A BEE ASSOCIATES, MUMBAI V. ACIT 15(2), MUMBAI

ITA 712/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79298 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 03-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKASH AGARWAL
• Keywords: Capital receipt

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A B ENCH, MUMBAI . , !' # # # # , $% &'() , $* +, $ ' BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ I.T.A. NO.712/MUM/2012 ( - - - - / ASSESSMENT YEAR :2005-06 M/S. A BEE ASSOCIATES, PARK PARADISE, KAYABEE CHS LTD., NEAR SHANTIVAN MHB COMPLEX, OSHIWARA, ANDHERI (W), MUMBAI-400 053 / VS. THE ACIT-15(2), MATRU MANDIR, MUMBAI-400 053 ,. $* ./ /0 ./ PAN/GIR NO. : AAKFM 3568K ( .1 / APPELLANT ) .. ( 23.1 / RESPONDENT ) .1 4 $ / APPELLANT BY: NONE 23.1 5 4 $ / RESPONDENT BY: SHRI VIKASH AGARWAL 5 6* / DATE OF HEARING :07.07.2014 7- 5 6* / DATE OF PRONOUNCEMENT :07.07.2014 +$8 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE LD. CIT(A)-26, MUMBAI DT.4.11.2011 PERTAINING TO A .Y. 2005-06. 2. THE ASSESSEE HAS RAISED FOLLOWING TWO SUBSTANTIV E GROUNDS OF APPEAL: ITA NO. 712/M/2012 2 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN MAKING ADDITION OF RS. 8,50,000/- B Y TREATING ADVANCE RECEIVED FROM CUSTOMERS AGAINST MAINTENANCE EXPENSES TO BE INCURRED ON BEHALF OF THE CUSTOMERS TILL FORMATION OF THE SOCIETY AS REVENUE RECEIPTS INSTEA D OF CAPITAL RECEIPTS. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE AO ERRED IN MAKING ADDITION OF RS.17,74,250/- B EING THE EXCESS AMOUNT RECEIVED OVER THE AGREEMENT PRICE PER TAINING TO THE CURRENT ASSESSMENT YEAR AND ALSO PERTAINING TO THE PREVIOUS ASSESSMENT YEARS ALTHOUGH THE SAME WAS BEY OND THE JURISDICTION OF THE AO. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE AO ERRED IN CONFIRMING THE ABOVE ADDITIONS MADE BY THE AO. (B) RELIEF PRAYED 1)TO DELETE THE ADDITION OF RS. 8,50,000/- ON ACCOU NT OF MAINTENANCE CHARGES RECEIVED FROM CUSTOMERS. 2) TO DELETE THE ADDITION OF RS. 17,74,250/- ON ACC OUNT OF EXCESS RECEIVED OVER AGREEMENT PRICE FROM THE BUYER S PERTAINING TO EARLIER YEARS. 3. THE ASSESSEE IS A BUILDER. THE RETURN WAS FILED ON 31.10.2005 DECLARING TOTAL INCOME AT RS. 15,49,310/-. THE RET URN WAS SELECTED FOR SCRUTINY ASSESSMENT AND STATUTORY NOTICES WERE ACCO RDINGLY ISSUED AND SERVED UPON THE ASSESSEE. 3.1. DURING THE COURSE OF THE ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED RS. 8.50 LAKHS FROM ITS CUSTOMERS ON ACCOUNT OF MAINTENANCE CHARGES. THE A SSESSEE WAS ASKED TO JUSTIFY WHY THIS AMOUNT HAS NOT BEEN SHOWN IN ITS I NCOME. THE ASSESSEE REPLIED THAT SINCE THE FLAT OWNERS HAVE NOT FORMED ANY SOCIETY IN THE ITA NO. 712/M/2012 3 BUILDING, MAINTENANCE EXPENSES ARE BORNE BY THE ASS ESSEE ITSELF THEREFORE, THE AMOUNT RECEIVED FROM THE CUSTOMERS ARE CAPITAL RECEIPTS. THIS SUBMISSION OF THE ASSESSEE DID NOT FIND FAVOUR FROM THE AO WHO WAS OF THE OPINION THAT SINCE THE SOCIETY IS NOT FORMED, T HE ASSESSEE HAS DEBITED MUNICIPAL FEES, SECURITY CHARGES, WATER CHARGES EXP ENSES TO ITS PROFIT AND LOSS ACCOUNT THEREFORE ANY AMOUNT RECEIVED FROM THE OWNERS OF THE FLAT ON ACCOUNT OF THESE MAINTENANCE EXPENSES HAVE TO BE TA KEN IN THE INCOME SIDE. THE AO ACCORDINGLY ADDED THE AMOUNT OF RS. 8 .50 LAKHS. THE AO FURTHER NOTICED THAT THERE IS A RECEIPT OF RS. 17,7 4,250/- WHICH IS EXCESS AMOUNT OVER AGREEMENT PRICE OF THE SALE OF FLAT. T HE ASSESSEE CLAIMED IT TO BE CAPITAL RECEIPT. THE AO TREATED THIS EXCESS AMOUNT OF RS. 17,74,250/- AS INCOME OF THE ASSESSEE. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREF ORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND DISPOSE OF THIS APPEAL EX PARTE. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN SO FAR AS ADDITION OF RS. 8.50 LAKHS IS CONCERNED, WE FIND THAT THE AO HAS RI GHTLY TREATED THE SAID AMOUNT AS INCOME OF THE ASSESSEE FOR THE SIMPLE REA SON THAT THE ASSESSEE HAS BEEN DEBITING ITS PROFIT AND LOSS ACCOUNT WITH MAINTENANCE CHARGES THEREFORE ANY SUM RECEIVED FROM THE FLAT OWNERS ON ACCOUNT OF THESE EXPENSES HAVE TO BE TREATED AS REVENUE RECEIPT OF T HE ASSESSEE. NO INTERFERENCE IS CALLED FOR. GROUND NO. 1 IS DISMIS SED. 7. IN SO FAR AS ADDITION OF RS. 17,74,250/- IS CONC ERNED, WE FIND THAT NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THI S AMOUNT PARTLY ITA NO. 712/M/2012 4 PERTAINS TO PREVIOUS ASSESSMENT YEARS AND IT IS STI LL OPEN LIABILITY. IT IS ALSO NOT CLEAR WHY THIS EXCESS AMOUNT HAS BEEN RECE IVED BY THE ASSESSEE OVER AND ABOVE THE AGREED PRICE FROM THE BUYERS OF THE FLAT. SINCE NO SATISFACTORY EVIDENCE HAVE BEEN BROUGHT ON RECORD, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CI T(A). GROUND NO. 2 IS ACCORDINGLY DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 7 TH JULY, 2014 . +$8 5 - *$ 9 :+; 07.07.2014 5 < SD/- SD/- (D.MANMOHAN ) (N.K. BILLAIYA) !' /VICE PRESIDENT $* +, / ACCOUNTANT MEMBER MUMBAI; :+ DATED 07.07.2014 . . ./ RJ , SR. PS +$8 +$8 +$8 +$8 5 55 5 26& 26& 26& 26& =$&-6 =$&-6 =$&-6 =$&-6 / COPY OF THE ORDER FORWARDED TO : 1. .1 / THE APPELLANT 2. 23.1 / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5. &?< 26 , , / DR, ITAT, MUMBAI 6. < @ / GUARD FILE. +$8 +$8 +$8 +$8 / BY ORDER, 3&6 26 //TRUE COPY// / / / / / (DY./ASSTT. REGISTRAR)