M/S.RAVECHI INFRASTRUCTURE PROJECTS (NOW KNOWN AS T BHIMJYANI REALTY PRIVATE LIMITED), MUMBAI V. ITO 28(2)(5), MUMBAI

ITA 6010/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0858 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 22-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JYOTHILAKSHMI NAYAK
• Keywords: Corroborative evidences
• Section: 133(6); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI G. MANJUNATH A , ACCOUNTANT MEMBER ITA NO. 6010 / MUM . /2018 ( ASSESSMENT YEAR : 201 2 1 3 ) M/S. RAVECHI INFRASTRUCTURE PROJECTS (NOW KNOWN AS T. BHIMJYANI REALTY P. LTD.) 301, A WING, FORTUNE 2000 BANDRA (EAST), MUMBAI 400 051 PAN : AAGFR7919B . APPELLANT V/S INCOME TAX OFFICER WARD 28(2)(5), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SMT. JYOTHI LAKSHMI NAYAK DATE OF HEARING 0 3 .12.2019 DATE OF ORDER 19.12.2019 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE ORDER DATED 9 TH JULY 2018 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2 6 , MUMBAI, F O R THE ASSESSMENT YEAR 20 12 13. 2. THE DISPUTE IN THE PRESENT APPEAL RELATES TO REDUCTION OF CERTAIN EXPENDITURE FROM THE WORK IN PROGRESS (WIP). 2 M/S. RAVECHI INFRASTRUCTURE PROJECTS (NOW KNOWN AS T. BHIMJYANI REALTY P. LTD.) 3. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF T HE ASSESSEE. IT IS SEEN FROM RECORD , ON THE EARLIER DATE OF HEARING ALSO, THE ASSESSEE DID NOT APPEAR. THUS, IT APPEARS THAT THE ASSESSEE IS NEITHER SERIOUS NOR INTERESTED IN PROSECUTING ITS APPEAL. IN VIEW OF THE AFORESAID, WE PROCEED TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER H EARING THE LEARNED DEPARTMENT AL REPRESENTATIVE AND ON THE BASIS OF MATERIAL ON RECORD. 4. BRIEF FACTS ARE, THE ASSESSEE COMPANY IS CARRYING ON BUSINESS OF BUILDER AND DEVELOPER. FOR THE ASSESSMENT YEAR UNDER DISPUTE, IT FILED ITS RETURN OF INCOME ON 30 TH SEP TEMBER 2012 DECLARING LOSS OF ` 19,52,413. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DEBITED ` 15,41,079, TOWARDS CLUB HOUSE EXPENSES. FURTHER, HE NOTICED THAT OUT OF THE EXPENDITURE CLAIMED OF ` 11,97,43, 279, AN AMOUNT OF ` 11,80,02,200, WAS FOR PURCHASE OF BUNGALOWS. NOTICING THE ABOVE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF SUCH EXPENSES WITH SUPPORTING EVIDENCES. AS OBSERVED BY THE ASSESSING OFFICER, ON A PERUSAL OF T HE SALE DEED FURNISHED BY THE ASSESSEE, HE FO UND THAT CLUB HOUSE EXPENDITURE WAS INCURRED BY THE ASSESSEE ON BEHALF OF PURCHASER S WHICH WAS DULY PAID BY THE PURCHASER. THUS, HE CONCLUDED THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM SUCH EXPENDITURE. ACCORDIN GLY, HE REDUCED THE SAID AMOUNT FROM THE WIP AND ADDED BACK 3 M/S. RAVECHI INFRASTRUCTURE PROJECTS (NOW KNOWN AS T. BHIMJYANI REALTY P. LTD.) TO THE INCOME OF THE ASSESSEE. INSOFAR AS THE EXPENDITU RE CLAIMED TOWARDS PURCHASE OF B UNGALOWS, THE ASSESSING OFFICER OBSERVED THAT IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 133(6) OF THE AC T TO VEDANT REALTY PVT. LTD., IT WAS FOUND THAT THE SAID COMPANY HAD PURCHASED TWO BUNGALOWS FROM THE ASSESSEE AND SUBSEQUENTLY, THE PURCHASE OF BUNGALOWS WERE CANCELLED AND THE COMPANY RECEIVED BACK AN AMOUNT OF ` 11.58 CRORE INCLUDING COMPENSATION OF ` 2 CRORE. WH EREAS, THE ASSESSING OFFICER NOTICED, THE ASSESSEE HAD CLAIMED EXPENDITURE OF ` 11,80,02,200, TOWARDS RE PURCHASE VALUE PAID TO VEDANT REALTY PVT. LTD. ACCORDINGLY, THE ASSESSING OFFICER ADDED BACK THE DIFFERENTIAL AMOUNT OF ` 22,02,200, TO THE INCOME OF THE ASSESSEE BY REDUCING THE SAME FROM WIP. THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST A PPELLATE AUTHORITY, HOWEVER, LEARNED COMMISSIONER (APPEALS) SUSTAINED THE ADDITIONS MADE BY THE ASSESSING OFF ICER. 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN, BEFORE LEARNED COMMISSIONER (APPEALS) THE ASSESSEE HAD SUBMITTED THAT BY MIST AKE, THE CLUB HOUSE EXPENDITURE WAS CHARGED TO THE WIP IN THE I MPUGNED ASSESSMENT YEAR. IT WAS SUBMITTED THAT REALIZING THE MISTAKE, THE ASSESSEE HAD REVERSED THE ENTRY IN THE FINANCIAL YEAR 2014 15 BY REDUCING THE SAME FROM THE WIP. THUS, THE ASSESSEE HAD SUBMITTED 4 M/S. RAVECHI INFRASTRUCTURE PROJECTS (NOW KNOWN AS T. BHIMJYANI REALTY P. LTD.) THAT SINCE THE AMOUNT HAS ALREADY BEEN TAXED IN THE ASSESSMENT YEAR 2015 16, IT SHOULD NOT BE ADDED IN THIS ASSESSMENT YEAR. SIMILARLY, IN RESPECT OF THE AMOUNT PAI D TOWARDS RE PURCHASE VALUE OF B UNGALOWS FROM VEDANT REALTY PVT. LTD., THE ASSESSEE HAD SUBMITTED THAT THOUGH IT HAD NOT RECEIVED THE DIFFERENTI AL AMOUNT FROM THE BUYER ON CANCELLATION OF DEAL, HOWEVER, IT HAS ALREADY CONSIDERED THE SALE AMOUNT AND OFFERED AS INCOME IN THE ASSESSMENT YEAR 2010 11. THEREFORE, THE AMOUNT OF ` 22,02,200, SHOULD NOT BE REDUCED FROM WIP. ON A PERUSAL OF FACTS ON RECORD AS WELL AS THE REASONING OF LEARNED COMMISSIONER (APPEALS), IT BECOMES CLEAR THAT THE ASSESSEE ITSELF ADMITS THAT THE CLUB HOUSE EXPENDITURE IS NOT CHARGEABLE TO WIP. THAT BEING THE CASE, THE ASSESSING OFFICER, IN OUR VIEW, WAS JUSTIFIED IN REDUCING IT FR OM THE WIP AND ADDING BACK TO THE INCOME OF THE ASSESSEE. IN CASE, THE ASSESSEE HAS OFFERED THE VERY SAME AMOUNT AS INCOME IN THE ASSESSMENT YEAR 2015 16, IT IS FOR THE ASSE SSEE TO DEMONSTRATE SUCH FACT THROUGH SUPPORTING EVIDENCE AND CLAIM RELIEF AS PERMI SSIBLE IN LAW IN THE ASSESSMENT YEAR 2015 16. AS REGARD THE REDUCTION OF DIFFERENTIAL AMOUNT OF ` 22,02,200, FROM WIP, FACTS ON RECORD CLEARLY REVEAL THAT THE AMOUNT ACTUALLY PAID BY THE ASSESSEE TO THE BUYER OF THE BUNGALOW IS LESS THAN WHAT IS CHARGED TO WIP. IT IS THE CONTENTION OF THE ASSESSEE THAT THE ENTIRE PURCHASE VALUE HAS BEEN SHOWN AS SALES IN ASSESSMENT YEAR 2010 11. HOWEVER, THIS CLAIM HAS 5 M/S. RAVECHI INFRASTRUCTURE PROJECTS (NOW KNOWN AS T. BHIMJYANI REALTY P. LTD.) NOT BEEN FACTUALLY PROVED BY THE ASSESSEE THROUGH SUPPORTING EVIDENCE EITHER BEFORE THE DEPARTMENTAL AUTHO RITIES OR EVEN BEFORE US. THAT BEING THE CASE, WE DO NOT FIND A NY INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER (APPEALS). GROUNDS ARE DISMISSED. 6. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 19.12.2019 SD/ - G. MANJUNATH A ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 19.12.2019 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI