Addl. CIT, Meerut V. M/s. Meerut Development Authority, Meerut

ITA 5381/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6380 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 16-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 03-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts; Cost of acquisition
• Section: 143(3); 12AA; 11

Judgement Text

1 ITA NO. 53 81/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT ME MBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO.-5381/DE L/2013 (ASSESSMENT YEAR-2010- 11) ADDL. CIT RANGE-1, AAYAKAR BHAWAN BHAINSALI GROUND MEERUT VS MEERUT DEVELOPMENT AUTHORITY VIKAS BHAWAN CIVIL LINES MEERUT AAALM0124D DEPARTMENT BY NONE ASSESSEE BY SH. KAPIL GOEL, ADV. ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE LD. CIT(A)S-MEERUT ON 31/07/2013 FOR A.Y. 2010-11 ON THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(APPEALS), MEERUT, HAS ERRED IN LAW IN HOLDI NG THAT THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE ON THE VALID GROUNDS WHERE AS ON THE OTHER HAND LD. CIT(A) VIDE PARA 8.5 OF HIS ORDE R HAS HIMSELF HELD THAT THE CORRECT PROFIT/LOSS COULD NOT BE ASCERTAINED DUE TO ADHOC PRINCIPLES FOLLOWED BY THE ASSESSEE AND ACCOUNTS PREPARED IN A CASUAL MANNER. DATE OF HEARING 16 .02.2016 DATE OF PRONOUNCEMENT 09.03.2016 2 ITA NO. 53 81/DEL/2013 RELIANCE IN SUPPORT OF REJECTION OF BOOKS U/S 145(3 ) OF THE I.T. ACT, 1961 IS PLACED ON THE CASE LAWS AS UNDER: A) AWADHESH PRATAP SINGH ABDU REHMAN & BROS. VS. CIT, (1994) 210 ITR 406, 408 (ALL); B) RAINBOW METALS (INDIA), IN RE, (1995) 83 TAXMAN 160 , 166 (ITSC, BOM); C) DHONDIRAM DALICHAND VS. CIT, (1971) 81 ITR 609 (BOM); D) RAM CHANDA SINGH RAMNIK LAL VS. CIT (1961) 42 ITR 780. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(APPEALS), MEERUT, HAS ERRED IN HOLDING THAT SALES HAVE NOT CORRECTLY BEEN WORKED OUT BY THE ASS ESSING OFFICER IGNORING THE FACT THAT THE ASSESSING OFFICE R WORKED OUT THE SALES BY ADDING THE PURCHASES & DEVELOPMENT CHARGES TO THE OPENING STOCK AND REDUCED THE CLOSIN G STOCK FROM IT. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS), MEERUT, HAS ERRED IN HOLDING THAT THE N.P. RATE HAD NOT CORRECTLY BEEN WORKED OUT BY THE ASSES SING OFFICER IGNORING THE FACT THAT THE ASSESSING OFFICE R HAD ADOPTED MINIMUM SALE PRICE & MAXIMUM COST OF ACQUISITION & THEREBY REACHED TO A LOGICAL AND VERY REASONABLE FIGURE RATHER AT THE LOWEST POSSIBLE SID E. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, MODIFY AND/ OR DELETE ANY GROUND(S) OF APPEAL. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE OR DER OF THE CIT(APPEALS), MEERUT, MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. THE BRIEF FACTS ARE AS UNDER: 2.1 THE ASSESSEE WAS GRANTED REGISTRATION U/S 12AA OF THE ACT ON 21/05/2007 AND THE REGISTRATION WAS WITHDRAWN VIDE ORDER DATED 26/03/2009 BY THE THEN CIT-MEERUT. BEING AGGRIEVED BY THE ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THIS BENCH IN ITA NO. 2037/DEL/2013. 3 ITA NO. 53 81/DEL/2013 3. BE THAT AS IT MAY, THE ASSESSMENT PROCEEDINGS FO R THE YEAR UNDER CONSIDERATION WAS COMPLETED VIDE ORDER DATED 28/03/2013 BY THE ASSESSING OFFICER U/S 143(3) READ WITH SEC. 144(4) OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASSESSED AS ARTIFICIAL JUDICIAL PERSON AND ADDITIONS WERE TO AN EXTENT OF RS. 174,51,98,586/- AS COMPARED TO THE RETURNED LOSS OF RS. 56,47,16,296/- FILED BY THE ASSESSEE. 3.1 AGGRIEVED BY THE ORDER OF THE LD. ASSESSING OFF ICER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) ON GOING THROUGH THE SUBMISSIONS FILED BY THE ASSESSEE DELET ED CERTAIN ADDITIONS AND DIRECTED THE LD. ASSESSING OFFICER TO CONSIDER THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERA TION AT RS. 23,73,55,450/-. 3.2 AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 4. THE LD. AR AT THE OUTSET SUBMITS THAT, THIS TRIB UNAL VIDE ORDER DATED 27 TH AUGUST, 2013 IN ITA NO. 2037/DEL/2013 HAD HELD THA T THE REGISTRATION U/S 12AA OF THE ACT GRANTED TO THE ASSESSEE HAS BEEN WRONGLY WITHDRAWN BY THE CIT-MEERUT. THIS TRI BUNAL HAD RESTORED THE REGISTRATION U/S 12AA OF THE ACT WHICH WAS CANCELLED W.E.F. 01/04/2009. THE LD. AR, THEREFORE, SUBMITTE D THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THE ASSESSME NT RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJU DICATE IN THE LIGHT OF THE DECISION OF THIS TRIBUNAL IN ITA NO. 2037/DEL/2 013. 5. THE LD. DR HAS NO OBJECTION FOR THE ORDER BEING SET ASIDE TO THE FILES OF THE ASSESSING OFFICER. 4 ITA NO. 53 81/DEL/2013 6. WE, THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CASE, SET ASIDE THE ISSUE TO THE FILES OF THE ASSESSING OFFICER TO RECONSIDER THE ASSESSMENT IN THE LIGHT OF THE REGISTRATION BEING R ESTORED U/S 12AA OF THE ACT. NEEDLESS TO SAY THAT WHILE EXAMINING T HE CLAIM OF THE ASSESSEE FOR GRANT OF EXEMPTION U/S 11 AND OTHER RE LEVANT PROVISIONS OF THE ACT THE ASSESSING OFFICER SHALL H AVE ALL THE POWERS TO EXAMINE THE SAME AS PER SECTION 13 AND OTHER REL ATED PROVISIONS OF THE ACT. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS STATISTICALLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09.03. 2016 SD/- SD/- (J.S. REDDY) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09.03.2016 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 53 81/DEL/2013