DCIT, Trichy V. M/s Sree Complex, Trichy

ITA 899/CHNY/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58118 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-03-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 04-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 148

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI D BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 899/MDS/2009 ASSESSMENT YEAR: 1999-2000 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE II, TRICHY. VS. M/S. SREE COMPLEX, 18-21, MADURAI ROAD, TRICHY 620 008. [PAN: AAAFS9319L] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL ASSESSEE BY : NONE DATE OF HEARING : 12.03.2012 DATE OF PRONOUNCEMENT : 16.03.2012 ORDER PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST T HE ORDER OF THE CIT(A), TIRUCHIRAPALLI DATED 13.03.2009 IN ITA NO. 14/07-08 RELEVANT TO THE ASSESSMENT YEAR 1999-2000. SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVENUE. 2. WHEN THE CASE WAS CALLED FOR HEARING, NONE APPE ARED ON BEHALF OF THE ASSESSEE INSPITE OF SERVICE OF NOTICES [AD ON RECOR D) OR ANY ADJOURNMENT APPLICATION HAS BEEN FILED. HENCE, WE PROCEEDED TO DECIDE THE APPEAL EX- PARTE QUA THE ASSESSEE AND AFTER HEARING THE LD. DR . I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.899 899899 899/M/ /M/ /M/ /M/09 0909 09 2 3. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCO ME FOR THE ASSESSMENT YEAR 1999-2000 ON 22.05.2000 DECLARING LOSS OF ` .5,21,810/-. THE ASSESSING OFFICER COMPLETED ASSESSMENT UNDER SECTION 143(3) R .W.S. 147 ON 21.12.2006 BY ISSUING NOTICE UNDER SECTION 148 DETE RMINING TOTAL INCOME AT ` .18,56,685/-. WHILE DOING SO, HE MADE AN ADDITION O F ` .23,78,495/- TO THE LOSS RETURNED BY THE ASSESSEE. THE ASSESSING OFFICE R STATED THAT THE ASSESSEE WAS CONSTRUCTING AN OFFICE COMPLEX AT MADU RAI ROAD. THE CONSTRUCTION EXPENSES ARE DEBITED AS WORK-IN-PROGRE SS. THE AREA CONSTRUCTED WAS TRANSFERRED TO BUILDING ACCOUNT. TH E ASSESSEE ENTERED INTO AN AGREEMENT WITH THE LAND LORD AND WHENEVER THE CO NSTRUCTED AREA IS SOLD THE LAND IS TRANSFERRED TO THE PURCHASER BY THE LAN D LORD. SINCE THE CONSTRUCTION WAS NOT COMPLETED WITHIN THREE YEARS, THE ASSESSEE PURCHASED THE UNSOLD PORTION OF THE LAND. THE COST OF THE SIT E IS APPEARING UNDER THE HEAD CURRENT ASSET, BUT THE SAME HAS NOT BEEN SHO WN IN THE CLOSING STOCK. THEREFORE, THE ASSESSING OFFICER WAS OF THE OPINION THAT AS THE ASSESSEE HAS PURCHASED UNSOLD PROPERTY FROM THE LAND LORD AS ON 31.03.1999, THE SAME HAS TO BE SHOWN AS CLOSING STOCK. THE VALUE OF THE LAND IS TREATED AS CLOSING STOCK AND THE SAME IS ADDED TO THE RETURNED LOSS BY THE ASSESSEE AND ARRIVED AT TOTAL INCOME OF ` .18,56,685/- BY THE ASSESSING OFFICER. 4. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AGAINST THE ADDITION MADE IN THE ASSESSMENT ORDER, WHICH WAS DELETED BY THE CIT(A). THE CIT(A) I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.899 899899 899/M/ /M/ /M/ /M/09 0909 09 3 HELD THAT THE COST OF THE SITE IS REFLECTED IN THE BOOKS OF THE ASSESSEE AND THEREFORE THERE IS NO UNEXPLAINED INCOME AND DELETE D THE ADDITION OF ` .23,78,495/- MADE IN THE ASSESSMENT ORDER. 5. AT THE TIME OF HEARING, THE LD. DR SUBMITTED TH AT THE CIT(A) DID NOT GIVE AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXA MINE THE EVIDENCES FILED BY THE ASSESSEE BEFORE THE CIT(A) IN THE FORM OF AG REEMENT ENTERED INTO BETWEEN THE ASSESSEE FIRM AND THE LAND LORD IN THE YEAR 1987, REGISTRATION OF SALE DEEDS FOR THE PURCHASE OF SITE IN THE NAME OF ONE OF THE PARTNERS SHRI A.K.K. RAVICHANDRAN DURING THE YEAR 1991 AND COPY O F ACCOUNTS OF SHRI A.K.K. RAVICHANDRAN IN THE BOOKS OF ASSESSEE FIRM, DURING APPELLATE PROCEEDINGS AND THEREFORE IS IN VIOLATION OF PROVIS IONS OF RULE 46A(3) OF THE INCOME TAX RULE, 1962. HE FURTHER SUBMITTED THAT TH E MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINATION OF THE FACTS AND EVIDENCES BY THE ASSESSING OFFICER. 6. WE HAVE PERUSED THE ORDERS OF LOWER AUTHORITIES AND FIND THAT THE CIT(A) HAS NOT ALLOWED AN OPPORTUNITY TO THE ASSESS ING OFFICER TO EXAMINE THE FRESH EVIDENCES SUBMITTED IN THE FORM OF AGREEM ENT ENTERED INTO BETWEEN THE ASSESSEE FIRM AND THE LAND OWNERS, REGI STRATION OF SALE DEEDS FOR THE PURCHASE OF SITE IN THE NAME OF ONE OF THE PARTNERS SHRI A.K.K. RAVICHANDRAN AND COPY OF ACCOUNTS OF SHRI A.K.K. RA VICHANDRAN IN THE BOOKS OF THE ASSESSEE FIRM OR OBTAINED ANY REMAND R EPORT FROM THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.899 899899 899/M/ /M/ /M/ /M/09 0909 09 4 ASSESSING OFFICER. THEREFORE, IN OUR CONSIDERED OPI NION, THIS MATTER SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR EX AMINING THE EVIDENCES FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) IN SUPPORT OF ITS CONTENTION THAT COST OF THE LAND HAS ALREADY REFLECTED IN THE BOOKS OF ACCO UNTS OF THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT( A) AND REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR EXAMINING THE EVIDENCES PRODUCED BEFORE THE LD. CIT(A) AND DECIDE THE ISSUE AFRESH A S PER LAW AFTER ALLOWING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORDE R ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 16.03.2012. SD/- SD/- (DR. O.K. NARAYANAN) VICE - PRE SIDENT (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER CHENNAI, DATED, THE 16.03.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.