ACIT, Jaipur V. SHAKUNTALAM COLONIZERS PVT. LTD., Jaipur

ITA 822/JPR/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5561 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA CIT DHK
• Section: 143(3); 145

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 822/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR CUKE VS. M/S SHAKUNTALAM COLONIZERS PVT. LTD.,103-104, GEETANJALI TOWER, AJMER ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AA KCS2988N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : P.C PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : MUKESH VERMA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 7.02.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28.02.2017 VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-I, JAIPUR DATED 01/08/2013 PERTAINING TO A.Y. 2009-10 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE AD DITION OF RS. 3,50,18,617/- MADE BY THE AO AFTER INVOKING THE PRO VISIONS OF SECTION 145 (3) SINCE THE ASSESSEE HAS NOT MAINTAINED ITS B OOKS ON PERCENTAGE COMPLETION METHOD PRESCRIBED BY THE INSTITUTE OF CH ARTERED ACCOUNTANTS,INDIA. (II) WHETHER ONE THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN IGNORING THE FA CT THAT BY FOLLOWING PROJECT COMPLETION METHOD ASSESSEE HAS NOT FOLLOWED THE ACCOUNTING STANDARDS PRESCRIBED IN AS-9 AND AS-7 WHICH TENTAMO UNTS TO NOT FOLLOWING AS-1 PROVIDED IN SEC. 145(2) OF THE I.T.A CT 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN IGNORING THE ACT TH AT THE ASSESSEE WAS 2 ITA NO. 822/JP/2013 M/S SHAKUNTALAM COLONIZERS PVT. LTD NOT MAINTAIN STOCK REGISTER & CERTAIN EXPENSES WERE NOT SUPPORTED BY BILLS & THEREFORE REJECTION OF BOOKS BY THE AO WAS JUSTIFIED. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE AV ERAGE SELLING PRICE OF PLOTS TAKEN BY THE AO AT RS. 1750/- SQ. YARDS IS NO T CORRECT, DESPITE THE FACT THAT THE AO HAS CONSIDERED THE VARIOUS PLO TS SOLD DURING THE YEAR BY THE ASSESSEE AND WORKED OUT THE AVERAGE SEL LING PRICE OF PLOTS. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT WAS FRAMED U NDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). WHILE FRAMING THE ASSESSMENT, THE AO OBSERVED THAT ASSESSEE WAS FOLLO WING PROJECT COMPLETION METHODS. IN THE OPINION OF THE ASSESSING OFFICER, T HE ASSESSEE SHOULD HAVE FOLLOWED THE PERCENTAGE COMPLETION METHOD AND THE PROCEEDED TO APPLY THE PERCENTAGE COMPLETION METHODS. THEREBY, THE AO COMPUTED NET PR OFIT FOR THE ASSESSMENT YEAR 2009-10 OF RS. 57,34, 529/- AND PROCEEDED TO MAKE A DDITION OF RS.3,50,18,617/-. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSION ALLOWED THE APPEAL. THE LD. CIT(A) AFTER CONSIDERING THE VARIOUS JURDICIAL PRONOUNCEMENT, HELD THAT THE ASSE SSEE WHO IS ADMITTEDLY A COLONIZER AND REAL ESTATES DEVELOPERS IS NOT BOUND TO FOLLOW PERCENTAGE OF COMPLETION METHOD AND THE SAME CANNOT BE IMPOSED O N IT BY THE ASSESSING OFFICER. NOW, REVENUE AGGRIEVED BY THE LD. CIT (A) HAS PREFE RRED THE PRESENT APPEAL. 3. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED TH E ORDERS OF THE ASSESSING OFFICER AND SUBMITTED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION BY APPLYING PERCENTAGE COMPLETION METHOD. HE RELIE D ON THE JUDGMENT OF HONBLE 3 ITA NO. 822/JP/2013 M/S SHAKUNTALAM COLONIZERS PVT. LTD SUPREME COURT RENDERED IN THE CASE P.M MOHAMMED ME ERAKHAN VS. COMMISSION OF INCOME TAX ,KERELA ,73 ITR 735(SC). 4. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF LD. CIT(A) AND SUBMITTED THAT THERE IS NO ILLEGALITY IN TO THE ORDER OF LD. CIT(A) AS THE ISSUE IS NO MORE RES-INTEGRA AS THE HONBLE SUPREM E COURT IN THE CASE OF CIT VS. BILAHARI INVESTMENT PRIVATE LTD. 299 ITR 1 (SC) HAS DECIDED THE ISSUE. THE RELIANCE IS ALSO PLACED ON THE JUDGMENT OF THE HON. DELHI HI GH COURT IN THE CASE OF PARAS BUILDTECH INDIA PVT. LTD. VS. COMMISSIONER OF INCOM E TAX AND ANOTHER, 382 ITR 630 (DELHI). 5. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL AVAILABLE RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THE HONBLE DELHI HIGH COURT UNDER THE IDENTICAL FACTS IN THE CASE OF PARAS BUI LDTECH INDIA PVT. LTD. VS. COMMISSIONER OF INCOME TAX AND ANOTHER HELD THAT I T IS A SETTLED LEGAL POSITION AS PER SECTION 145 OF THE ACT THAT IT IS NOT OPEN TO A .O. TO REJECT THE ACCOUNT OF ASSESSEE UNLESS HE GIVES TO DETERMINATION THAT NOTI FIED ACCOUNTING STANDARDS HAVE NOT BEEN REGULARLY FOLLOWED BY THE ASSESSEE. IT IS FURTHER OBSERVED BY THE HONBLE COURT THAT AS POINTED OUT BY THE CIT(A) IN ORDER DA TED, 2 JULY, 2010 AS ICAI DID NOT HAVE ANY STATUTORY RECOMMENDATION UNDER THE ACT THA T IT WAS BINDING UPON THE COMPANY UNDER THE ACT OF 1956, THE METHOD OF ACCOUN TING FOLLOWED BY THE ASSESSEE. IN THE PRESENT CASE THE ASSESSEE IS FOLLOWING PROJE CT COMPLETION METHOD CERTAINLY ONE OF THE RECOGNIZED METHODS AND HAS BEEN CONSTANT LY FOLLOWED BY IT. IN VIEW OF THE AFOREMENTIONED BINDING JUDICIAL PRECEDENTS, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF LD. CIT (A), THE SAME IS HEREBY UPHELD. 4 ITA NO. 822/JP/2013 M/S SHAKUNTALAM COLONIZERS PVT. LTD 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED. ORDER IS PRONOUNCED IN THE OPEN COURT ON: 28/2/20 17. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 28/2/2017. POOJA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT. THE ACIT CIRCLE-2, JAIPUR 2. THE RESPONDENT M/S SHAKUNTALAM COLONIZERS PVT. LTD., JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 822/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR