SANSKRITI DEVELOPERS P. LTD, MUMBAI V. ITO WD 7(2)(2), MUMBAI

ITA 5572/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9142 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 29-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 37(1); 147

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 5572 / MUM/ 20 1 1 ( ASSESSMENT YEAR : 200 6 - 20 0 7 ) M/S SANSKRITI DEVELOPERS PVT. LTD., 6 TH FLOOR, AKRUTI TRADE CENTRE, MIDC - MAROL, ANDHERI (E), MUMBAI - 400 093 VS. ITO WARD 7 ( 2 )( 2 ) , MUMBAI PAN/GIR NO. : A A BCS 4085 R ( APPELLANT ) .. ( RES PONDENT ) /ASSESSEE BY : MR. VIJAY MEHTA /REVENUE BY : MR. RAKESH RANJAN DATE OF HEARING : 1 2 TH DEC . , 2012 DATE OF PRONOUNCEMENT : 14 TH DEC. , 2012 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 20 - 4 - 2011 OF LEANED CIT(A) - 13 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 6 - 0 7 . 2 . THE ASSESSEE IS OBJECTING IN REGARD TO THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF PRO FESSIONAL FEES OF RS. 8,40 ,850/ - CLAIMED UNDER SECTION 37(1) AND CONFIRMING THE RE - OPENING OF THE ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. 3 . THE AO WHILE COMPLETED REASSESSMENT, DISALLOWED AS THE SUM OF RS. 8,40,850/ - AND REDUCED FROM THE VALU E OF WIP OF M.P.MALL , ITA NO. 5572 /20 1 1 2 COMPOUND. THE ASSESSEE CLAIMED TO HAVE PAID THE SAME TO SHRI SURENDRA SANAS. SINCE THE URGENT NATURE OF SERVICE RENDERED BY SHRI SURENDRA SANAS AS WELL AS COPY OF BILLS RAISED BY HIM TO PROVE THE GENUINENESS OF THE TRANSACTION WERE N OT FILED, THEREFORE, THE AO DISALLOWED THE SAME AND REDUCED FROM THE WIP. 4 . LEARNED CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. REOPENING OF THE ASSESSMENT WAS ALSO CONFIRMED BY THE CIT(A) . NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE T RIBUNAL. 5 . AFTER CONSIDERING THE RIVAL SUBMISSION S, I FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL IN RESPECT OF EXPENSES OF RS. 8,40,850/ - . I NOTED TH AT SIMILAR EXPENSES WERE INCURRED IMMEDIATELY THE PRECEDING YEAR AND THEY HAVE BEEN ALLOWED WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143 (3) . I FURTHER NOTED THAT IN SUBSEQUENT YEAR ALSO SIMILAR EXPENSES HAVE BEEN ALLOWED. IT HAS BEEN CLEARLY NOTED BY THE AUTHORITIES THAT MR. SURENDRA SANAS, WHO GOT 10/15 YEARS EXPERIENCES IN CONSTRUCTION LI NE AND ACCORDINGLY, AFTER PROPER NEGOTIATION AT VARIOUS LEVELS AND MEETINGS HELD WITH MR. SANAS AND SERIES OF DISCUSSIONS ON THE PROJECT, AND MAKING ASSIGNMENTS IN RELATION TO ITS PLANNING, EXECUTION AND THE ENTIRE PROJECT MONITORING INCLUDING ADMINISTRATI VE ACTIVITIES OF THE SAID PROJECT AND, THEREFORE, THE AMOUNT OF RS. 8,40,850/ - PER ANNUM WAS PAID TO HIM FROM ASSESSMENT YEAR 2004 - 05 ONWARDS. THERE IS NO DISPUTE THAT THE PROJECT IS GOING ON AND THE RESULTS ARE CAPITALIZED AND SHOWN AS WIP . THEREFORE, IN M Y ITA NO. 5572 /20 1 1 3 CONSIDERED VIEW, THERE WAS NO POINT TO DOUBT THE SERVICES RENDERED BY MR. SURENDRA SANAS, WHO IS CONTINUOUSLY LOOKING AFTER THE PROJECT. SINCE THE ENTIRE PROJECT IS LOOKED AFTER BY HIM, THEN WHERE THE QUESTION REMAINS AS TO WHETHER THE SERVICES RENDERED BY HIM OR NOT. HUGE EXPENSES WAS INCURRED AND SHOWN AS WIP, WHICH HAS BEEN ACCEPTED BY THE AO ITSELF. THEREFORE, IN MY CONSIDERED VIEW, DISALLOWANCE MADE, WHICH IS CONFIRMED BY THE CIT(A) WAS NOT JUSTIFIED. ACCORDINGLY, I DELETE THE DISALLOWANCE OF RS. 8,40 ,850/ - BY ALLOWING THE CLAIM OF THE ASSESSEE. SINCE I HAVE DELETED THE ADDITION ON MERIT, THEREFORE, I AM NOT INCLINED TO DISPOSE OF THE LEGAL ISSUES AT THIS STAGE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF DEC. 2012. 2012 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 14 / 1 2 / 2012 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / T HE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI ITA NO. 5572 /20 1 1 4 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI