/2014 DATED 01/04/2014 IN THE CASE OF CIT VS. GIRNAR INFR ASTRUCTURE PVT. LTD . AS RELIED BY THE LD. COUNSEL OF THE ASSESSEE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE DRAWN OUR AT TENTION TOWARDS PARA 3 AT PAGE 1 AND PARA 2 AT PAGE 2 OF THE ASSESS MENT ORDER AND SUBMITTED THAT THE ASSESSEE WAS ASKED TO SUBMIT PAR AWISE DETAILS OF SUCH CUSTOMERS ADVANCES AMOUNTING TO RS. 4,12,69,48 0/- AND IN RESPONSE TO THAT THE ASSESSEE SUBMITTED THE LIST OF PERSONS FROM WHOM IT CLAIMED THAT IT HAD RECEIVED SAID ADVANCES. THE LD . DR FURTHER DRAWN OUR ATTENTION TOWARDS PAGE NO. 17 AT PARA 9 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE CIT(A) ACCEPTED THE SUBMISSION O F THE ASSESSEE THAT THE AMOUNT OF RS. 1,67,64,815/- HAD BEEN WRONGLY AS SESSED AS INCOME FOR A.Y. 2005-06 AND FROM THE FACTS SUBMITTED BY TH E ASSESSEE IT EMERGES THAT THE AO HAD RIGHTLY ASSESSED THE AMOUNT OF INCOME FOR A.Y. 3 2005-06. THE LD. DR VEHEMENTLY CONTENDED THAT THE AO WAS JUSTIFIED IN RELYING UPON THE STATEMENT OF SHRI SUNIL SHARMA, DI RECTOR OF THE ASSESSEE COMPANY IN HOLDING THAT LIABILITY AMOUNTIN G TO RS. 1,67,64,815/- AS ON 31.03.2007 HAD CEASED TO EXIST AND THE ASSESSEE HAD VOLUNTARILY OFFERED THIS SUM AS INCOME IN THE Y EAR UNDER CONSIDERATION. THE LD. DR FURTHER POINTED OUT THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,07,87,357/- OUT O F TOTAL ADDITION OF RS. 1,67,64,815/- MADE BY THE AO WITHOUT ANY BASIS AND WITHOUT GOING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. D R FURTHER DRAWN OUR ATTENTION TOWARDS PARAGRAPH NO. 12 & 13 OF THE IMPU GNED ORDER AND SUBMITTED THAT NO SUCH SUBMISSION AS RELIED UPON TH E CIT(A) WERE MADE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS THA T THE CUSTOMER ADVANCES APPARENTLY REPRESENTED THE SALES MADE BY T HE ASSESSEE COMPANY. 5. THE LD. DR STRENUOUSLY CONTENDED THAT THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT AS PER ACCOUNTING PRINCIPLES THE TR UE AND CORRECT INCOME WHICH COULD BE TAXED IN THE HANDS OF THE ASSESSEE C OMPANY WOULD BE AFTER DEDUCTION OF RELEVANT EXPENSES AS SHOWN BY TH E ASSESSEE ONLY DURING FIRST APPELLATE PROCEEDINGS. THE LD. DR POI NTED OUT THAT THE CIT(A) WENT ON TO CONSIDER SUCH SUBMISSION AND EXPL ANATION OF THE ASSESSEE WHICH WERE NOT MADE BEFORE THE AO DURING A SSESSMENT 4 PROCEEDINGS AND THE CIT(A) CONSIDERED THE SAME WITH OUT CONFRONTING THE SUBMISSIONS AND EXPLANATIONS OF THE ASSESSEE TO THE AO, IN CONTRAVENTION WITH RULE 46A(3)(I) OF THE I.T. RULES , 1962. THE LD. DR FINALLY SUBMITTED THAT THE IMPUGNED ORDER MAY BE SE T ASIDE BY RESTORING THAT OF THE AO AND ALTERNATIVELY PRAYED THAT THIS L IMITED ISSUE MAY BE RESTORED TO THE FILE OF AO FOR PROPER VERIFICATION AND EXAMINATION OF THIS FACT THAT WHETHER THE TOTAL COST OF LAND AND DEVELO PMENT CHARGES AFTER DEDUCTING COST OF LAND OF SHOPPING BOOTHS AND COST OF LAND AS STOCK ON 31.03.2007 AND LAND DEVELOPMENT EXPENSES PERTAINING TO LAND AS STOCK WAS TO BE DEDUCTED FROM THE AMOUNT OF ADVANCES OF C USTOMERS AND THE SAME WAS NOT RECONCILED IN THE TRADING RESULTS OF T HE RELEVANT ASSESSMENT YEARS WHILE COMPUTING THE COST OF LAND S OLD AND DEVELOPMENT CHARGES THEREON. 6. THE LD. COUNSEL OF THE ASSESSEE DRAWN OUR ATTENT ION TOWARDS PAPER BOOK PAGE NO. 191 TO 196 AT PARA 10 AND SUBMI TTED THAT THE ASSESSEE WAS NOT PROVIDED DUE OPPORTUNITY OF HEARIN G BEFORE THE AO AND THE ASSESSEE SUBMITTED DETAILED SUBMISSIONS DUR ING FIRST APPELLATE PROCEEDINGS BEFORE CIT(A) VIDE LETTER DATED 05.01.2 010, WHEREIN THE ASSESSEE ELABORATES AND EXPLAINED THIS FACT THAT TH E TOTAL COST WHICH IS REQUIRED TO BE REDUCED FROM THE INCOME BEING ASSESS ED WOULD BE RS. 1,07,87,357/- AS COST OF LAND AND LAND DEVELOPMENT CHARGES WHICH 5 REFLECTED THE LIABILITY ON ACCOUNT OF CUSTOMER ADVA NCE ON 31.03.2007 IN THE BALANCE SHEET AND ALSO REFLECTED THE EXPENDITUR E UNDER THE HEAD CURRENT ASSETS. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE EXPENSES TOWARDS COST OF LAND AND LAND DEVELOPMENT CHARGES WAS TO BE ALLOWED AND TOTAL INCOME WAS TO BE COMPUTED AFTER A LLOWANCE OF SUCH EXPENSES. HOWEVER, THE LD. COUNSEL FAIRLY ACCEPTED THAT THESE SUBMISSIONS AND EXPLANATION WAS NOT RAISED BEFORE T HE AO AND THE CIT(A) DID NOT CALL ANY REMAND REPORT FROM THE AO A ND THE AO WAS NOT ALSO PROVIDED DUE OPPORTUNITY TO COMMENT UPON THESE EXPLANATION AND SUBMISSIONS OF THE ASSESSEE. 7. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS OF BOTH THE SIDES AT THE VERY OUTSET, WE NOTE THAT THE ASSESSEE RAISED T HE ISSUE OF ALLOWABILITY OF THE EXPENSES TOWARDS COST OF LAND A ND DEVELOPMENT CHARGES IN A.Y. 2005-06 DURING FIRST APPELLATE PROC EEDINGS. WE ALSO NOTE THAT THE CIT(A) DID NOT AFFORD ANOTHER OPPORTU NITY TO THE AO TO SUBMIT HIS REMAND REPORT AND TO COMMENT UPON THE ME RITS OF THE CLAIM, EXPLANATION AND SUBMISSION OF THE ASSESSEE WHICH WE RE NOT SUBMITTED DURING ASSESSMENT PROCEEDINGS. THE AO WAS NOT ALLO WED TO COMMENT UPON SAID CLAIM, EXPLANATION AND SUBMISSIONS OF THE ASSESSEE ON MERITS AND THE CIT(A) CONSIDERED AND ACCEPTED THE SAME IN CONTRAVENTION OF RULE 46A(3) OF THE I.T. RULES, 1962. 6 8. UNDER ABOVE NOTED FACTS AND CIRCUMSTANCES, WE AR E OF THE CONSIDERED OPINION THAT THIS ISSUE REQUIRES PROPER EXAMINATION AND VERIFICATION AT THE END AS TO WHETHER THE LAND AND DEVELOPMENT CHARGES WERE INCLUDED IN THE AMOUNT OF LIABILITIES OF RS. 1 ,67,64,815/- WHICH WAS ASSESSED AS INCOME OF THE ASSESSEE FOR THE YEAR UND ER CONSIDERATION ON THE BASIS OF STATEMENT OF SHRI SUNIL SHARMA THE DIR ECTOR OF THE COMPANY RECORDED U/S 131 OF THE ACT ON 26/12/2009. THE AO SHALL ALSO VERIFY AND EXAMINE THAT WHETHER THE AMOUNT OF RS. 1,07,87,357/ - WAS NOT RECONCILED WHILE COMPUTING THE TRADING RESULTS OF T HE ASSESSEE FOR A.Y. 2005-06. THEREFORE, THE ONLY ISSUE RAISED BY THE R EVENUE IN THIS APPEAL IS RESTORED TO THE FILE OF AO FOR DENOVO ADJUDICATION AFTER AFFORDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND WITHOUT BEING PREJUDICE FROM THE EARLIER ASSESSMENT AND IMPUGNED ORDER. ACCORDI NGLY, GROUND NO. 1 & 2 OF THE REVENUE DEEMED TO BE ALLOWED FOR STATIST ICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES IN THE MANNER AS INDICATED ABOVE. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 20.05.2015. SD/- SD/- (R.S. SYAL) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER 7 DATED: 20.05.2015 *KAVITA, P.S. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR 8 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 08.05.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 18.05.2 015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER