The DCIT, Circle-3, Surat V. M/s. Suyog Corporation, Surat

ITA 568/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94356 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business income
• Section: 69C; 80IB; 69

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.568/AHD/2012 /BLOCK ASSTT. YEAR: 2008-2009 DCIT, CIR.3 SURAT. VS M/S.SUYOG CORPORATION SHALIGRAM, F.P.NO.118 T.P.S.NO.31, ADAJAN, SURT 395 005. %& / (APPELLANT) '( %& / (RESPONDENT) REVENUE BY : SHRI D.C. MISHRA, SR.DR ASSESSEE BY : SHRI S.N. SOPARKAR / DATE OF HEARING : 20/08/2015 / DATE OF PRONOUNCEMENT: 26/08/2015 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE LD.CIT(A)-II, SURAT DATED 28.11.2011 PASSED FOR THE ASSTT.YEAR 2008-09. 2. THE GROUND NO.1 IS ONLY SUBSTANTIVE GROUND OF AP PEAL. IT PROJECTS, THE GRIEVANCE OF THE REVENUE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.1,00 ,00,000/- MADE UNDER SECTION 68, SECTION 69 AND SECTION 69C OF THE IT AT, WITHOUT APPRECIATING THE FACT THAT ASSESSEE FAILED TO OFFER AN EXPLANATION REGARDING THE SOURCE OF RS.1,00,00,000/- CREDITED I N ITS BOOKS OF ACCOUNT AS WIP, EVEN THOUGH DURING THE COURSE OF SU RVEY U/S.133A OF THE I.T.ACT ON 13.03.2008, THE PARTNERS OF THE ITA NO.568/AHD/2012 2 ASSESSEE FIRM ACCEPTED RS.1,00,00,000/- AS THE RECE IPT OF THE FIRM FROM UNDISCLOSED SOURCES. 3. THE LD.COUNSEL FOR THE ASSESSEE AT THE OUTSET SU BMITTED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF THE ITAT, AHMEDABAD BENCH IN THE CASE O F ACIT VS. SHREE PADMAVATI DEVELOPERS, RENDERED IN ITA NO.268/AHD/20 10. HE PLACED ON RECORD COPY OF THE TRIBUNALS ORDER. HE FURTHER CONTENDED THAT HONBLE BOMBAY HIGH COURT HAS ALSO CONSIDERED THIS ISSUE IN THE CASE OF CIT VS. SHETH DEVELOPERS P. LTD., 25 TAXMANN.COM 17 3 = 254 CTR 127 (BOM). HE PLACED ON RECORD COPY OF THIS DECISION A LSO. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MOMENT THE ADDITIONS HAVE BEEN MADE IN THE TAXABLE INCOME OF THE ASSESSEE, EV EN ON ACCOUNT OF DISCLOSURE MADE BY THE ASSESSEE DURING THE COURSE O F SURVEY PROCEEDINGS, THEN THAT AMOUNT WILL BE CONSIDERED AS A BUSINESS PROFIT OF THE ASSESSEE, AND IT WILL BE ENTITLED FOR DEDUCTION UNDER SECTION 80IB. 4. THE LEARNED DR, ON THE OTHER HAND, CONTENDED THA T THE ASSESSEE FAILED TO DISCLOSE SOURCE OF SUCH DISCLOSURE MADE D URING THE COURSE OF SURVEY AND ADDITION HAS BEEN MADE ON ACCOUNT OF UNE XPLAINED AMOUNT DISCLOSED BY THE ASSESSEE. THEREFORE, ON THIS AMOU NT, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80IB OF TH E INCOME TAX ACT. 5. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATIV ES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT EXACTLY THE SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN THE CASE OF SHREE PA DMAVATI DEVELOPERS (SUPRA). THE FINDING RECORDED BY THE TRIBUNAL READ S AS UNDER: 7. W E HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERUSED T HE IMPUGNED STATEMENT OF MR.MAHENDRA KATARIA RECORDED ON 27/28.12.2006. IN REPLY TO A QUESTION, IT WAS CATEG ORICALLY STATED, QUOTE (I)RS.50,000/- SALES PROCEEDS OF FLAT NOT R ECORDED IN BOOKS. UNQUOTE. CONSEQUENT THEREUPON, THE SAID AMO UNT OF RS.50 LACS WAS DULY DISCLOSED IN THE PROFIT & LOSS ACCOUNT DRAWN ON 31.3.2007. IN THE CASE OF THE CIT VS. SUMAN PAPE R AND BOARD ITA NO.568/AHD/2012 3 LTD. [2009]314 ITR 119 (GUJ.) AN OBSERVATION HAS BE EN MADE THAT MANUFACTURING AND SALE OF BOARD PAPER AND CRAFT PAP ER HAPPENED TO BE THE ONLY SOURCE OF INCOME OF THE ASSESSEE, TH EREFORE THE AMOUNT DISCLOSED CONSEQUENCE UPON THE SEARCH PARTAK ES THE CHARACTER OF BUSINESS INCOME AND ELIGIBLE FOR THE D EDUCTION U/S.80IB/80IA OF THE I.T.ACT. IN THE PRESENT CASE, THE ASSESSEE HAS ADMITTED THAT THE IMPUGNED AMOUNT WAS PART OF T HE SALE CONSIDERATION RECEIVED IN CASH AT THE TIME OF BOOKI NG OF FLATS AND, THEREFORE, THE AMOUNT HAD DIRECT AND PROXIMATE CONN ECTION WITH THE NORMAL BUSINESS OF CONSTRUCTION ACTIVITY, HENCE ELIGIBLE FOR THE DEDUCTION U/S.80IB(10) OF THE I.T.ACT. BECAUSE OF T HE FACTUAL AS ALSO LEGAL ASPECT OF THE CASE, WE HEREBY CONFIRM TH E FINDING OF LEARNED CIT(APPEALS) AND DISMISS THIS GROUND OF THE REVENUE. 