ITO, Jaipur V. RANKA COLONIZERS PVT. LTD., Jaipur

ITA 787/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9679 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 31-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: VIJAY GOYAL C A DHK
• Keywords: Opportunity of being heard; Rule of consistency
• Section: 37(1); 37; 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JHEKRH FNOK LG ] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SMT. DIVA SINGH, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 787/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 INCOME TAX OFFICER, WARD-1(2), JAIPUR. CUKE VS. M/S RANKA COLONIZERS PVT. LTD., 939-940, RANKA MANSION, SBBJ STREET, CHAURA RASTA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACR 8260 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15/03/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/03/2017 VKNS'K@ ORDER PER: DIVA SINGH, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 16/06/2016 OF LD. CIT(A)-4, JAIPU R PERTAINING TO ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUND:- 1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 62,67,610/- MADE BY THE A.O. BY DISALLOWING THE UNASCERTAINED LIABIL ITY TOWARDS THE PROVISION MADE FOR DEVELOPMENT EXPENSES. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE. THE SUBJECT MATTER OF DISPUTE IN THE PRESENT PROCEEDINGS IS THAT THE ASSESSEE DEBITE D TO ITS P&L ACCOUNT UNDER THE HEAD DEVELOPMENT EXPENSES A SUM OF RS. 62,67,210/ -. THE ASSESSING OFFICER ITA 787/JP/2016_ ITO VS M/S RANKA COLONIZERS P LTD. 2 REQUIRED THE ASSESSEE TO EXPLAIN THE SAME. THE RECOR D SHOWS THAT THE ASSESSEE AS PER REPLY DATED 11/12/2013, WHICH HAS BEEN EXTRACTED BY THE ASSESSING OFFICER IN HIS ORDER, HAD OFFERED THE FOLLOWING JUSTIFICATION: THE DEVELOPMENT EXPENSES OF RS. 6267210/- DEBITED I N P&L ACCOUNT CONSIST THE PROVISION FOR DEVELOPMENT MADE ON ARE SOLD DURI NG THE YEAR @ RS. 500/- PER SQ. YARDS IN THE SCHEME OF ASSESSEE NAMING 'SAC HIVALAYA ENCLAVE'. THE ACTUAL DEVELOPMENT EXPENSES INCURRED DURING THE YEA R ARE BEING DEBITED IN THE A/C NAMING 'PROVISION FOR DEVELOPMENT EXPENSES'. TH E COPY OF SUCH LEDGER A/C CONSISTING THE DETAIL OF NATURE OF EXPENSES INCURRE D DURING THE YEAR IS ENCLOSED HEREWITH. AS REGARDING JUSTIFICATION OF PROVISIONS FOR DEVELOPMENT EXPENSES WE SUBMIT THAT AS PER THE NORMS OF JDA FOR PRIVATE TOW NSHIP, THE DEVELOPER HAS TO INCUR SEVERAL EXPENSES ON THE DEVELOPMENT OF THE SC HEME SUCH AS EXPENSES ON INTERNAL ROADS, ELECTRIFICATION, WATER SUPPLY AND D EVELOPMENT OF PUBLIC PARKS AND FACILITIES ETC. THE COST OF THESE EXPENSES IS I NCLUDED IN THE SALE PRICE OF THE PLOT AND SEPARATE CHARGES AGAINST THE DEVELOPMENT E XPENSES TO BE INCURRED BY THE DEVELOPER IS NOT BEING CHARGED IN ADDITION TO T HE SALE PRICE OF THE PLOT TAKEN BY THE DEVELOPER. THE DEVELOPMENT WORK HAS TO BE CARRIED OUT AS PER THE SPECIFICATION OF THE JDA. THE SALES OF THE ASSESSEE REPRESENTS TO TWO THINGS, FIRST COST OF LAND AND SECOND COST OF DEVELOPMENT E XPENSES. SINCE THE COST OF THE DEVELOPMENT EXPENSES IS TO BE INCURRED IN THE N EXT YEARS, THEREFORE, THE SALES TO THE EXTENT OF THE COST OF DEVELOPMENT EXPE NSES IS CARRIED FORWARDED FOR NEXT YEARS UNDER THE NOMENCLATURE 'PROVISION AG AINST THE DEVELOPMENT EXPENSES. IT IS RELEVANT TO MENTION HERE THAT THE D EVELOPMENT EXPENSES ARE ESTIMATED ONLY IN RESPECT OF THE PLOTS SOLD DURING THE YEAR, NOT ON WHOLE LAND AND SUCH AMOUNT IS CARRIED FORWARDED. THUS, THE SAL E PROCEED RECEIVED BY THE ASSESSEE AGAINST THE PLOTS IS SUBJECT TO THE LIABIL ITY OF DEVELOPMENT WORK TO BE DONE BY THE ASSESSEE. THE LIABILITY TO INCUR THE DE VELOPMENT EXPENSES HAS ARISEN IN THE YEAR OF THE SALE OF THE PLOT. THE SAI D LIABILITY OUGHT TO HAVE BEEN DEDUCTED FROM THE AMOUNT OF INCOME ACCRUED IN ORDER TO ARRIVE THE TRUE AND FAIR PROFITS OF A BUSINESS OR PROFESSION, THEREFORE THE ESTIMATION OF FURTHER COST OF DEVELOPMENT NOMENCLATURE IN BOOKS OF ACCOUNT AS ' PROVISION AGAINST DEVELOPMENT EXPENSES' ARE ALLOWABLE EXPENSES U/S 37 OF THE INCOME TAX ACT READ WITH SECTION 28 OF INCOME TAX ACT. THE DEVELOP MENT WORK HAS TO BE CARRIED OUT AS PER THE SPECIFICATION OF THE JDA. 2.1 HOWEVER, NOT CONVINCED WITH THE EXPLANATIONS OFFE RED HE REJECTED THE SAME AND HELD THAT SINCE NO EXPENDITURE WAS ACTUALLY INCU RRED AND THE AMOUNT WAS ONLY IN THE FORM OF A PROVISION, HE ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). RELIANCE WAS PLACED ON VARI OUS DECISIONS OF THE ITAT INCLUDING THE FOLLOWING DECISIONS OF THE HON'BLE SUP REME COURT NAMELY ROTORK ITA 787/JP/2016_ ITO VS M/S RANKA COLONIZERS P LTD. 3 CONTROLS INDIA (P) LTD. VS CIT (2009) 314 ITR 62 (SC) FOR THE PROPORTION THAT ANY PROVISION MADE FOR THE OBLIGATION OF EXPENSES TO BE INCURRED IN FUTURE AGAINST THE CURRENT YEARS SALE IS ALLOWABLE EXPENSES. RELIANCE WAS ALSO PLACED ON THE DECISION OF HON'BLE SUPREME COURT NAMELY BHARAT EARTH MOVERS VS. CIT (2009) 245 ITR 428 (SC) FOR THE PROPOSITION THAT IF THE BUS INESS LIABILITY HAS ARISEN IN THE ACCOUNTING YEAR THEN DEDUCTION SHOULD BE ALLOWED ALT HOUGH LIABILITY MAY HAVE TO BE QUANTIFIED AND DISCHARGED AT A FUTURE DATE. RELIANCE WAS ALSO PLACED IN THE DECISIONS OF DIFFERENT HON'BLE HIGH COURTS NAMELY U DAIPUR MINERAL DEVELOPMENT SYNDICATE (P) LTD. VS. DY.CIT (2003) 181 CTR 251 (RAJ ); CIT VS DEVELOPMENT TRUST (P) LTD. (1991) 99 CTR (ALL) 247 AND WELDING RO DS MFG. CO. VS. CIT (1997) 137 CTR (GUJ) 569. 3.1 CONSIDERING THE SUBMISSIONS, THE LD. CIT(A) GRAN TED RELIEF HOLDING AS UNDER:- 3.1.3 I HAVE DULY CONSIDERED ASSESSEE'S SUBMISSION AND CA REFULLY GONE THROUGH ASSESSMENT ORDER. I HAVE ALSO TAKEN A NOTE OF FACTUAL MATRIX O F THE CASE AS WELL AS APPLICABLE CASE LAWS RELIED UPON. ON PERUSAL OF ASSESSMENT ORDER, I T IS SEEN THAT AO AT PAGE 2 TO 4 OF THE ASSESSMENT ORDER HAS HELD THAT DURING THE YEAR A SUM OF RS. 62,67,210/- HAD BEEN DEBITED TO THE P&L ACCOUNT UNDER THE DEVELOPMENT E XPENSES WHEN ASKED TO FURNISH THE COMPLETE DETAILS AND EVIDENCES IN SUPPORT OF TH E INCURRING OF SUCH EXPENDITURE, THE ASSESSEE REVEALED THAT THE SAID EXPENDITURE HAD NOT BEEN ACTUALLY INCURRED BUT WAS DEBITED TO THE P&L ACCOUNT IN THE FORM OF PROVISION S FOR SUCH EXPENSES TO BE INCURRED IN FUTURE. FINALLY, AO MADE ADDITION OF RS. 62,67,2 10/- IN TOTAL INCOME OF THE ASSESSEE BY DISALLOWING PROVISION MADE FOR DEVELOPMENT EXPE NSES. THE ASSESSEES CONTENTION IS THAT THE PROVISIONS FOR DEVELOPMENT EXPENSES ARE AL LOWABLE U/S 37 R.W.S. 28 OF THE ACT AND THIS CLAIM IS COVERED BY FOLLOWING DECISIONS: *CALCUTTA CO LTD 37 ITR 1 (SC) * THE GREEN TRIVEINI DEVELOPER ITA NO 291 /JP/201 4 ITAT JAIPUR * M/S SHREE SALASAR OVERSEAS (PVT) LTD ITAT JAIPU R * RAM CHANDRA AGRAWAL ITAT JAIPUR FURTHER, IT IS ALSO SUBMITTED THAT AO HAS FAILED T O APPRECIATE THE PROVISIONS OF INCOME TAX ACT BECAUSE THERE IS NO BAR IN SECTION 37(1) OF ACT TO ALLOW THE PROVISIONS MADE AGAINST CERTAIN EXPENSES/LIABILITY. FOR THE SAKE OF CLARITY, PROVISIONS OF SECTION 37(1) OF INCOME TAX ACT, 1961 ARE READ AS UNDER: - 'ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATU RE DESCRIBED IN SECTIONS 30 TO 36[* * *] AND NOT BEING IN THE NATURE OF CAPITAL EX PENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND E XCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMP UTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PR OFESSION'. ITA 787/JP/2016_ ITO VS M/S RANKA COLONIZERS P LTD. 4 [EXPLANATION : FOR THE REMOVAL OF DOUBTS, IT IS HE REBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BE EN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANC E SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE.'] ON CAREFUL READING OF ABOVE SECTION, THE EXPENSES L AID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON SHALL BE ALLOWED. THE ABOVE SECTION DOES NOT RESTRICT THAT THE FUTURE LIABILITY TO INCURRED EXPENSES WILL NOT BE ALLOWED IN THE RELEVANT YEAR IN WHICH THE LIABILITY AROSE. HERE IT IS PERTINENT TO MENTION THAT HONBLE APEX COURT IN THE CASE OF ROTO RK CONTROLS INDIA (P) LTD VS CIT (2009) 314 ITR 62 (SC) HAS LAID DOWN THE PRINCIPLE THAT ANY PROVISION MADE FOR THE OBLIGATION OF EXPENSES TO BE INCURRED IN FUTURE AGA INST THE CURRENT YEAR'S SALE IS ALLOWABLE EXPENSES. FURTHER HONBLE APEX COURT IN T HE CASE OF BHARAT EARTH MOVERS VS. CIT (2000) 245 ITR 428 (SC) HAS HELD THAT IF TH E-BUSINESS LIABILITY HAS ARISEN IN THE ACCOUNTING YEAR THEN DEDUCTION SHOULD BE ALLOWED AL THOUGH LIABILITY MAY HAVE TO BE QUANTIFIED AND DISCHARGED AT A FUTURE DATE. HON'BLE JURISDICTIONAL RAJASTHAN HIGH COURT IN THE CASE OF UDAIPUR MINERAL DEVELOPMENT SY NDICATE (P) LTD. VS. DY. CIT (2003) 1Q1 CTR (RAJ) 251: (2003) 261 ITR 706 (RAJ) HAD AN OCCASION TO CONSIDER THE ACCRUAL OF LIABILITY. IT IS FURTHER SUBMITTED THAT THE ASSESSEE HAS SHOW N FULFILLMENT OF THREE ELEMENTS (I) REASONABLENESS OF THE PROVISION (II) HONESTY OF PRO VISIONING OF EXPENSES (III) A FAIR BASIS/ESTIMATION OF EXPENSES FOR MAKING PROVISIONS. IT IS ALSO A FACT THAT THE AO HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT THE PROVISION MADE BY THE ASSESSEE IS EXCESSIVE. FURTHER, AO HAS EXAMINED THE BOOKS OF ACCOUNT BUT B OOKS OF ACCOUNT WERE NOT REJECTED BY HIM. IT IS SUBMITTED THAT THE ASSESSEE HAS FILED COMPLETE DETAILS OF ACTUAL EXPENSES AND THE AO HAS VERIFIED THE SAME WITH VOUC HERS AND NO DEFICIENCY HAS BEEN POINTED OUT BY HIM. THE PROVISION FOR THE DEVELOPME NT EXPENSES WERE MADE AT THE SAME RATE WHICH WAS APPLIED BY THE ASSESSEE IN PREV IOUS YEAR. THEREFORE, IN VIEW OF FACTS AND CIRCUMSTANCES OF T HE CASE AS WELL AS RESPECTFULLY FOLLOWING ABOVE CASE LAWS, ADDITION OF RS. 62,67,21 0/- MADE BY THE AO IN TOTAL INCOME OF THE ASSESSEE BY DISALLOWING PROVISION MADE FOR DEVELOPMENT EXPENSES IS HEREBY DELETED. ASSESSEES APPEAL STANDS ALLOWED. 4. AGGRIEVED BY THE ORDER, THE REVENUE IS IN APPEAL BEFORE THE ITAT. 5. THE LD. SR.DR RELYING UPON THE ASSESSMENT ORDER S UBMITTED THAT NO EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE AND THE CIT(A) WITHOUT ASSIGNING ANY REASON HAS GRANTED RELIEF. IT WAS SUBMITTED THAT THE COORDINATE BENCH ON AN EARLIER DATE HAD DIRECTED THE ASSESSEE TO FILE THE APPROVAL OF JDA IN REGARD TO THE JDAS CONVERSION SCHEME ETC. AS WITHOUT CONSIDERING THE FACTS RELIEF HAS BEEN GRANTED BY THE CIT(A). ITA 787/JP/2016_ ITO VS M/S RANKA COLONIZERS P LTD. 5 6. THE LD. AR IN REPLY SUBMITTED THAT IN TERMS OF TH E DIRECTION OF THE BENCH, THE RELEVANT DETAILS HAVE BEEN FILED, IT WAS ALSO H IS SUBMISSION THAT THE ASSESSEE HAS GIVEN REASONS BEFORE THE LD. CIT(A) AND CONSIDER ING THE SAME, RELIEF HAD BEEN GRANTED. SINCE REFERENCE TO THE REASONS AND FACTS I S NOT FOUND MENTIONED IN THE FINDING OF THE CIT(A), THE LD. AR SUBMITTED THAT LAC K OF DISCUSSION BY THE CIT(A) WAS NOT IN THE HANDS OF THE ASSESSEE. ATTENTION WAS I NVITED TO PAPER BOOK PAGE NOS. 181 TO 191, WHICH, IT WAS SUBMITTED, HAD ALSO B EEN FILED BEFORE THE LD. CIT(A) AND IN FACT IS COPY OF THE WRITTEN SUBMISSIONS DATED 08/8/2016 FILED BEFORE THE LD. CIT(A). INVITING SPECIFIC ATTENTION TO PAGE 185 OF THE SAME, IT WAS SUBMITTED THAT THE ASSESSEE HAD SUBMITTED THAT IN T HE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD INCURRED EXPENSES TO THE TUNE OF R S. 19,70,524/- TOWARDS DEVELOPMENT OF EXPENSES AND THE SAME WERE DEBITED IN THE ACCOUNT NAMED PROVISION FOR DEVELOPMENT EXPENSES. THE FOLLOWING E XTRACT OF THE WRITTEN SUBMISSIONS WAS HEAVILY RELIED UPON IN SUPPORT OF IT S CLAIM:- THE JDA ORDER NO D-1694 DATED 01/12/2005, WHICH CLE ARLY DEMONSTRATES THAT THE DEVELOPER HAS TO CARRY OUT INTERNAL DEVELOPMENT OF THE SCHEME AND THIS INTERNAL DEVELOPMENT CAN EITHER BE CARRIED OUT THROUGH JDA O R BY THE DEVELOPER HIMSELF. IN CASE THE DEVELOPMENT WORK IS NOT CARRIED OUT BY THE DEVE LOPER, HE HAS TO KEEP 12.5% OF PLOTS WITH JDA AS SECURITY AND THESE PLOTS WILL BE RELEASED ONLY AFTER THE COMPLETION OF THE WORK. THEREFORE, THERE IS ASCERTAINED LIABILITY OF ASSESSEE AGAINST THE DEVELOPMENT WORK TO BE CARRIED OUT BY IT AND THERE IS INBUILT S YSTEM IN JDA WHICH ABIDE THE DEVELOPER TO CARRY OUT THE DEVELOPMENT WORK IN ACCORDANCE WIT H THE SPECIFICATION LAID DOWN BY THE JDA. THE SALES TO PLOTS HOLDERS BY ASSESSEE CONSISTS THE SALES MADE BY THE ASSESSEE IN PRIVATE KHATADER SCHEME AND THE PRIVATE KHATEDAR SC HEME IS GOVERNED AS PER RULES AND REGULATIONS OF RAJASTHAN LAND REVENUE ACT AND JDA. THE ASSESSEE PURCHASES THE AGRICULTURE LAND AND THEREAFTER IT APPLIES TO JDA F OR CONVERSION OF LAND FOR RESIDENTIAL AND COMMERCIAL PURPOSE AS PER THE PROVISION OF RAJASTHA N LAND REVENUE ACT AND JAIPUR DEVELOPMENT AUTHORITY. THE ASSESSEE DIVIDES THE LAND IN PLOTS OF VARIOUS S IZES AND CARRIES DEVELOPMENT ACTIVITIES LIKE CONSTRUCTION OF ROAD, LYING OF WATER SUPPLY LI NES, ELECTRICITY FACILITY WIRING, CONSTRUCTION OF OVERHEAD TANKS ETC. AS PER THE NORMS OF JDA FOR PRIVATE TOWNSHIP, THE D EVELOPER HAS TO INCUR SEVERAL EXPENSES ON THE DEVELOPMENT OF THE SCHEME SUCH AS E XPENSES ON INTERNAL ROADS, ELECTRIFICATION, WATER SUPPLY AND DEVELOPMENT OF PU BLIC PARKS AND FACILITIES ETC. THE COST OF THESE EXPENSES IS INCLUDED IN THE SALE PRICE OF THE PLOT AND SEPARATE CHARGES AGAINST THE DEVELOPMENT EXPENSES TO BE INCURRED BY THE DEVE LOPER IS NOT BEING CHARGED IN ADDITION TO THE SALE PRICE OF THE PLOT TAKEN BY THE DEVELOPER. ITA 787/JP/2016_ ITO VS M/S RANKA COLONIZERS P LTD. 6 THUS THE DEVELOPMENT WORK HAS TO BE CARRIED OUT AS PER THE NORMS AND SPECIFICATION OF THE JDA. THE DEVELOPMENT EXPENSES ARE PART OF COST OF ASSESSEE AND THE SAME ARE REQUIRED TO BE INCURRED AS PER REGULATION OF JDA. T HE DEVELOPMENT EXPENSES INCURRED BY THE ASSESSEE ARE NOT ON INDIVIDUAL PLOT OF PLOT HOL DER BUT THE SAME ARE INCURRED ON ENTIRE SCHEME. IF SUPPOSE A PARTICULAR PLOT HOLDER DOES NO T WANT ROAD OR WATER LINE OR OTHER DEVELOPMENT WORK EVEN THAN THE ASSESSEE HAS TO CARR Y OUT THE DEVELOPMENT WORK IN ACCORDANCE WITH THE JDA NORMS. 6.1 IT WAS ALSO SUBMITTED THAT SIMILAR EXPENSES HAVE BEEN CLAIMED BY THE ASSESSEE AND HAVE BEEN ALLOWED TO THE ASSESSEE BY TH E ASSESSING OFFICER IN SCRUTINY ASSESSMENTS FOR 2007-08, 2008-09 AND 2009- 10 ASSESSMENT YEARS. IN 2010-11 IT WAS SUBMITTED, NO DISALLOWANCE HAS BEEN MA DE AS IT WAS NOT A SCRUTINY ASSESSMENT. IT WAS ONLY IN THE YEAR UNDER C ONSIDERATION THAT FOR THE FIRST TIME IGNORING THE RULE OF CONSISTENCY, THE DEPARTME NT HAS MADE SUCH AN ADDITION BY WAY OF DISALLOWANCE. ACCORDINGLY, IT WAS HIS PRAYER THAT THE IMPUGNED ORDER BE UPHELD AND THE DEPARTMENTAL GROUND BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. ON A CONSIDERATION OF THE PECULIAR FACT S AND CIRCUMSTANCES OF THE CASE, WE FIND THAT, THOUGH, PRIMA FACIE, THE ASSESSE E APPEARS TO HAVE AN ARGUABLE CASE AS CANVASSED BEFORE US. HOWEVER, ARGUMENTS HAVE TO BE SUPPORTED ON FACTS AND THIS IS AN AREA, WHICH IS REQUIRED TO BE CONSIDE RED. SINCE THE EVIDENCE AND SUPPORTING FACTS HAVE NOT BEEN TAKEN INTO CONSIDERA TION BY THE LD. CIT(A), WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER . WE ARE OF THE VIEW THAT SINCE FACTS WERE BROUGHT TO THE NOTICE OF THE LD. CI T(A) IT WAS INCUMBENT UPON HIM TO FIRST ADDRESS THE FACTS AND THEN PROCEED TO CONSIDER THE LAW APPLICABLE THEREON. IT IS SEEN THAT THE DECISION MAKING PROCES S OF THE LD. CIT(A) IS FLAWED AND OPEN TO THE CHALLENGE OF BEING PERVERSE AS HE H AS STRAIGHTWAY PROCEEDED TO DECIDE THE ISSUE ON THE BASIS OF LEGAL PRECEDENCE WI THOUT FIRST CARING TO MARSHAL THE FACTS. LEGAL PRECEDENT IS AVAILABLE BOTH FOR AN D AGAINST A GENERAL PROPOSITION OF LAW AND IT IS ONLY WHEN THE FACTS ARE FIRST ADDRES SED AND THE MATERIAL FACTS ARE CULLED OUT THAT THE CONCLUSION CAN BE SUPPORTED BY LEGAL PRECEDENT. CONSIDERING ITA 787/JP/2016_ ITO VS M/S RANKA COLONIZERS P LTD. 7 THE FACT THAT IT IS A RECURRING ISSUE FOR THE ASSES SEE AND THE TAX AUTHORITIES, WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BACK TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW BY FIRST MARSHALLING THE FACTS OF THE INSTAN T CASE AND THEREAFTER CONSIDER THE PRECEDENT AVAILABLE ON THOSE SET OF FACTS. ACCO RDINGLY, THE IMPUGNED ORDER IS SET ASIDE WITH THE AFORESAID DIRECTION. NEEDLESS TO SAY THAT A REASONABLE OPPORTUNITY OF BEING HEARD SHALL BE AFFORDED TO THE ASSESSEE BY THE LD. CIT(A). SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE T IME OF HEARING ITSELF. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES IN TERMS OF THE ABOVE DIRECTION. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH MARCH, 2017. SD/- SD/- HKKXPAN FNOK LG (BHAGCHAND) (DIVA SINGH) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD-1(2), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S RANKA COLONIZERS PVT. LTD., JAIP UR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 787/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR