ASST CIT 25(3), MUMBAI V. K.D. ENTERPRISES, MUMBAI

ITA 9092/MUM/2010

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0936 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.9092/MUM/2010 / ASSESSMENT YEAR 2007-08. THE ACIT 25(3), C-11, R.NO.308, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(EAST), MUMBAI 400051 / VS. M/S.K.D.ENTERPRISES, 121/122, SONA SHOPPING CENTER, TRIKAMDAS ROAD, KANDIVALI (WEST), MUMBAI 67. ./ ./ PAN/GIR NO. : AAEFK3339G ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI JEEVANLAL LAVIDIYA R ESPONDENT BY SHRI NIRAV VORA ' # $ / DATE OF HEARING : 09/06/2015 ' # $ / DATE OF PRONOUNCEMENT : 09/06/2015 / O R D E R PER I.P.BANSAL,J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-35, MUMBAI DATED 18/10/2010 FO R ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.16,37,969/- MA DE BY THE ASSESSING OFFICER BASED ON NP ADMITTED BY THE ASSESSEE DURING THE COU RSE OF SURVEY. (II) THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. A SURVEY WAS CONDUCTED AT THE PREMISES OF THE ASSE SSEE UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (THE ACT) ON 21/08/2007. D URING THE COURSE OF SURVEY IT . / ITA NO.9092/MUM/2010 / ASSESSMENT YEAR 2007-08. 2 WAS FOUND THAT THE PROJECT BEING DEVELOPED BY THE ASS ESSEE NAMELY PALM SPRING WAS COMPLETED DURING THE YEAR UNDER CONSIDERATION AND NE T PROFIT AS PER BOOKS OF ACCOUNTS WAS SHOWN AS RS.79.62 LACS. DURING THE C OURSE OF SURVEY IT WAS ADMITTED BY THE PARTNER OF THE ASSESSEE FIRM THAT PROFIT AS PE R PROFIT AND LOSS ACCOUNT IS A SUM OF RS.79.62 LACS, WHICH WILL ACCORDINGLY BE DISCLO SED IN THE RETURN TO BE FILED. ANOTHER AMOUNT OF RS.2.25 CRORES WAS ALSO SURRENDERED WHICH WAS IN ACCORDANCE WITH LOOSE PAPER FOUND DURING THE COURSE OF SURVEY AND FOR WHICH THERE IS NO DISPUTE IN THE PRESENT APPEAL AS THE SAME WAS DULY DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME AND ACCEPTED BY THE AO. 3. HOWEVER, IT WAS FOUND BY THE AO THAT IN PLACE OF RS .79.62 LACS SHOWN AS PROFIT BY THE ASSESSEE FROM PALM SPRING PROPERTY, THE ASSESSEE HAD SHOWN AN INCOME OF RS.63,24,031/- ( RS.2,88,24,031 BEING RETURNED INCO ME (-) RS.2,25,00,000/- BEING AMOUNT DECLARED DURING THE COURSE OF SURVEY IN RESPE CT OF LOOSE PAPER). HE, THEREFORE, REQUIRED THE ASSESSEE TO EXPLAIN THE SHORTFALL OF RS .16,37,969/- (RS.79,62,000 (-) RS.63,24,031/-). THE ASSESSEE HAS FILED THE REPLY AS UNDER: THE NET PROFIT OF RS.79.62 LACS STATED ON THE DAT E OF SURVEY IN PALM SPRING PROJECT WAS TOTAL NET PROFIT OF THE WHOLE PROJECT. NET PROFIT SHOWN YEAR WISE IS RS.71.82 AS PER STATEMENT ENCLOSED HEREWITH. IT WA S TYPOGRAPHIC ERROR THAT THE PROFIT STATED WAS APPROXIMATELY AND NOT ACTUAL. WE WERE IN SUCH STATE OF MIND DURING THE SURVEY THAT WE HAVE NOT NOTED THE MISTAK E. OVER AND ABOVE WHAT WE HAVE DECLARED RS.2.25 CRORES IS ALSO PART OF PROFIT ONLY. 3.1 THE AO DID NOT ACCEPT SUCH SUBMISSION OF ASSES SEE AND ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SURVEY, THE RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER, MADE T HE ADDITION. 4. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE ASSE SSEE DID NOT ALTER ANY OF THE ENTRY IN THE P&L ACCOUNT FOUND DURING THE COURS E OF SURVEY AND IT WAS ONLY DUE TO MISTAKE, THE PROFIT WAS STATED AT RS.79.62 LACS AND FOLLOWING RECONCILIATION WAS SUBMITTED TO CONTEND THAT THE PR OFIT AS PER P&L ACCOUNT FOUND DURING THE COURSE OF SURVEY WAS IN ACCORDANCE WITH THE PROFIT DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. . / ITA NO.9092/MUM/2010 / ASSESSMENT YEAR 2007-08. 3 THE NET PROFIT DERIVED APPROXIMATELY RS.79.62 LACS BEFORE THE DEPRECIATION CLAIMED THROUGHOUT THE PROJECT AND EXPENSES FOR THE YEAR 2006-07 AS UNDER: RS. IN LA KHS. PROFIT ESTIMATED DURING THE SURVEY 79.62 ACTUAL PROFIT OF THE PROJECT(AS PER WORKING ENCLOSE D WHICH IS REFERRED IN THE ORDER PARA 5.1 71.82 --- ------ 7 .80 A) DEPRECIATION CLAIMED DURING THE PROJECTS: YEAR RS. 2002-03 79,628 2003-04 1,59,985 2004-05 1,58,300 2005-06 96,361 2006-07 47,736 6,42,010 B)EXPENSES FOR THE YEAR RS. 1,39,962 TOTAL OF A + B = RS.7,80,972 I.E. RS.7,80 LA KHS HE SUBMITTED THAT THE APPELLANT ALREADY ADMITTED P ROFIT IN THE EARLIER YEARS AS SHOWN BELOW: A.Y 2002-03 RS. 71,000 A.Y 2003-04 RS.1,56,000 A.Y.2004-05 RS.2,01,000 A.Y.2005-06 RS.4,30,000 A.Y. 2007-08 RS.63,24,000 --------------------- - TOTAL RS.71,82,000 --------------------- 4.1 LD. CIT(A) CONFRONTED THE AO WITH THE AFOREMENTION ED RECONCILIATION SUBMITTED BY THE ASSESSEE AND REQUIRED THE AO TO PR ODUCE COPY OF P&L ACCOUNT AND OTHER DOCUMENTS FOUND DURING THE COURSE OF SURVEY SO AS TO VERIFY THE CONTENTION OF THE ASSESSEE. HOWEVER, AO COULD NOT PRODUCE ANY DOCUMENTS ACCORDING TO WHICH IT COULD BE SAID THAT THE PROFIT OF THE ASSESSEE WAS TO THE TUNE OF RS.79.62 LACS IN PLACE OF PROFIT DECLARED B Y THE ASSESSEE AT A SUM OF RS.63,24,031/-. IT IS IN THESE CIRCUMSTANCES LD. C IT(A) HAS DELETED THE ADDITION OF RS.16,37,969/-, AGAINST WHICH REVENUE I S AGGRIEVED AND HAS RAISED AFOREMENTIONED GROUNDS OF APPEAL. 5. LD. DR RELIED UPON THE ORDER PASSED BY THE AO AND LD. AR RELIED UPON THE ORDER OF LD. CIT(A). . / ITA NO.9092/MUM/2010 / ASSESSMENT YEAR 2007-08. 4 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE ASSESSEE HAD SUBMITTED RECONCILIA TION STATEMENT BEFORE LD. CIT(A). THE SAID RECONCILIATION STATEMENT WAS CONF RONTED BY LD. CIT(A) TO THE AO, WHO COULD NOT PRODUCE ANY DOCUMENTS TO VERIFY T HE STAND TAKEN BY THE AO THAT PROFIT DECLARED BY THE ASSESSEE IN THE P&L ACC OUNT FOUND DURING THE COURSE OF SURVEY WAS TO THE TUNE OF RS.79.62 LACS. IF THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY REALLY SHOWN THE NET PR OFIT OF RS.79.62 LACS, THEN THE SAID DOCUMENTS WAS REQUIRED TO BE BROUGHT ON RE CORD TO CONTRADICT THE PROFIT SHOWN BY THE ASSESSEE IN THE RETURN OF INCOM E. THE ADDITION HAS BEEN MADE BY THE AO SIMPLY ON THE BASIS OF STATEMENT REC ORDED DURING THE COURSE OF SURVEY, WHICH WAS REBUTTABLE. ON THE BASIS OF ACC OUNTS MAINTAINED BY THE ASSESSEE PROFIT OF RS.63,24,031/- WAS SHOWN AND AO DID NOT SPECIFY THAT WHICH ENTRY WAS CHANGED BY THE ASSESSEE IN THE P&L ACCOUN T ATTACHED WITH THE RETURN OF INCOME AS COMPARED TO THE P&L ACCOUNT FOU ND DURING THE COURSE OF SURVEY. THEREFORE, WE ARE OF THE OPINION THAT LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION AND NO INTERFERENCE IS CALLED FOR IN THE D ELETION OF ADDITION. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/06/2015 ' )* + , 09/06/2015 ' SD/- SD /- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ) MUMBAI; + DATED 09/06/2015 . / ITA NO.9092/MUM/2010 / ASSESSMENT YEAR 2007-08. 5 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /# ( ) / THE CIT(A)- 4. /# / CIT 5. 01 #23 , $ 23 , ) / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, 0# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ) / ITAT, MUMBAI . . ./ VM , SR. PS