D.C.I.T Cir - 11,kolkata, Kolkata V. M/S Nisan Developers & Properties Pvt Ltd, Kolkata

ITA 754/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4649 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 14-06-2016
• Assessment Year: misc
• Appeal Filed On: 09-04-2013
• Court: TRIBUNAL
• Department Lawyers: AMITABHA CHOWDHURY
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 148

Judgement Text

I.T.A. NO. 754/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISHWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 754 /KOL/ 2013 ASSESSMENT YEAR: 2005-2006 DEPUTY COMMISSIONER OF INCOME TAX,................. ...........................APPELLANT CIRCLE -11, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. NISSAN DEVELOPERS & PROPERTIES PVT. LIMITED,.. .....................RESPONDENT 9A, LORD SINHA ROAD, 1 ST FLOOR, KOLKATA-700 071 [PAN: AABCN 0739 N] APPEARANCES BY: SHRI AMITABHA CHOWDHURY, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI RAJEEVA KUMAR, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JUNE 14, 2016 DATE OF PRONOUNCING THE ORDER : AUGUST 10, 2016 O R D E R PER SHRI P.M. JAGTAP, A.M .: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA D ATED 18.12.2012 FOR THE ASSESSMENT YEAR 2005-06, WHEREBY HE DELETED THE ADDITION OF RS.62,16,162/- MADE TO THE TOTAL INCOME OF THE ASSE SSEE ON ACCOUNT OF ALLEGED UNACCOUNTED SALES. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND REAL ESTATE DEVELO PMENT. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 31.10.2005 DECLARING TOTAL INCOME OF RS.43,110/-. IN THE ASSES SMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 31.12.2007, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESS ING OFFICER AT I.T.A. NO. 754/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 6 RS.1,29,51,278/-. SUBSEQUENTLY, IT WAS NOTICED BY T HE ASSESSING OFFICER ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD THAT TH E AMOUNTS OF ADVANCES AGAINST FLAT AND GARAGE BOOKING AS APPEARING IN THE BALANCE-SHEET OF THE ASSESSEE AS AT 31.03.2005 HAD BEEN REDUCED TO RS.88 ,85,748/- FROM RS.1,76,45,498/- AS AT 31.03.2004. ACCORDING TO THE ASSESSING OFFICER, THIS DIFFERENCE OF RS.87,59,750/- SHOULD HAVE BEEN BOOKE D BY THE ASSESSEE AS SALE OF FLATS OF THE YEAR UNDER CONSIDERATION. SINC E THE ASSESSEE HAD RECOGNIZED THE INCOME ON ACCOUNT OF SALE OF FLATS O NLY TO THE TUNE OF RS.25,43,588/- IN THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER ENTERTAINED A BELIEF THAT THE INCOME OF THE ASSESSE E TO THE EXTENT OF RS.62,16,162/- (RS.87,59,750/- MINUS 25,43,588/-) H AS ESCAPED ASSESSMENT. HE, THEREFORE, ISSUED A NOTICE UNDER SE CTION 148 TO THE ASSESSEE, IN REPLY TO WHICH, A REQUEST WAS MADE BY THE ASSESSEE IN WRITING TO TREAT THE RETURN OF INCOME ORIGINALLY FILED AS T HE RETURN FILED IN PURSUANCE IN RESPONSE TO NOTICE UNDER SECTION 148. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE DIFFERENCE POINTED OUT BY THE ASSESSING OFFICER IN THE BOOKING OF SALES ON THE BASIS OF RED UCTION OF AMOUNT OF ADVANCES AGAINST FLAT AND GARAGE BOOKING WAS EXPLAI NED BY THE ASSESSEE BY MAKING THE FOLLOWING SUBMISSIONS:- (A) YOU ARE AWARE THAT THE ASSESSEE DEALS IN REAL ESTATE. (B) DURING THE F.Y. 04-05 THE ADVANCES WERE RECEIVE D AGAINST BOOKING OF FLATS AND/OR GARAGES FROM THE PARTIES. C) THE ASSESSEE COMPANY STARTED CONSTRUCTION BUT CO MPLETION WAS MATTER OF A LONG PERIOD OF TIME WHICH WAS VIEWED NE GATIVELY BY SOME OF THE PARTIES. D) IN COURSE OF TIME SOME OF THE PARTIES LOST INTER EST TO HAVE FLATS AND/OR GARAGES FROM THE COMPANY BEING NOT AS PER TH EIR LIKINGS/HAVING THEN NO MEANS OF ARRANGING THE NECES SARY FUNDS TO PURCHASE THE FLAT. E) THE NON-INTERESTED PARTIES APPROACHED THE COMPAN Y AND REQUESTED TO ARRANGE FOR REFUNDING THE AMOUNT OF AD VANCE SO FAR MADE. F) THE COMPANY BEING OF REPUTE STARTED TO REFUND TH E AMOUNT OF ADVANCES AS PER THE FUND AVAILABLE TO IT. ALL SUCH REFUNDS ARE REFLECTED IN THE BANK STATEMENT WHICH MAY KINDLY BE PERUSED. I.T.A. NO. 754/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 6 THE ABOVE EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE THE SAME. HE HELD THAT WHEN THERE WAS REDUCTION IN THE CURRENT LIABILITIES ON ACCOUNT OF ADVANCES RECEIVED AGAINST FLATS, THERE COULD BE NO OTHER INTERPRETATION THAN TO CONCLUDE T HAT SALE HAD TAKEN PLACE GIVING RISE TO REVENUE. HE ACCORDINGLY TREATE D THE AMOUNT OF RS.62,16,162/- AS UNACCOUNTED SALES OF THE ASSESSEE AND MADE ADDITION TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3)/147 VIDE AN ORDER DA TED 27.12.2010. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3)/147, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) DISPUTING THEREIN THE ADDITION OF RS.6 2,16,162/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNACCOU NTED SALES AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD BEFORE HIM, THE LD. CIT(APPEALS ) DELETED THE SAID ADDITION MADE BY THE ASSESSING OFFICER FOR THE FOLL OWING REASONS GIVEN IN PARAGRAPH NO. 4 OF HIS IMPUGNED ORDER:- 4. I HAVE CONSIDERED THE FINDING OF THE A.O. IN HI S ORDER DT. 27- 12-2010 AND THE WRITTEN SUBMISSION FILED BY THE A.R . DURING THE APPELLATE PROCEEDING. APPEAL ON GROUND NO. 1 IS GEN ERAL IN NATURE. APPEAL ON GROUND NO. 2, 3, 4 AND 5 ARE AGAI NST THE ADDITION OF RS.62,16,162/- AS UNDISCLOSED INCOME. T HE A.O. IN HIS ASSESSMENT ORDER HAS GIVEN THE FINDING THAT DUR ING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAD MODE SOLES ON ACCOUNT OF SALE OF FLAT TO THE TUNE OF RS.23,13,588/- AND ON A CCOUNT OF CAR PARKING OF RS.230000/- TOTALLING RS. 25,43,588/-. T HE A.O. HAS FURTHER GIVEN HIS FINDING THAT THE ASSESSEE HAS RED UCED RS.8759750/- IN HIS BOOKS OF ACCOUNTS FROM ADVANCE RECEIVED AGAINST FLAT BOOKING AND SALES OF GARAGE. THE A.O. ARRIVED AT THIS CONCLUSION THAT SINCE THE SALE OF FLAT AND GAR AGE DURING THE YEAR WAS ONLY FOR RS.25,43,588/-. THEREFORE, REMAIN ING AMOUNT OF RS.62,16,162/- I.E. (RS.87,59,750/- - RS.25,43,5 88/-) IS ASSESSEE'S UNDISCLOSED INCOME. DURING THE ASSESSMEN T PROCEEDING THE AR OF THE ASSESSEE EXPLAINED THAT TH E DIFFERENCE AMOUNT OF RS.62,16,162/-WAS BECAUSE OF REFUND OF RS.80,00,000/- TO ONE M/S. B. P. PODDER HOSPITAL AN D MEDICAL RESEARCH LTD. RECEIVED AGAINST ADVANCE FOR FLATS AN D GARAGE. THE AO ASKED THE AR TO PRODUCE DOCUMENTS RELATED TO CANCELLATION OF FLATS FOR VERIFICATION BUT THE A.R. COULD NOT SUBMIT THEM ON THE GROUND THAT IT WAS NOT READILY A VAILABLE. SINCE, THE ASSESSMENT WAS GETTING BARRED BY LIMITAT ION 31-12- I.T.A. NO. 754/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 6 2010. THEREFORE. THE A.O. PASSED THE ORDER TREATING AMOUNT OF RS.6216167/- AS UNDISCLOSED INCOME OF THE ASSESSEE. DURING THE APPELLATE PROCEEDING THE A.R. REPEATED THE SAME ARG UMENT THAT THE REDUCTION IN CURRENT LIABILITIES TO THE TUNE OF RS.6216162/- WAS BECAUSE OF THE CANCELLATION OF FLATS BY M/S. B. P. PODDAR HOSPITAL AND MEDICAL RESEARCH LTD. THE A.R. FURTHER SUBMITTED THAT THE DIFFERENCE WAS BECAUSE OF REFUND MADE TO P ARTIES OWING TO CANCELLATION OF FLATS. THE A.R. HAS ALSO S UBMITTED THAT FOR CANCELLATION OF FLATS AND IN ORDER TO MAKE REFU NDS AGAINST CANCELLATION. THE COMPANY DOES NOT PASS ANY RESOLUT ION FOR THE SAME. THEREFORE, THERE IS NO DOCUMENT CALLED BOARD' S RESOLUTION OR MINUTE BOOK FOR THE SAME. HOWEVER, LEDGER ACCOUN TS OF PARTIES, BANK STATEMENT SHOWING REFUND FOR CANCELLE D FLATS WERE PRESENTED BEFORE THE A.O. DURING THE APPELLATE PROC EEDING ALONG WITH BANK STATEMENTS SHOWING REFUND OF MONEY FOR CANCELLED FLATS, LEDGER ACCOUNTS OF THE PARTY CONCE RN A COPY OF LETTER FROM M/S. B. P. PODDAR HOSPITAL AND MEDICAL RESEARCH LTD. REQUESTING THE CANCELLATION OF FLAT AND REFUND OF ADVANCE AMOUNT PAID WAS ALSO PRODUCED. THE A.R. HAS ALSO PR ODUCED A COPY OF AGREEMENT BETWEEN THE NISSAN DEVELOPERS & P ROPERTIES PVT. LTD., AND M/S. B. P. PODDAR HOSPITAL AND MEDIC AL RESEARCH LTD. I HAVE CONSIDERED THE FINDING OF THE A.O. AND THE W RITTEN SUBMISSION FILED BY THE AR DURING THE APPELLATE PRO CEEDING. FROM THE WRITTEN SUBMISSION AND DETAILS FILED IT, C LEAR THAT THE ASSESSEE COMPANY HAD MADE REFUND FOR CANCELLATION O F FLAT TO M/S. B.P. PODDAR HOSPITAL AND MEDICAL RESEARCH LTD. IT IS CLEARLY MENTIONED IN THE LEDGER ACCOUNTS OF ADVANCE RECEIVED FOR FLAT BOOKING/CANCELLATION AND THE REFUND FOR TH E SAME IS REFLECTED IN THE DETAILS OF BANK ACCOUNTS OF THE AS SESSEE. THUS, IT IS CLEAR THAT THE DIFERENTIAL OF CURRENT LIABILI TY OF RS. 6216162/- IS NOTHING BUT REFUND MADE AGAINST CANCEL LATION OF FLATS TO M/S. B. P. PODDAR HOSPITAL AND MEDICAL RES EARCH LTD. HENCE, ASSESSEE'S APPEAL ON GROUNDS NO. 2, 3, 4 AND 5 ARE ALLOWED. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS POINTED O UT BY THE LD. D.R. FROM THE RELEVANT PORTION OF THE IMPUGNED ORDER OF THE L D. CIT(APPEALS), VARIOUS DETAILS AND DOCUMENTS WERE FILED BY THE ASS ESSEE IN SUPPORT OF ITS CASE ON THE ISSUE FOR THE FIRST TIME BEFORE THE LD. CIT(APPEALS) AND THE SAME CONSTITUTING ADDITIONAL EVIDENCE WAS RELIED UP ON BY THE LD. CIT(APPEALS) TO GIVE RELIEF TO THE ASSESSEE WITHOUT GIVING ANY OPPORTUNITY I.T.A. NO. 754/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 5 OF 6 TO THE ASSESSING OFFICER TO VERIFY THE SAME, WHICH IS IN CLEAR VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962. ALTHOUGH TH E LD. COUNSEL FOR THE ASSESSEE HAS NOT DISPUTED THIS POSITION, HE HAS CON TENDED THAT THE LD. CIT(APPEALS) HIMSELF HAS VERIFIED THE DETAILS AND D OCUMENTS FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE HIM AND AFTER HA VING SATISFIED WITH THE SAME, HAS ALLOWED RELIEF TO THE ASSESSEE. 5. AS PER SPECIFICALLY PROVIDED IN SUB-RULE 3 OF RU LE 46A OF THE INCOME TAX RULES, 1962, LD. CIT(APPEALS) SHALL NOT TAKE IN TO ACCOUNT ANY ADDITIONAL EVIDENCE PRODUCED BY THE ASSESESE UNDER SUB-RULE 1 UNLESS THE ASSESSING OFFICER HAS BEEN ALLOWED A REASONABLE OPP ORTUNITY TO EXAMINE THE SAME. WE, THEREFORE, FIND MERIT IN THE CONTENTI ON OF THE LD. D.R. THAT THE RELIEF GIVEN BY THE LD. CIT(APPEALS) TO THE ASS ESSEE ON THE ISSUE INVOLVED IN THIS APPEAL IS IN CLEAR VIOLATION OF RU LE 46A(3). WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS ) GIVING RELIEF TO THE ASSESSEE ON THE ISSUE UNDER CONSIDERATION AND RESTO RE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER EXAMINING/VERIFYING THE DETAILS AND DOCUMENTS FURNI SHED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LD. CIT(APPEALS). NEE DLESS TO OBSERVE THAT THE ASSESSING OFFICER SHALL AFFORD PROPER AND SUFFICIEN T OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 10, 20 16. SD/- SD/- (S.S. VISHWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT ME MBER KOLKATA, THE 10 TH DAY OF AUGUST, 2016 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -11, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 I.T.A. NO. 754/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 6 OF 6 (2) M/S. NISSAN DEVELOPERS & PROPERTIES PVT. LIMI TED, 9A, LORD SINHA ROAD, 1 ST FLOOR, KOLKATA-700 071 (3) COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLK ATA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.