The ITO, Ward-8(1), Ahmedabad V. Sarthak Organisers Pvt,Ltd., Ahmedabad

ITA 740/AHD/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9727 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: SHALEEN PATNI AR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ./ ././ ./ ITA NO. 740/AHD/2012 / ASSESSMENT YEAR: 2008-09 ITO, WARD-8(1), AHMEDABAD VS. SARTHAK ORGANISERS PVT LTD 46, HIGHWAY PARK SOCIETY, SABARMATI, AHMEDABAD PAN : AAACG 5494 P / // / (APPELLANT) / // / (RESPONDENT) REVENUE BY : SHRI NARENDRA SINGH, SR. DR ASSESSEE(S) BY : SHRI SHALEEN PATNI, AR !' # $%&/ // / DATE OF HEARING : 14/07/2015 '( # $%& / // / DATE OF PRONOUNCEMENT: 17/07/2015 )* )* )* )*/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIREC TED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-XIV, AHMEDABAD DATED 27.01.2012, PERTAINING TO ASSESSMENT YEAR 200 8-09. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE REV ENUE READS AS UNDER:- THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, A HMEDABAD ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.20, 97,079/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSION OF SALE OF 2 RESIDENTIAL BUNGALOWS. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. THE ASSESSING OFFICER HAS MADE THE ADDIT ION OF RS.20,97,079/- ON ITA NO. 740/AHD/2012 ITO VS. SARTHAK ORGANISERS PVT LTD FOR AY 2008-09 2 THE GROUND THAT THE ASSESSEE HAS NOT DISCLOSED THE ENTIRE SALE CONSIDERATION OF TWO BUNGALOWS WHICH WERE SOLD DURING THE YEAR UN DER CONSIDERATION. WE FIND THAT THE CIT(A) HAS DISCUSSED THE ISSUE AT LENGTH AND DELETED THE ADDITION WITH THE FOLLOWING FINDINGS:- 2.3 DECISION: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND T HE SUBMISSIONS GIVEN BY THE APPELLANT. IF IS OBSERVED FROM THE DET AILS FILED BY THE APPELLANT THAT THE TOTAL ESTIMATED CONSTRUCTION COST, SALE CO NSIDERATION AND OTHER DETAILS IN RESPECT OF THE TWO BLOCKS FOR WHICH AGREEMENT OF SALE HAS BEEN SIGNED DURING THE YEAR ARE AS UNDER: PARTICULARS PARTICULARS BLOCK NO.1 BLOCK NO.10 TOTAL ESTIMATED CONSTRUCTION COST 1833390 2095558 LESS: CONSTRUCTION COST UPTO 972535 859334 31.03.2008 REMAINING COST TO BE INCURRED 860855 1236224 NEXT YEAR SALE CONSIDERATION 3500000 3700000 SALE BOOKED IN F.Y.2007-08 2639145 2463776 THE ABOVE DETAILS SHOW THAT THE APPELLANT HAS NOT B OOKED THE ENTIRE SALE CONSIDERATION DURING THE YEAR AND HAS TAKEN TH E SALE CONSIDERATION WHICH IS EQUAL TO THE REMAINING EXPENSES TO BE INCURRED O N THOSE BLOCKS TO NEXT YEAR. THE A.O. HAS OBJECTED TO THE ABOVE METHOD OF ACCOUNTING AND TAKEN THE TOTAL SALE CONSIDERATION IN THE CURRENT YEAR AS INC OME. IN MY OPINION, THE A. O. WAS NOT JUSTIFIED IN DOING SO. THE APPELLANT HAS BOOKED ALMOST ALL THE PROFIT IN THE CURRENT YEAR AND HAS ONLY POSTPONED T HE BOOKING OF REVENUE ONLY EQUAL TO THE ESTIMATED EXPENSES WHICH WERE TO BE IN CURRED ON THE UNITS. THE ESTIMATION OF EXPENDITURE WHICH REMAINED TO BE INCU RRED HAS ALSO BEEN DONE ON A SCIENTIFIC BASIS. THE APPELLANT HAS IN THE NEX T YEAR SHOWN THE REMAINING REVENUE AND ALSO SHOWN THE PROFIT IN RESPECT OF ONE UNIT AND SOME LOSS IN RESPECT OF THE OTHER. THE OBSERVATION OF THE A. O. THAT THE SALE AGREEMENT AND THE STATEMENT OF THE VALUER SHOW THAT BUNGALOW NO. 1 & 10 WERE COMPLETED IS NOT FULLY JUSTIFIABLE AS THE AGREEMENT ITSELF SH OW THAT SOME WORK RELATED TO THOSE BLOCKS WERE STILL PENDING. THE OBSERVATION OF THE A, O. REGARDING FIGURES OF SALE MENTIONED IN THE RETURN FOR A. Y. 2 009-10 HAS ALSO BEEN EXPLAINED BY THE APPELLANT AND IT HAS BEEN SUBMITTE D THAT THE FIGURES WERE INADVERTENTLY MENTIONED WHILE FILING THE RETURN ONL INE. THE FIGURE OF ITA NO. 740/AHD/2012 ITO VS. SARTHAK ORGANISERS PVT LTD FOR AY 2008-09 3 RS.5,47,331/- WAS IN FACT PROFIT FROM ONE UNIT AND THE FIGURE OF RS.3,71,174/- WHICH WAS SHOWN AS PURCHASE WAS IN FACT LOSS FROM T HE OTHER UNIT. IT IS FURTHER OBSERVED THAT THE APPELLANT HAS CONSI STENTLY OBSERVED THE SAME POLICY AND HE HAS BOOKED THE REVENUE IN ACCORD ANCE WITH THE WORK THAT HAS BEEN COMPLETED. IN FACT THE CHART WHICH IS REPR ODUCED IN THE PRECEDING PARAGRAPH CLEARLY SHOW THAT THE APPELLANT HAS BOOKE D MORE REVENUE IN THE CURRENT YEAR AND HAS CARRIED FORWARD THE REVENUE TH AT WERE EQUAL TO THE ESTIMATED COST REMAINING TO BE INCURRED TO THE NEXT YEAR. THE ACCOUNTING POLICY ADOPTED BY THE APPELLANT IS ALSO IN CONFORMI TY WITH THE ACCOUNTING STANDARDS PRESCRIBED BY ICAI. THE APPELLANT HAS ALSO CITED CERTAIN CASE LAWS IN W HICH IT HAS BEEN HELD THAT IN CASE THE INCOME IS TO BE TAXED AT UNIFORM R ATE, NO MOTIVE CAN BE ATTACHED IN SHIFTING THE REVENUE FROM ONE YEAR TO T HE OTHER. THE YEAR OF TAXABILITY IS NOT MATERIAL. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, I AM OF THE CONSIDERED OPINION THAT THE METHOD OF ACCOUNTING ADOPTED BY TH E APPELLANT WAS CORRECT AND A.O. WAS NOT JUSTIFIED IN TAKING THE TOTAL SALE CONSIDERATION TO THE PRESENT ASSESSMENT YEAR. THE ADDITION MADE BY HIM I S ACCORDINGLY DIRECTED TO BE DELETED. THE GROUND OF APPEAL IS, THEREFORE, ALL OWED. 4. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ABOVE FIN DING OF THE CIT(A). IT IS TRUE THAT THE ASSESSEE DID NOT DISCLOSE THE ENTIRE SALE CONSIDERATION, BUT AT THE SAME TIME, THE CONSTRUCTION OF THOSE BUNGALOWS WERE NOT COMPLETED AND THE ASSESSEE WAS SUPPOSE TO INCUR THE EXPENDITURE T O COMPLETE THE REMAINING WORK. THE DIFFERENCE BETWEEN THE TOTAL SA LE CONSIDERATION AND THE SALE CONSIDERATION DISCLOSED IN THE YEAR UNDER CONS IDERATION WAS ALMOST EQUIVALENT TO REMAINING COST WHICH WAS TO BE INCURR ED IN THE NEXT YEAR. IT IS ALSO NOT IN DISPUTE THAT IN THE NEXT YEAR THE ASSES SEE HAS DISCLOSED THE REMAINING SALE CONSIDERATION AS WELL AS ALSO CLAIME D THE EXPENDITURE INCURRED BY IT IN COMPLETING THE REMAINING CONSTRUC TION. IT IS ALSO NOTED BY THE CIT(A) THAT IN THE NEXT YEAR THERE WA S ACTUALLY LOSS IN RESPECT OF ONE BUNGALOW AND PROFIT IN RESPECT OF ANOTHER BU NGALOW WHICH IS ITA NO. 740/AHD/2012 ITO VS. SARTHAK ORGANISERS PVT LTD FOR AY 2008-09 4 DISCLOSED BY THE ASSESSEE AND ASSESSMENTS WERE COMP LETED ACCORDINGLY. IN VIEW OF THESE FACTUAL POSITION WHICH IS NOT IN DISP UTE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CI T(A) WHICH IS SUSTAINED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 17 TH JULY, 2015 AT AHMEDABAD. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 17/07/2015 BIJU T., PS )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ !- / CONCERNED CIT 4. !- ( ) / THE CIT(A) 5. +01 $ , , / DR, ITAT, AHMEDABAD 6. 13 4' / GUARD FILE . )*! )*! )*! )*! / BY ORDER, TRUE COPY 5 55 5/ // / 6 6 6 6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD