UNIQUE BUILDERS & DEVELOPERS(REALTY), Jaipur V. DCIT, Jaipur

ITA 576/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5426 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI CIT DHK
• Keywords: Loose papers
• Section: 143(3); 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 576/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10. M/S UNIQUE BUILDERS & DEVELOPERS (REALTY), C-116, JANPATH, LAL KOTHI SCHEME, JAIPUR. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABFU 7549 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/02/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/02/2016 VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 26/05/2014 OF THE LEARNED CIT(A), CENTRAL, JAIPUR FO R A.Y. 2009-10. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS GROSSLY ERRED CONFIRMING THAT, THE PROFIT COMPUTED ON THE BASIS OF THE PAPER I.E. ANNEXURE A- 2, PAGE-51, SEIZED DURING SEARCH FROM SH. NAVEEN BHUTA NI RELATED TO ASSESSEE, WITHOUT CONSIDERING THE FACT TH AT THE 2 ITA NO. 576/JP/2014 UNIQUE BUILDERS (REALTY) VS DCIT SAID PAPER WAS NEITHER SEIZED FROM THE POSSESSION OF ASSESSEE NOR THE SAME WAS CONFRONTED TO THE ASSESSEE , THEREFORE, THE RESULTANT ADDITION MADE DESERVES TO BE DELETED. 1.1 THAT, THE LD. CIT(A) HAS FURTHER FAILED TO CONSI DER THAT THE SAID PAPER IS COMPLETELY UNRELIABLE AS NO CROSS - EXAMINATION WAS ALLOWED OF THE PERSON FROM WHOSE CUSTODY THIS PAPER WAS SEIZED AND THUS THE CONTENTS OF THE PAPER REMAINED UNPROVED. THEREFORE, NO ADDITION CAN BE MADE ON THE BASIS OF THIS PAPER IN ANY YEAR WHATSOEVER. 1.2 THAT, THE LD.C1T(A) HAS FURTHER FAILED TO APPRECI ATE THAT THE AFORESAID PAPER DID NOT REPRESENT ANY ACTU AL TRANSACTION AND MERELY CONTAINED THE ESTIMATIONS AN D ROUGH CALCULATIONS AND WHICH DO NOT RECONCILE AT ANY POSSIBILITY WITH THE ACTUAL STATE OF AFFAIRS OF THE ASSESSEE DULY BACKED BY EXTERNAL EVIDENCES LIKE DLC RATES ET C, THUS, THE IMPUGNED OBSERVATION OF LD. CIT(A) DESERVE S TO BE IGNORED AND EXCLUDED. 1.3 THAT THE LD. CIT(A) HAS FURTHER ERRED IN FAILING TO CONSIDER THAT IT IS ONLY THE REAL INCOME WHICH CAN B E TAXED AND NOT A HYPOTHETICAL INCOME; HENCE NO ADDIT ION CAN BE MADE ON THE BASIS OF A PAPER CONTENTS OF WHI CH MERELY REPRESENT A HYPOTHETICAL INCOME / ESTIMATION AND PROJECTIONS. 2. THE ASSESSEE HAS FILED THIS APPEAL AFTER DELAY OF 25 DAYS PRESCRIBED UNDER THE LAW, FOR WHICH ITS FILED AN APPLICATION FO R CONDONATION OF DELAY. IN ITS CONDONATION OF APPLICATION, THE ASSESSEE EXPLAI NED THE REASONS AS TO WHY THE APPEAL FILED AFTER DELAY OF 25 DAYS. FROM PERUS AL OF CONDONATION 3 ITA NO. 576/JP/2014 UNIQUE BUILDERS (REALTY) VS DCIT APPLICATION, WE FIND MERIT IN ITS EXPLANATION FOR DE LAY FILING OF APPEAL, THEREFORE, WE CONDONE THE DELAY. 3. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESS EE DERIVED INCOME FROM BUSINESS OF REAL ESTATE DEVELOPMENT/BUILDER. T HE ASSESSEE FILED ITS RETURN. THERE WAS A SEARCH SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON UNIQUE GROUP ON 28/ 01/2008. THE ASSESSEE IS ONE OF THE MEMBERS OF THIS GROUP. THE LD ASSESSIN G OFFICER OBSERVED THAT DURING THE COURSE OF SEARCH, CASH, JEWELLERY, STOCK IN TRADE, VALUABLES, DOCUMENTS, BOOKS OF ACCOUNT AND/OR LOOSE PAPERS WERE FOUND AND SEIZED FROM THE PREMISES OF THE ASSESSEE. THE ASSESSEES CA SE WAS SCRUTINIZED U/S 143(3) OF THE ACT. THE LD ASSESSING OFFICER REJECTE D THE BOOK RESULT ON THE BASIS OF EVIDENCE FOUND DURING THE COURSE OF SEARCH I.E. THE ASSESSEE HAS NOT MAINTAINED CLOSING STOCK AS WELL AS DETAILS/INFO RMATION INCLUDING ORIGINAL VOUCHERS FOR THE PAYMENTS MADE IN RESPECT OF DIRECT EXPENSES. THE ASSESSEE ALSO REQUIRED TO FOLLOW ACCOUNTING STANDAR D (AS-2) AS PER GUIDELINE ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA. HE FURTHER FOLLOWED THE HON'BLE SUPREME COURT DECISION IN THE CASE OF K ACHWALA GEMS VS JCIT 288 ITR 10 (SC). THE ASSESSEE HAD FOLLOWED PROJECT COM PLETION METHOD BUT THE LD ASSESSING OFFICER APPLIED PERCENTAGE COMPLET ION METHOD TO DETERMINE THE ASSESSEES INCOME. THEREFORE, HE GAVE REASONABLE OPPORTUNITY OF BEING 4 ITA NO. 576/JP/2014 UNIQUE BUILDERS (REALTY) VS DCIT HEARD TO THE ASSESSEE. THE ASSESSEE ALSO FILED REPLY , WHICH HAS BEEN REPRODUCED ON PAGE NOS. 8 TO 24 OF THE ASSESSMENT O RDER. AFTER CONSIDERING THE AS-9, THE LD ASSESSING OFFICER APPLIED PERCENTA GE COMPLETION METHOD FOR CALCULATING THE INCOME OF THE ASSESSEE. THE ASSESSEE HAS DECLARED INCOME OF RS. (-)7,15,781/- IN ITS RETURN OF INCOME IN THE RELEVANT YEAR ON THE BASIS OF PROJECT COMPLETION METHOD. AS PER WORKING MADE BY THE ASSESSING OFFICER ON THE BASIS OF PERCENTAGE COMPLETION METHOD, HE DE TERMINED THE TAXABLE INCOME AT RS. 99,71,838/-. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD NOT SUSTAINED THE INVOKING OF PROVISIONS OF SECTION 145(3) OF THE ACT AND ALSO DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. SHE ALSO REFERRED TH E HONBLE ITAT DECISION AND DIRECTED THE ASSESSING OFFICER TO CONSIDER WHATE VER DISCREPANCIES FOUND ON THE BASIS OF BUNCH OF LOOSE PAPERS AND STATEMENT OF ONE SHRI NAVIN BHUTANI AT THE TIME OF DETERMINING THE INCOME ON TH E BASIS OF PROJECT COMPLETION BASIS. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS ARGUED THAT THE HONBLE ITAT HAS ALLOWED APPEAL I N PRECEDING YEAR AND ORDER OF THE HONBLE ITAT HAS BEEN PRODUCED BEFORE T HE LD CIT(A) DURING 5 ITA NO. 576/JP/2014 UNIQUE BUILDERS (REALTY) VS DCIT THE COURSE OF APPELLATE PROCEEDINGS. EVEN SHE MADE REMARKS ON THE BASIS OF SEIZED MATERIAL AND STATEMENT OF SHRI NAVIN BHUT ANI AND DIRECT THE ASSESSING OFFICER TO CONSIDER THE INCRIMINATING DOC UMENTS AT THE TIME OF DETERMINING INCOME ON THE BASIS OF PROJECT COMPLETI ON METHOD, WHICH DESERVED TO BE SET ASIDE AS THIS ISSUE HAS ALREADY BEEN CONSIDERED BY THE HONBLE ITAT AND APPEAL HAS BEEN DECIDED IN ITA NO. 464, 465 & 466/JP/2012 AND OTHER CASES VIDE ORDER DATED 30/04/ 2015 IN ASSESSEES OWN CASE. HE HAS DRAWN OUR ATTENTION ON PAGE NO2. 71 TO 79 OF THE ABOVE ORDER WHEREIN THE REJECTION OF BOOKS U/S 145(3) HAS NOT JUSTIFIED ON THE BASIS OF PERCENTAGE COMPLETION METHOD AND INCOME OF THE ASSESSEE IS TO BE ASSESSED ON THE BASIS OF PROJECT COMPLETION METHOD. WHATEVER INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH AND STA TEMENT OF SHRI NAVIN BHUTANI RECORDED ON 28/01/2009 U/S 132(4) OF THE AC T HAS BEEN CONSIDERED BY THE HONBLE ITAT IN PARAGRAPH NO. 41 AT PAGE 77 A ND 78. THE APPEAL HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THEREFORE, REMARKS MADE BY THE LD CIT(A) REQUIRED TO BE EXPUNGED. 6. AT THE OUTSET, THE LD CIT DR HAS VEHEMENTLY SUPP ORTED THE ORDER OF THE LD ASSESSING OFFICER. 6 ITA NO. 576/JP/2014 UNIQUE BUILDERS (REALTY) VS DCIT 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE S APPEAL ON ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN ACCEPTED AND ALLOWED IN FAVOUR OF THE ASSESSEE, EVEN THEN THE ASSESSEE FILED THE APPE AL ON VARIOUS COMMENTS MADE BY THE LD CIT(A) IN THE APPEAL ORDER ON THE BAS IS OF SEIZED MATERIAL AND STATEMENT OF SHRI NAVIN BHUTANI, WHICH HAS ALREA DY BEEN EXAMINED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN ITA N O. 464, 465 & 466/JP/2012 AND OTHER CASES VIDE ORDER DATED 30/04/ 2015. WE HAVE ALSO GONE THROUGH THE ORDER OF THE COORDINATE BENCH FROM PAGE NO. 71 TO 79. WE DO NOT FIND ANY MERIT IN THE ORDER OF THE LD CIT( A). THE LD ASSESSING OFFICER ALWAYS IS FREE TO DECIDE ON THE BASIS OF RET URN OF THE ASSESSEE ON PROJECT COMPLETION BASIS. THE ASSESSEE IS ALSO FREE TO RAISE ITS ARGUMENT AT THE TIME OF INCOME ASSESSED ON THE BASIS OF PROJECT COMPLETION METHOD. ACCORDINGLY, WE ALLOW THE ASSESSEES APPEAL. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/02/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 TH FEBRUARY, 2016 7 ITA NO. 576/JP/2014 UNIQUE BUILDERS (REALTY) VS DCIT RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S UNIQUE BUILDERS & DEVELOPERS (REALTY), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR`VIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 576/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR