Deputy Commissioner Of Income Tax, Circle- 6(1)(1), Bangalore V. M/s. Garuda Builders, Bengaluru

ITA 662/BANG/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6426 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-02-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 21-09-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 144; 142(1); 133A; 143(2); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER ITA NO. 662 /BANG/20 20 (ASSESSMENT YEAR: 20 16 - 17 ) DY. COMMISSIONER OF INCOME TAX, CIRCLE 6(1)(1 ), BANGALORE. .APPELLANT . VS. M/S. GARUDA BUILDERS , NO.10, OPP. KNS COLLEGE, LENKAPPA BUILDING, GIRUMENUHALLI VILL., YELAHANKA, BANGALORE - 560 064 RESPONDENT. C.O.NO.19/BANG/2020 ( IN ITA NO. 662 /BANG/20 20) (ASSESSMENT YEAR: 20 16 - 17 ) (BY ASSESSEE) ASSESSEE /C.O. BY: SHRI RAJEEV NULVI, ADVOCATE. REVENUE BY: SHRI MUZAFFAR HUSSAIN, CIT (D.R) DATE OF HEARING : 01.02 .20 2 1 . DAT E OF PRONOUNCEMENT : 02 .02. 20 2 1 . O R D E R PER SHRI CHANDRA POOJARI, A.M. : THE APPEAL BY REVENUE AND CROSS OBJECTION BY THE ASSESSEE FILED AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS) , BANGALORE - 6 DT.27.01.2020 FOR THE ASSESSMENT Y EAR 2016 - 17. 2 ITA NO. 6 6 2/BANG/2020 & C.O. NO.19/BANG/2020 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 3. IN C.O., THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS : 3 ITA NO. 6 6 2/BANG/2020 & C.O. NO.19/BANG/2020 4 ITA NO. 6 6 2/BANG/2020 & C.O. NO.19/BANG/2020 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE FILED RETURN OF INCOM E ELECTRONICALLY ON 28.10.2016 AND THE CASE WAS SELECTED FOR SCRUTINY BY ISSUING A NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 ('THE ACT') DT.18.07.2017 BY THE ASSESSING OFFICER. NO REPRESENTATI ON FROM THE ASSESSEE BEFORE THE ASSESSING OFFICER. THE AS SESSING OFFICER PASSED ORDER U/S. 144 OF THE ACT BY ADDING CLOSING WORK - IN - PROGRESS AMOUNTING TO RS.10,44,04,228 TO THE RETURNED INCOME . AGGRIEVED THE ASSESSEE, APPEALED BEFORE THE CIT (APPEALS). BEFORE THE CIT (APPEALS) THE ASSESSEE SUBMI TTED THAT THER E WAS A SURVEY CONDUCTED IN SEPT., 2016 IN SISTER CONCERN IN THE CASE OF SLV DEVELOPERS PVT. LTD. U/S. 133A OF THE ACT AND IMPOUNDED BOOKS OF ACCOUNTS. DURING THE COURSE OF ASSESSMENT , IN SPITE OF REPEATED REQUESTS, THE ASSESSEE COULD NOT GET THE XEROX C OPIES OF IMPOUNDED DOCUMENTS/MATERIAL. AFTER HEARING, THE CIT (APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.10,44,04,228 ON THE REASON THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY REGARDING WORK IN PROGRESS NOR SHE WAS IN POSSE SSION OF ANY DISCRIMINATING MATERIAL. THE ONLY REASON GIVEN BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT RESPONDED TO THE NOTICE GIVEN. ACCORDING TO THE CIT (APPEALS) , THE ADDITION TOWARDS WORK IN PROGRESS WAS ARBITRARY AND CANNOT BE SUSTAINED. AG AINST THE ACTION OF THE CIT (APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT (APPEALS) OUGHT NOT HAVE ACCEPTED THE PLEA OF THE ASSESSEE THAT RELEVANT DOCUMENTS WERE 5 ITA NO. 6 6 2/BANG/2020 & C.O. NO.19/BANG/2020 IMPOUNDED DURING TH E SURVEY ON ASSESSEE'S SISTER CONCERN WITHOUT PROOF OF SUPPORT OF CLAIM AND HE HAS DELETED THE ADDITION WITHOUT GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER. THE LEARNED DEPARTMENTAL REPRESENTATIVE SOUGHT FOR AN OPPORTUNITY TO ASSESSING OFFIC ER TO CONSIDER THE PLEA OF THE ASSESSEE THAT THE ADDITION IS WRONG AS THE ASSESSEE HAS NOT RESPONDED TO THE NOTICE OF THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. ON THE OTHER HAND, THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSES SEE SUBMITTED THAT THERE WAS A SURVEY IN THE CASE OF ASSESSEE'S SISTER CONCERN, THE SLV DEVELOPERS PVT. LTD. THE DEPARTMENT AUTHORITIES IMPOUNDED ALL THE BOOKS OF ACCOUNTS OF SLV DEVELOPERS PVT. LTD. AND OTHER SISTER CONCERN , THE ASSESSEE IS ALSO ONE AMON G THEM. SUCH IS THE FACT TO PROVIDE THE INFORMATION SOUGHT BY THE ASSESSING OFFICER U/S. 142(1) OR SHOW CAUSE, THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO GET XEROX COPIES OF IMPOUNDED DOCUMENTS. THE ASSESSING OFFICER FAILED TO PROVIDE THE SAME AND A LSO AFTER THE SURVEY WAS CONDUCTED, BOOKS OF ACCOUNTS WERE IMPOUNDED, THE IMPOUNDING ORDER U/S. 133A(3) OF THE ACT HAS NOT BEEN SERVED ON THE ASSESSEE TILL DATE. THE ASSESSING OFFICER ALSO HAS ACTED AGAINST THE ASSESSEE IN A NON - CO - OPERATIVE OR A RUDE M ANNER FOR THE REASON THAT EVEN UP TO THE DATE OF PASSING OF ORDER, THE ASSESSING OFFICER HAS NOT PROVIDED ANY XEROX COPIES OF IMPOUNDED MATERIAL TO THE ASSESSEE TO REPRESENT ITS CASE. THE LD. AR SUBMITTED THAT SUCH BEING THE FACT, THE ASSESSING OFFICERS STATEMENT THAT THE ASSESSEE HAS NOT RESPONDED DURING THE COURSE OF ASSESSMENT IS COMPLETELY FALSE. FURTHER IT WAS SUBMITTED THAT 6 ITA NO. 6 6 2/BANG/2020 & C.O. NO.19/BANG/2020 THE ADDITION MADE TOWARDS UNEXPLAINED WORK IN PROGRESS IS NOTHING BUT CLOSING STOCK. SUCH CLOSING STOCK SHOULD BE TREATED A S OPENING STOCK FOR THE NEXT ASSESSMENT YEAR. THE LD. AR ARGUED THAT TH IS BEING A TAX NEUTRAL AND SUCH ADDITION MADE BY THE ASSESSING OFFICER CANNOT BE SUSTAINED. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS AN ADMITTED FACT THAT IN THIS CASE THE ASSESSMENT ORDER WAS PASSED EXPARTE U/S. 144 OF THE ACT. BEFORE THE CIT (APPEALS), THE ASSESSEE FURNISHED CERTAIN FINANCIAL STATEMENTS AND THE CIT (APPEALS) WITHOUT CALLING REMAND REPORT/COMMENTS FROM THE ASSESSING OFFICER PAS SED THE APPELLATE ORDER WHICH IS IMPROPER. IN OUR OPINION, WHEN THE ASSESSMENT ORDER IS PASSED EXPARTE WITHOUT ANY RESPONSE FROM THE ASSESSEE TO THE NOTICE ISSUED BY THE ASSESSING OFFICER, THE CIT (APPEALS) SHALL CALL FOR REMAND REPORT BEFORE DECIDING THE ISSUE ON MERIT. SINCE THE CIT (APPEALS) FAILED TO DO SO, IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE ENTIRE DISPUTE TO THE FILE OF ASSESSING OFFICER FOR FRESH CONSIDERATION. THE ASSESSING OFFICER SHALL PROVIDE ALL MATERIAL IMPOUNDED TO THE ASSESSEE B EFORE DECIDING THE ISSUE ON MERIT. THE APPEAL OF REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. C.O. NO.19/BANG/2020 7. IN THE FIRST GROUND OF C.O., THE ASSESSEE ALLEGES THAT THE ASSESSMENT ORDER WS PASSED BY ACIT, CIRCLE 6(3)(1), BANGALORE. HOWEVER, THE APPEAL WAS FILED BY DCIT CIRCLE 6(1)(1), BANGALORE. AS SUCH, THE APPEAL IS NOT MAINTAINABLE. 7 ITA NO. 6 6 2/BANG/2020 & C.O. NO.19/BANG/2020 8. WE HAVE HEARD BOTH THE PARTIES ON THIS LEGAL ISSUE AND WE FOUND THAT THERE WAS MERGE OF ACIT, CIRCLE 6(3)(1), BANGALORE WITH DCIT, CIRCLE 6 (1)(1), BANGALORE BY ;AN ORDER OF COMPETENT AUTHORITY . THE DEPARTMENT FILED A LETTER DT.6.12.2020 BEFORE HE TRIBUNAL VIDE ACKNOWLEDGEMENT NO.194 SATING THE ABOVE FACTS. BEING SO, IN OUR OPINION, THE APPEAL WAS FILED BY THE PROPER AUTHORITY. IN THIS VIEW OF THE FACT, THE GROUND NO.1 IN C.O. IS DISMISSED. 9. GROUND N O S.2 & 3 OF C.O . ARE ONLY TO SUPPORT THE ORDER OF CIT (APPEALS) STATING THAT THE ADDITION WAS RIGHTLY DELETED. SINCE THE ISSUE ON MERIT WE HAVE REMITTED TO THE FILE OF ASSESSING OFFICER IN R EVENUES APPEAL, THE GROUND NOS.2 & 3 OF C.O. HAVE BECOME INFRUCTUOUS AND DISMISSED ACCORDINGLY. 10. IN THE RESULT, THE REVENUES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND C.O. BY ASSESSEE IS DISMISSED. PRONOUNCED IN THE OP EN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/ - SD/ - ( SMT. BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 02 .02. 20 2 1 . *REDDY GP 8 ITA NO. 6 6 2/BANG/2020 & C.O. NO.19/BANG/2020 COPY TO 1. THE APPELLANT 2. THE RESPOND ENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE