WEST BENGAL HOUSING INFRASTRUCTURE DEVELOPERMENT CORPORATION LTD., Kolkata V. THE Pr. CIT, KOLKATA-5, KOLKATA, Kolkata

ITA 913/KOL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1539 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 02-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PASS KOLKAT
• Section: 143(3); 142(1); 263

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 913 / KOL / 2017 ASSESSMENT YEAR :2012-13 WEST BENGAL HOUSING INFRASTRUCTURE DEVELOPMENT CORPORATION LTD., HIDCO BHAWAN, PREMISES NO.35-1111, MAJOR ARTERIAL ROAD, 3 RD ROTARY NEW TOWN, KOLKATA-156 [ PAN NO.AAACW 4115 F ] V/S . PR. CIT-5, AAYAKAR BHAWANA, POORVA, 110, SHANTI PALLY, E.M.BYPASS, KOLKAT-107 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SANJAY BHATTACHARYA, FCA /BY RESPONDENT MD. USMAN, CIT-DR /DATE OF HEARING 15-01-2018 /DATE OF PRONOUNCEMENT 14-02-2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THE ASSESSEE HAS FILED THIS APPEAL DISPUTE ORDER O F PR. COMMISSIONER OF INCOME TAX-5, KOLKATA PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 30.03. 2017 BY WHICH THE LD. PR. CIT SET ASIDE THE ASSESSMENT ORDER DATED 02.03.2015 PAS SED U/S 143(3) OF THE ACT FOR ASSESSMENT YEAR 2012-13 WITH A DIRECTION TO RE-DO THE ASSESSMENT IN RESPECT OF ISSUE THEREIN. SHRI SANJAY BHATTACHARYA, LD. AUTHORIZED REPRESENTA TIVE APPEARED ON BEHALF OF ASSESSEE AND MD. USMAN, LD. DEPARTMENTAL REPRESE NTATIVE APPEARED ON BEHALF OF REVENUE. ITA NO.913/KOL/2017 A.Y. 2012-13 W.B.H.I.D.COR.LTD. VS. PR. CIT KOL-5 PAGE 2 2. THOUGH ASSESSEE HAS RAISED AS MANY AS 4 GROUNDS OF APPEAL, HOWEVER AS PER OUR CONSIDERED VIEW SOLE AND SUBSTANTIAL GRO UND OF APPEAL IS THAT LD. PR. CIT ERRED IN HOLDING THE ORDER FRAMED BY ASSESS ING OFFICER U/S 143(3) OF THE ACT AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO TH E INTEREST OF REVENUE. 3. BRIEFLY, THE FACTS ARE THAT ASSESSEE IN THE PRES ENT CASE IS A LIMITED COMPANY AND ENGAGED IN BUSINESS OF LAND DEVELOPMENT , HOUSING AND CREATION INFRASTRUCTURE FACILITIES AND SALE OF FULLY DEVELOP ED PLOTS OF LAND. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS FILED ITS RETUR N INCOME DECLARING TOTAL INCOME OF 3,36,21,470//- ONLY. SUBSEQUENTLY THE CASE WAS SELE CTED UNDER SCRUTINY ON THE BASIS OF CASS MODULE AND ACCORDINGL Y NOTICE U/S. 143(2) / 142(1) WERE ISSUED AND SERVED UPON ASSESSEE. THE AS SESSMENT WAS FRAMED BY THE AO U/S. 143(3) OF THE ACT AFTER MAKING VARIO US ADDITIONS /DISALLOWANCES TO THE TOTAL INCOME OF ASSESSEE VIDE ORDER DATED 02 .03.2015 AT A TOTAL INCOME OF RS. 176,76,82,590.00 SUBSEQUENTLY LD. PR. CIT U/S 263 OF THE ACT OBSERVE D THAT THERE IS A DEFECT/ ERROR IN THE ASSESSMENT ORDER PASSED BY AO WHICH IS PREJUDICIAL TO THE INTEREST OF REVENUE. IT WAS OBSERVED BY LD. PR. CIT THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF 2,54,14,000/- RECEIVABLE FROM WEST BENGAL STATE ELE CTRICITY DISTRIBUTION CO. LTD. (WBSEDCL FOR SHORT) IN ITS BA LANCE-SHEET. THE AFORESAID AMOUNT WAS ADJUSTED AGAINST THE PROJECT COST AND WI THOUT CREDITING THE SAME IN PROFIT AND LOSS ACCOUNT. THEREFORE THE AMOUNT OF 2,54,14,000/- RECEIVABLE FROM WBSEDCL WAS NOT CONSIDERED BY THE AO IN COMPUT ING THE TOTAL INCOME OF ASSESSEE. ACCORDINGLY, LD. PR. CIT ISSUED A NOTI CE U/S 263 OF THE ACT VIDE NO. F. NO. PCIT,KOL-5/263/M/S WBIDC LTD./2016-17/65 12 DATED 13.01.2017 FOR TREATING THE ORDER PASSED BY AO AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. IN COMPLIANCE THERETO, ASSESSE E SUBMITTED THAT THE IMPUGNED ISSUE OF 2.54 CORES BEING THE AMOUNT RECEIVABLE FROM WBSBDCL WAS DULY CONSIDERED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT. ITA NO.913/KOL/2017 A.Y. 2012-13 W.B.H.I.D.COR.LTD. VS. PR. CIT KOL-5 PAGE 3 4. AS SUCH THE ASSESSEE HAS INCURRED COST OF LAYING THE PERMANENT ELECTRICAL INFRASTRUCTURE WITH A VIEW TO ENSURE ULT IMATE SUPPLY OF ELECTRICITY TO VARIOUS CONSUMERS AT THEIR INDIVIDUAL PLOTS WHICH W AS CLASSIFIED UNDER THE HEAD PROJECT COST (WIP) IN ITS ASSET SIDE OF THE BALANCE-SHEET. SUCH PROJECT COST WAS NEVER CLAIMED AS EXPENSES IN THE PROFIT AN D LOSS ACCOUNT. THEREFORE, THE AMOUNT OF COST RECEIVABLE FROM WBSEDCL IN CONNE CTION WITH SUCH PROJECT WAS REDUCED FROM THE PROJECT COST. THEREFORE, THE A MOUNT RECEIVABLE FROM WBSEDCL CANNOT BE TREATED AS REVENUE IN THE HANDS O F ASSESSEE. HOWEVER, LD. PR. CIT DISREGARDED THE CONTENTION OF ASSESSEE AND HELD THE ORDER PASSED BY AO ERRONEOUS IN SO FAR PREJUDICIAL TO THE INTERE ST OF REVENUE BY OBSERVING AS UNDER:- REGARDING THE SUM OF RS.2,54,14,000/- WHICH WAS REC EIVABLE FROM (WBSEDCL), THE AMOUNT WAS ADJUSTED WITH THE PROJECT COST. THE ASSESSEE FOLLOWS MERCANTILE SYSTEM AND THE AMOUNT RECEIVABLE SHOULD HAVE BEEN ROUTED THROUGH PROFIT & LOSS ACCOUNT. MOREOVER, THE AMOUNT IS REVENUE RECEIPT AND HAS NOTHING TO DO WITH THE PROJECT COST . THE TRIPARTITE AGREEMENT IS NOT RELEVANT IN THIS REGARD. I, THEREFORE, HOLD THA T THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E IN THIS RESPECT. 5. THE ASSESSMENT ORDER IS SET ASIDE U/S.263 AND TH E AO IS DIRECTED TO COMPLETE THE ASSESSMENT AFTER MAKING ADDITION OF RS .2,54,14,000/- AS MENTIONED ABOVE. THE AO IS ALSO DIRECTED THAT WHILE DOING SO, HE SHALL PROVIDE A REASONABLE OPPORTUNITY OF BEING HEAD TO T HE ASSESSEE. AGGRIEVED BY THIS, THE ASSESSEE HAS COME UP IN APPE AL BEFORE US. 5. BEFORE US LD. AR FOR THE ASSESSEE FILED PAPER BO OK WHICH IS RUNNING PAGES FROM 1 TO 36 AND SUBMITTED THAT THE AMOUNT OF 2.54 CRORES WAS RECEIVABLE FROM WBSEDCL IN CONNECTION WITH PROJECT COST INCURRED BY ASSESSEE. THEREFORE SAME CANNOT BE TREATED AS REVEN UE INCOME AND ACCORDINGLY THE QUESTION OF SHOWING THE SAME IN THE PROFIT AND LOSS ACCOUNT DOES NOT ARISE. HE REQUESTED THE BENCH TO CONFIRM T HE ASSESSMENT ORDER. ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF LD. PR. CIT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, WE FIND THAT THERE IS NO DISPUTE THAT THE PROJECT COST WAS INCURRED BY ASSES SEE ON LAYING THE PERMANENT ELECTRICAL INFRASTRUCTURE WHICH WAS CLASS IFIED IN THE ASSETS SIDE OF ITA NO.913/KOL/2017 A.Y. 2012-13 W.B.H.I.D.COR.LTD. VS. PR. CIT KOL-5 PAGE 4 THE BALANCE-SHEET. SUCH PROJECT COST WAS NOT CLAIME D AS EXPENSE IN ANY OF THE YEAR AS EVIDENT FROM THE SCHEDULED OF THE BALAN CE-SHEET OF ASSESSEE WHICH IS PLACED ON PAGE 34 OF THE PAPER BOOK. THERE FORE, ANY AMOUNT RECEIVABLE FROM WBSEDCL IN CONNECTION WITH SUCH PRO JECT COST WILL CERTAINLY REDUCE FROM THE PROJECT COST INCURRED BY ASSESSEE. AS SUCH, THE ASSESSEE HAS REDUCED THE SAME FROM THE PROJECT COST SHOWN IN ITS BALANCE-SHEET. THUS THE AMOUNT WAS RECEIVABLE FROM WBSEDCL WAS NOT INCOME I N THE HANDS OF THE ASSESSEE. THEREFORE, IN OUR CONSIDERED VIEW THE SAM E CANNOT BE SHOWN AS INCOME IN THE PROFIT AND LOSS ACCOUNT. KEEPING IN V IEW ALL THESE DISCUSSIONS AND ALSO BEARING IN MIND ENTIRE FACTS OF THE CASE, WE DEEM IT FIT AND PROPER TO UPHOLD THE GRIEVANCE OF ASSESSEE AND QUASH THE IMPU GNED REVISION ORDER OF LD. PR. CIT AS DEVOID OF JURISDICTION. THE ASSESSEE GETS RELIEF ACCORDINGLY. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 14/ 02/2018 SD/- SD/- ($ &) ( &) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S (- 14 / 02 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-WEST BENGAL HOUSING INFRASTRUCTURE DEVEL OPMENT CORPORATION LTD. HIDCO BHAWAN, PR EMISES NO.35-1111 MAJOR ARTERIAL ROAD, 3 RD ROTARY, NEW TOWN , KOLKATA-156 2. /RESPONDENT-PR.CIT-5,AAYAKAR BHAWAN,POORV,110,SHANT IPALLY,E.M.BYPASSKOL-107 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 $$3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,