DOLPHIN SPACES PVT LTD., MUMBAI V. ITO WARD 15 (1)94), MUMBAI

ITA 7392/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3636 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 03-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDAR SINGH
• Keywords: Principle of natural justice
• Section: 143(3); 142(1); 143(1); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 7392/MUM/2019 (A.Y: 2014-15) DOLPHIN SPACES PVT LTD H-102, NERUL STATION COMPLEX, NERUL WEST, NAVI MUMBAI 400706. VS. ITO WARD 15(1)(4) 15B GROUND FLOOR, AAYAKAR BHAVAN MK ROAD, MUMBAI 400020. PAN/GIR NO. : AAECD0543L APPELLANT .. RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI GURBINDAR SINGH, DR DATE OF HEARING 1 2 .0 5 .2021 DATE OF PRONOUNCEMENT 18 .0 5 .2021 / O R D E R PER PAVAN KUMAR GADALE, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -24 MUM BAI, PASSED U/S. 143(3) AND 250 OF THE INCOME TAX ACT, 1 961. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACT S OF THE CASE IN DISMISSING THE APPEAL IN LIMINE RELYING ON THE DECISION OF THE HONBLE ITAT DELHI BENCH IN THE CASE OF MULT IPLAN IND P LTD. ITA NO. 7392/MUM/2019 DOLPHIN SPACES PVT LTD, MUMBAI - 2 - 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACT S OF THE CASE IN NOT DISCUSSING THE MERITS OF THE CASE AND N OT PASSING A SPEAKING ORDER. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACT S OF THE CASE IN NOT ACCEPTING THE FACT THAT THE ASSESSEE IS A BUILDER AND THE INCOME WAS TO BE DECLARED AS PER PROJECT CO MPLETION METHOD INSTEAD TAXING THE INCOME ON THE BASIS OF PE RCENTAGE COMPLETION METHOD. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND REDEVELOPMENT OF BUILDINGS, COMMERCIAL COMPLEX, PLO TS AND FILED THE RETURN OF INCOME FOR THE A.Y 2014-15 ON 30.09.2014 DECLARING A TOTAL INCOME OF RS.5,94,320/ -, AND THE RETURN OF INCOME WAS PROCESSED U/S 143(1) O F THE ACT. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTI NY UNDER THE CASS, AND NOTICE U/S 143(2) AND 142(1) OF THE ACT ARE ISSUED. IN COMPLIANCE, THE LD. AR OF THE A SSESSEE APPEARED FROM TIME TO TIME AND THE CASE WAS DISCUSS ED. THE A.O FOUND THAT THE ASSESSEE COMPANY IS FOLLOWIN G THE PROJECT COMPLETION METHOD AND HAS DISCLOSED WORK IN PROGRESS AND ALSO ADDITIONS DURING THE YEAR. THE ASSESSEE HAS SUBMITTED THE DETAILS FOLLOWING THE PR OJECT COMPLETION METHOD SUPPORTING THE INCOME. BUT THE AO WAS NOT SATISFIED WITH THE EXPLANATIONS AS THE ASSE SSEE COMPANY HAS NOT FOLLOWED THE ACCOUNTING STANDARDS A S-7 & AS-9 AND RECALCULATED THE PROFITS CONSIDERING THE BUILDUP AREA, COST OF LAND, WORK IN PROGRESS AND FI NALLY ITA NO. 7392/MUM/2019 DOLPHIN SPACES PVT LTD, MUMBAI - 3 - ESTIMATED THE PROFIT ON CONSTRUCTION ACTIVITIES WHI CH WORKS OUT TO RS. 99,08,497/- AND ASSESSED THE TOTAL INCOME OF RS.1,05,02,820/- AND PASSED THE ORDER U/S 143(3) OF THE ACT DATED 27.12.2016. 3. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED A N APPEAL WITH THE CIT(A). WHEREAS, THE CIT(A) HAS IS SUED NOTICES ON VARIOUS DATES IN RESPECT OF POSTING/HEAR ING OF THE CASE BUT THERE WAS NO RESPONSE AND THE CIT(A) DISMISSED IN LIMINE THE ASSESSEE APPEAL EX-PARTE. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE HAS FIL ED AN APPEAL WITH THE HONBLE TRIBUNAL. 4.AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE LD. DR SUPPORTED THE ORDER OF THE CIT(A).WE HEARD THE LD. DR SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA-FACIE THE CIT(A) HAS PAS SED THE EX-PARTE ORDER CONSIDERING THE FACT THAT THERE IS N O APPEARANCE IN SPITE OF PROVIDING ADEQUATE OPPORTUNI TY OF HEARING AND NOTICES WERE ALSO ISSUED. THEREFORE, TH E CIT(A) WAS OF THE OPINION THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL AND DISMISSED THE APPEAL EX-PARTE WITHOUT GOING INTO THE MERITS OF TH E CASE. WE ON PERUSAL OF THE CIT(A) FOUND THAT THE LD.CIT(A ) HAS ISSUED THE NOTICE OF HEARING, BUT THERE WAS NO RESP ONSE AND THUS THE LD.CIT(A) CAME TO A CONCLUSION THAT TH E ITA NO. 7392/MUM/2019 DOLPHIN SPACES PVT LTD, MUMBAI - 4 - ASSESSEE IS NOT INCLINED TO PROSECUTE THE APPEAL. W E FIND THAT THE ASSESSEE COMPANY HAS RAISED GROUNDS OF APP EAL CHALLENGING ADDITIONS OF THE A.O. DUE TO CHANGE IN ACCOUNTING POLICIES. AND THERE COULD BE VARIOUS REA SONS FOR NONE APPEARANCE WHICH CANNOT BE OVERRULED. WE CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE SHALL PROVIDE ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE TO SUBSTANTIATE ITS CASE BEFORE THE CIT(A) ALONG WITH EVIDENCES AND INFORMATION. ACCORDINGLY, WE SET ASID E THE ORDER OF THE CIT(A) AND REMIT THE ENTIRE DISPUTED I SSUES TO THE FILE OF THE CIT(A) TO ADJUDICATE AFRESH AND THE ASSESSEE SHOULD COOPERATE IN SUBMITTING THE INFORMATION FO R EARLY DISPOSAL OF THE APPEAL AND ALLOW THE GROUNDS OF APP EAL OF THE ASSESSEE STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.05.2021 SD/- SD/- ( S RIFAUR RAHMAN ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 18.05.2021 KRK, PS ITA NO. 7392/MUM/2019 DOLPHIN SPACES PVT LTD, MUMBAI - 5 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. !!' , $ % , / DR, ITAT, MUMBAI 6. () * + / GUARD FILE. / BY ORDER, ! //TRUE COPY// 1. ( ASST. REGISTRAR) ITAT, MUMBA I