6. SIMILARLY, THE QUESTION BEFORE THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF SHETH DEVELOPERS PVT. LTD. (SUPRA) WAS AS UNDER: (1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT DEDUCTIO NS U/S. 80IB (10) HAS TO BE ALLOWED FROM THE INCOME COMPUTED AS UNDISCLOSED INCOME U/S. 69A OF THE INCOME TAX ACT, 1961? (2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S. 80IB(10) WHERE NO SUCH CLAIM IS MADE BY THE ASSESSE E IN THE RETURN OF INCOME FOR THE BLOCK PERIOD? 7. THE HONBLE HIGH COURT HAS DECIDED BOTH THESE QU ESTIONS IN FAVOUR OF THE ASSESSEE. THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT IN PARA-11 READ AS UNDER: 11. THE FURTHER CASE OF THE APPELLANT-REVENUE THAT IN VIEW OF SECTION 69A OF THE SAID ACT THE BENEFIT OF DEDUCTIO N UNDER CHAPTER VIA OF THE SAID ACT WOULD NOT BE AVAILABLE TO THE R ESPONDENT- ASSESSEE IS NOT WELL FOUNDED. IN THE PRESENT FACTS IT IS NOT THE CASE OF THE REVENUE THAT THE MONEY FOUND IN POSSESS ION OF THE RESPONDENT ASSESSEE COULD NOT BE EXPLAINED AND/OR I TS SOURCE COULD NOT BE EXPLAINED TO THE SATISFACTION OF THE A SSESSING OFFICER. IN THE PRESENT CASE UNDISCLOSED INCOME FOUND IN THE FORM OF CASH WAS EXPLAINED AS HAVING BEEN ACQUIRED WHILE CARRYIN G ON BUSINESS AS A BUILDER AND THIS EXPLANATION WAS ACCEPTED BY T HE ASSESSING OFFICER BY HAVING ASSESSED THE UNDISCLOSED INCOME F OR THE BLOCK PERIOD AS INCOME FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION. THEREFORE, THE RELIANCE BY THE REVENUE UPON THE DEC ISION OF THE ITA NO.568/AHD/2012 4 GUJRAT HIGH COURT IN THE MATTER OF FAKIR MOHMED HAJ I HASAN (SUPRA) IS NOT CORRECT AS THE FACTS OF THAT C ASE ARE COMPLETELY DISTINGUISHABLE FROM THE PRESENT FACTS. IN THE PRESENT CASE, NO QUESTION OF APPLICATION OF SECTION 68,69 A ND 69A, 69B AND 69C OF THE SAID ACT ARISES AS THE SAME HAS NOT BEEN INVOKED BY THE DEPARTMENT. IT IS AN ADMITTED POSITION BETWE EN THE PARTIES AS REFLECTED EVEN IN THE ORDER THE ASSESSING OFFICE R THAT UNDISCLOSED INCOME WAS IN FACT RECEIVED BY THE RESP ONDENT IN THE COURSE OF CARRYING OUT ITS BUSINESS ACTIVITIES AS A BUILDER. THE SAME WAS RETURNED BY THE RESPONDENT AS INCOME ARISI NG FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION AND THE SAME WAS ACCEPTED BY THE DEPARTMENT UNLIKE IN THE MATTER OF FAKIR MOHMAD HAJI HASAN (SUPRA). 12. IN VIEW OF THE ABOVE THE ORDER DATED 12/10/2009 OF THE TRIBUNAL CANNOT BE FAULTED. THEREFORE, QUESTION (1) ABOVE IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE RESPON DENT-ASSESSEE AND AGAINST THE APPELLANT-REVENUE. QUESTION (2) IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE RESPONDENT-ASSESSE E AND AGAINST THE APPELLANT-REVENUE. 8. IN VIEW OF THE ABOVE CONCLUSION, WE ARE OF THE O PINION THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE BY THE ABOVE DECISION. THE LD.FIRST APPELLATE AUTHORITY H AS RIGHTLY CONSIDERED THE AMOUNT DISCLOSED BY THE ASSESSEE DURING THE COU RSE OF SURVEY AS ELIGIBLE FOR GRANT OF DEDUCTION UNDER SECTION 80IB( 10) OF THE INCOME TAX ACT. ACCORDINGLY, THIS GROUND OF APPEAL OF THE REV ENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 26 TH AUGUST, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 26/08/2015