ACIT CEN CIR 25, MUMBAI V. SHREE GANESH DEVELOPERS, NAVI MUMBAI

ITA 894/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71571 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 09-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: SUBODH L RATNAPARKHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NOS. 894 & 895/MUM/2012 ASSESSMENT YEARS: 2007-08 & 2008-09 ACIT, CEN. CIR. 25 ROOM NO. 404, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 VS. SHREE GANESH DEVELOPERS PLOT NO. 4, SECTOR 16, SANPADA. NAVI MUMBAI 400 705 PAN:ABDFS 4862 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUBODH L. RATNAPARKHI REVENUE BY : SHRI GIRIJA DAYAL DATE OF HEARING : 13.08.2013 DATE OF PRONOUNCEMENT : 23.10.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AG AINST THE ORDERS OF THE LD.CIT(A) -39, MUMBAI BOTH DATED 08.11.2011 FOR THE ASSESSMENT YEARS 2007-08 & 2008- 09. SINCE THE ISSUES INVOLVED IN BOTH THE APPEALS A RE COMMON BOTH THE APPEALS ARE DISPOSED OFF BY THIS COMMON ORDER. 2. IN BOTH THE APPEAL, THE REVENUE HAS AGITATED THE ACTION OF THE LD.CIT(A) DIRECTING THE AO TO DELETE THE ADDITIONS MADE ON ACCOUNT OF S UPPRESSION OF GROSS PROFIT AMOUNTING TO RS.31,59,113/- AND RS.2,46,68,096/- RESPECTIVELY FOR THE ASSESSMENT YEARS 2007-08 & 2008-09. 3. BRIEFLY STATED, THE ASSESSEE, A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPERS AND CONSTRUCTION ACTIVITY WAS DEV ELOPING A PROJECT AT SANPADA, NAVI MUMBAI AND HAD BEEN FOLLOWING PERCENTAGE OF WORK CO MPLETION METHOD OF ACCOUNTING. AS THE ASSESSEE HAD NOT FILED ANY DETAILS OF CONSTRUCT ION EXPENSES AND NOT GIVEN ANY REASONS FOR THE FALL OF GP RATIO, THE AO ESTIMATED THE GP A T 25% AND THEREBY MADE THE RESPECTIVE ADDITIONS IN THE ASSESSMENT YEARS UNDER CONSIDERATI ON. ON APPEAL, THE LD.CIT(A) DELETED ITA NOS. 894 & 895/MUM/2012 SHREE GANESH DEVELOPERS ASSESSMENT YEARS: 2007-08 & 2008-09 2 THE IMPUGNED ADDITIONS MADE BY THE AO ON THE REASON THAT THE AO HAD NOT TAKEN INTO ACCOUNT OF THE GP OFFERED BY THE ASSESSEE IN THE PR EVIOUS YEARS TO THE RELEVANT ASSESSMENT YEARS. IF THOSE THINGS WOULD HAVE BEEN T AKEN AND CONSIDERED BY THE AO, THE GP AGAINST THE SALE WILL BE MORE THAN THE GP DETERM INED BY THE AO. AGGRIEVED BY THE IMPUGNED ORDERS, THE REVENUE IS IN APPEAL BEFORE US . 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS OBSERVED THAT SO FAR AS THE ASSESSMENT YEAR 2007-08 IS CONCERNED, THE AO HAS NOT CONSIDERED THE INCOME OFFERED BY THE ASSESSEE IN THE ASSESSMENT YE AR 2006-07 IN WHICH THE ASSESSEE HAS OFFERED RS.17,04,743/- I.E. 10% OF THE GROSS RE CEIPTS AS TOTAL INCOME. IN THAT YEAR, THE ADMINISTRATIVE AND OTHER EXPENDITURE INCURRED I S RS.46,95,248/-. IF THIS IS ALSO TAKEN INTO ACCOUNT THE GP ADMITTED FOR ASSESSMENT YEAR 20 06-07 WILL BE RS.63,99,991/-. IF THAT GROSS PROFIT IS ALSO TAKEN INTO ACCOUNT, THE ASSESS EE HAS OFFERED RS.2,37,43,255/- AS GP AGAINST THE SALES OF RS.8,38,60,046/- WHICH WORKS O UT TO 28.31% WHICH IS MORE THAN THE GP DETERMINED BY THE AO. IN RESPECT OF THE ASSESSME NT YEAR 2008-09, THE AO HAS NOT CONSIDERED THE GP OFFERED BY THE ASSESSEE UP TO THE ASSESSMENT YEAR 2007-08. UPTO THE ASSESSMENT YEAR 2007-08 THE ASSESSEE HAS OFFERED GP OF RS.2,37,43,255/- AS AFOREMENTIONED. IF THAT GROSS PROFIT IS ALSO TAKEN INTO ACCOUNT THE ASSESSEE HAS OFFERED RS.6,72,60,561/- AS GP AGAINST THE SALES OF RS.27,2 7,41,609/- WHICH WORKS OUT TO 24.29% WHICH IS ALMOST SAME AS THE GP DETERMINED BY THE AO . FURTHER THE AO HAS NOT LISTED OUT ANY COMPARABLE CASES TO COME TO THE CONCLUSION THAT THE GP SHOULD BE 25%. IN VIEW OF THAT MATTER, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE ORDERS OF THE LD.CIT(A) AND THE SAME ARE UPHELD. 5. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF OCTOBER, 2013. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23.10.2013. *SRIVASTAVA ITA NOS. 894 & 895/MUM/2012 SHREE GANESH DEVELOPERS ASSESSMENT YEARS: 2007-08 & 2008-09 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR E BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.