Arun Excello Construction LLP, CHENNAI V. DCIT, CHENNAI

ITA 597/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7431 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 15-03-2016
• Court: TRIBUNAL
• Department Lawyers: JAIRAM RAIPURA
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 263

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 597 /MDS/2016 / ASSESSMENT YEAR :20 12 - 13 M/S. ARUN EXCELLO CONSTRUCTION LLP, NO. 18, BHATTAD TOWERS, WEST COTT ROAD, ROYAPETTAH, CHENNAI 600 014. [PAN: A AUFA2577J ] VS. THE DEPUTY COMMISSIONER OF INCOM E TAX , NON - CORPORATE CIRCLE 11 , C HENNAI 600 0 34 . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI B. RAMAKRISHNAN, C.A. / RESPONDENT BY : S HRI JAIRAM RAIPURA , CIT / DA TE OF HEARING : 2 9 . 1 2 .201 6 / DATE OF P RONOUNCEMENT : 24 . 0 3 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. PRINCIPAL COMMIS SIONER OF INCOM E TAX , C HENNAI DATED 11 . 0 2 .201 6 RELEVANT TO THE ASSESSMENT YEAR 20 12 - 13 CHALLENGING THE ORDER PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE ENGINEERING CO NTRACT, CIVIL WORK AND DEVELOPMENT OF FLATS. THE ASSESSEE HAS I.T.A. NO . 597 / M/ 1 6 2 FILED ITS RETURN OF INCOME ON 29.09.2012 ADMITTING INCOME OF .3,97,76,230/ - . THE ASSESSEE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 25.03.2015 ACCEPTING THE TOTAL INCOME OF THE ASSESSEE. 2.1 SUBSEQUENTLY, THE LD. PCIT PASSED ORDER UNDER SECTION 26 3 OF THE ACT BY HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AGAINST WHICH, THE ASSESSEE PREFERRED FURTHER APPEAL BEFORE THE TRIBUNAL. 3. BEFORE US, BY SEEKING PERMISSION TO FILE ADDITIONAL GROUNDS OF APPEAL CHALLENGING JURISDICTION FOR INVOKING THE PROVISIONS OF THE SECTION 263 OF THE ACT , THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. PCIT HAS ERRED IN INVOKING THE PROVISIONS OF SECT ION 263 OF THE ACT SINCE HE HAS TO BE SATISFIED TWIN CONDITIONS, NAMELY (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. COUNSEL FOR THE ASSESSEE HAS VEHEMENTLY ARG UED THAT IF ONE OF THE ABOVE CONDITION IS ABSENT, I.E., IF THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE, RECOURSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. THEREFORE, IT CAN BE INFERRED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE I.T.A. NO . 597 / M/ 1 6 3 TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND PLEADED THAT THE ORDER PASSED UNDER SECTION 263 OF THE ACT SHOULD BE Q UASHED. 4. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. PCIT. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW INCLUDING PAPER BOOK FILED BY THE AS SESSEE . IN THIS CASE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 25.03.2015 BY ACCEPTING THE INCOME RETURNED BY THE ASSESSEE AND THE SAME IS REPRODUCED BELOW: 2. IN RESPONSE TO THE NOTICE, SHRI A. SAMPATH KUMAR AND SRI V.P. NAGARAJAN AUTH ORISED REPRESENTATIVE S OF THE ASSESSEE ATTENDED. THE ASSESSEE WAS REQUIRED TO FURNISH ALL BANK ACCOUNT STATEMENTS, TDS REMITTANCES, EVIDENCES FOR DEDUCTION CLAIMED UNDER CHAPTER VIA AND VARIOUS OTHER DETAILS. THE DETAILS AND THE BANK ACCOUNTS PRODUCED BY THE ASSESSEE WERE VERIFIED. 3. THE ASSESSMENT IS MADE U/S 143(3) OF THE INCOME TAX ACT, 1961 AS UNDER ACCEPTING THE INCOME AS RETURNED. TOTAL INCOME RETURNED : .3,97,76,230/ - TOTAL INCOME ASSESSED : .3,97,76,230/ - 6. FROM THE ABOVE, IT IS EVIDEN T THE ASSESSMENT ORDER DID NOT SPEAK AS TO WHETHER THE ASSESSEE HAS MADE ANY INVESTMENT OR EARNED ANY EXEMPT INCOME OR ADMITTED ANY EXPENDITURE TOWARDS EARNING EXEMPT INCOME, ETC. IN VIEW OF THE ABOVE, AFTER EXAMINING THE ASSESSMENT DETAILS, UNDER THE PROV ISIONS OF SECTION 263 OF THE ACT, THE LD. PCIT HAS CALLED FOR DETAILS WITH REGARD TO THE CLAIM OF INTEREST EXPENSES AND APPLICABILITY OF PROVISIONS OF I.T.A. NO . 597 / M/ 1 6 4 SECTION 14A OF THE ACT. IN RESPONSE THERETO, THE FURNISHED THE DETAILS WITH REGARD TO THE INVESTMENTS MADE IN L & T ARUN EXCELLO REALTY PVT. LTD. AS WELL AS SOURCE FOR THE INVESTMENTS. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LD. PCIT SET ASIDE THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO ANALYZE THE INVESTMENTS AND SOURCE OF INVESTMENTS AND TO DECIDE APPLICABILITY OF PROVISIONS OF SECTION 14A R.W. RULE 8D. SINCE THE ASSESSING OFFICER HAS NOT PASSED THE DETAILED SPEAKING ORDER UNDER SECTION 143(3) OF THE A CT AND THE SAME WAS VERY CRYPTIC, WE FIND NO ERROR IN THE ORDER PASSED BY THE LD. PCIT UNDER SECTION 263 OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED IN THE GROUNDS OF APPEAL AS WELL AS GROUNDS RAISED IN THE FORM OF ADDITIONAL GROUNDS OF APPEAL ARE DISMISS ED. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED ON THE 24 TH MARCH , 201 7 AT CHENNAI. SD/ - SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 24 . 0 3 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.