Akruti Jay Developers, Pune V. Income tax Officer, Pune

ITA 554/PUN/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8124 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R G NAHAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM . / ITA NO.554/PUN/2017 / ASSESSMENT YEAR : 2012-13 AKRUTI JAY DEVELOPERS, S.NO.45, AKRUTI COUNTRY WOODS, OFF. KATREJ KONDHWA ROAD, TILEKAR NAGAR, KONDHWA, PUNE-411048. PAN : AAFFJ0932R ....... / APPELLANT / V/S. ITO, WARD-14(3), PUNE. / RESPONDENT ASSESSEE BY : SHRI R. G. NAHAR REVENUE BY : SHRI ABDHESH KUMAR JHA / DATE OF HEARING : 21.01.2020 / DATE OF PRONOUNCEMENT : 22.01.2020 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)-7, PUNE DATED 01.12.2016 FOR THE ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- BEING AGGRIEVED BY THE APPEAL ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 7, PUNE (HEREINAFTER REFERRED TO AS THE CIT(A)-7) WITH REGARDS THE APPEAL ORDER U/S 143(3) OF THE ACT OF THE LEARNED INCOME TAX OFFICER, WARD 14(3), PUNE (HEREINAFTER REFERRED TO AS THE LAO), THIS APPEAL PETITION IS SUBMITTED ON THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A)-7 HAS ERRED IN CONFIRMING AD-HOC ADDITION / DISALLOWANCE OF 5% OF EXPENSES OF RS.6,86,35,343/-, AMOUNTING TO RS. 34,31,767/-. 2. THE ORDER UNDER APPEAL IS NOT ONLY BAD IN LAW AND INVALID, BUT ALSO AGAINST THE NATURAL LAW OF EQUITY AND JUSTICE. 2 ITA NO.554/PUN/2017 3. THAT THE APPELLANT RESERVES ITS RIGHTS TO AMEND, ALTER OR RAISE ANY OTHER ADDITIONAL GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF APPELLATE PROCEEDINGS. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS AND UNDERTOOK THE CONSTRUCTION WORK OF RESIDENTIAL PROJECT AT KONDHWA AREA AND OTHER PLACES. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING LOSS OF RS.3,62,52,846/-. THE ASSESSEE REFLECTED THE REVENUE OF RS.11.24 CRORES (ROUNDED UP) AND DEBITED THE EXPENSES OF RS.15.71 CRORES (ROUNDED UP) FOR THE YEAR UNDER CONSIDERATION. AT THE END OF THE ASSESSMENT, THE ASSESSING OFFICER MADE VARIOUS ADDITIONS AND REDUCED THE LOSS OF RS.4.52 CRORES (ROUNDED UP) TO POSITIVE INCOME OF RS.1,16,20,652/-. 4. BEFORE US, AT THE OUTSET, MENTIONING TO THE DETAILS OF VARIOUS ADDITIONS, THE LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE SINGLE ADDITION OF RS.34,31,767/- (PARA 7 OF THE ASSESSMENT ORDER). THE RELEVANT FACTS RELATING TO THIS ADDITION INCLUDE THAT THE ASSESSING OFFICER, NOTED THAT THE ASSESSEE CLAIMED OTHER EXPENSES AMOUNTING TO RS.6,86,35,343/- (SCHEDULE 19 OF THE FINANCIAL STATEMENT). ON FINDING THAT THE ASSESSEE FAILED TO FURNISH THE EVIDENCES IN SUPPORT OF THE SAID CLAIM OF THE OTHER EXPENSES, THE ASSESSING OFFICER PROCEEDED TO DISALLOW 5% OF THE SAME ON AN AD-HOC BASIS. THE SAME IS ADDED TO THE RETURNED INCOME OF THE ASSESSEE. THE SAID ADDITION WAS DULY APPROVED BY THE CIT(A) AFTER CONSIDERING THE WRITTEN SUBMISSION FILED BY THE ASSESSEE BEFORE THE CIT(A). 5. ON HEARING BOTH THE SIDES, WE FIND THAT THE ASSESSEE IS A LOCK MAKING COMPANY AND SUBMISSION OF DETAILS IS NOT UPTO THE MARK. AS SEEN FROM THE CONTENTS OF PARA 5 TO 5.8 OF THE ORDER OF THE CIT(A), WE FIND THE ADJUDICATION BY THE CIT(A) IS FAIR AND REASONABLE. IT IS AN ADMITTED POSITION THAT THE BASIC DETAILS ARE FILED BY THE ASSESSEE AND HOWEVER, THE EVIDENCES ARE NOT FURNISHED 3 ITA NO.554/PUN/2017 IN SUPPORT OF THE SAME. IN FACT, THE BENCH RAISED CERTAIN QUESTIONS ABOUT THE DETAILS OF THIS OTHER EXPENSES AND THE ASSESSEE COULD NOT FURNISH THE SAME INSTANTLY. THEREFORE, WE FIND THIS IS A CASE WHERE THE ASSESSEE FAILED TO DISCHARGE THE ONUS. FURTHER, WE FIND THAT THE ORDERS OF THE ASSESSING OFFICER/CIT(A) ARE DEFICIENT ON WHY AD-HOC 5%. THEREFORE, WE ARE OF THE OPINION THAT, IN PLACE OF 5% OF THE OTHER EXPENSES, THE AD-HOC ADDITION OF RS.5,00,000/- SHOULD MEET THE BOTH ENDS OF JUSTICE. ACCORDINGLY, WE MODIFY THE ORDERS OF THE ASSESSING OFFICER/CIT(A) ON THIS ADDITION. ACCORDINGLY, THE ASSESSING OFFICER IS ORDERED. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 22 ND DAY OF JANUARY, 2020. SD/- SD/- (S. S. VISWANETHRA RAVI) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 22 ND JANUARY, 2020. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-7, PUNE. 4. THE PR. CIT-6, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.