Sreevatsa Real Estates Pvt. Ltd., Coimbatore V. ITO, Coimbatore

MA 185/CHNY/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4014 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: T BANUSEKAR
• Keywords: Rectification of order; Right to appeal
• Section: 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] M.P.NOS.185 & 186/MDS/2015 [IN I.T.A.NOS.2094/MDS/2013 & 2250/MDS/2012] ASSESSMENT YEAR : 2009-10 M/S SREEVATSA REAL ESTATES PVT. LTD 8/2 METTUPALAYAM ROAD COIMBATORE 641 043 VS. THE INCOME TAX OFFICER COMPANY WARD I COIMBATORE [PAN AADCS 0177 J] ( PETITIONER ) ( ,-./ /RESPONDENT) PETITIONER BY : SHRI T.BANUSEKAR, CA RESPONDENT BY : SHRI A.V SREEKANTH, JCIT / DATE OF HEARING : 29 - 01 - 2016 / DATE OF PRONOUNCEMENT : 25 - 02 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THE ASSESSEE FILED THE PRESENT MISCELLANEOUS PE TITIONS ON THE GROUND THAT THERE IS ERROR IN THE ORDER OF THIS TRIBUNAL DATED 29.5.2015. 2. REFERRING TO THE ORDER OF THIS TRIBUNAL MORE PARTIC ULARLY, PARA 24 AT PAGE NO.24, SHRI BANUSEKAR, LD. REPRESENTATIV E FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE OF PROPORTIONATE EX PENDITURE TO THE MP NOS.185 & 186/15 :- 2 -: EXTENT OF ` 2,16,79,351/- WAS CONFIRMED BY THIS TRIBUNAL ON TH E GROUND THAT THE ASSESSEE ITSELF FILED REVISED WORK ING BEFORE THE ASSESSING OFFICER. WHEN THE VERY SAME ISSUE CAME B EFORE THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2010-11 IN THE VER Y SAME ORDER AT PARA 20, THIS TRIBUNAL FOUND THAT ON IDENTICAL SET OF FACTS, WHERE THE ASSESSEE ITSELF FILED REWORKING OF THE PROPORTIONAT E EXPENDITURE, REMITTED THE MATTER BACK TO THE FILE OF THE ASSESSI NG OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE JUDG MENTS RELIED UPON BY THE ASSESSEE. REFERRING TO A LETTER SAID TO BE WR ITTEN BY THE ASSESSEE TO THE ASSESSING OFFICER ON 29.11.2012, WHICH IS PA RT OF THE RECORD, THE LD. REPRESENTATIVE SUBMITTED THAT THE REWORKING OF THE PROPORTIONATE EXPENDITURE WAS FILED BEFORE THE ASSE SSING OFFICER WITHOUT PREJUDICE THE ASSESSEES RIGHT OF APPEAL A GAINST THE ISSUE OF RESTRICTION OF THE CLAIM OF DEDUCTION U/S 10IB(10) OF THE ACT. THEREFORE, THERE WAS A CONTRADICTION IN THE ORDER O F THIS TRIBUNAL AT PARA 20 AND PARA 24 OF THE ORDER. 3. WE HEARD SHRI A.V SREEKANTH, LD. DEPARTMENTAL REPRESENTTIVE ALSO. THE LD. DR VERY FAIRLY SUBMITT ED THAT FOR THE ASSESSMENT YEAR 2010-11 ON THE VERY SAME ISSUE OF P ROPORTIONATE EXPENDITURE WHERE THE ASSESSEE HAS FILED REVISED W ORKING, THIS TRIBUNAL REMITTED THE MATTER BACK TO THE FILE OF TH E ASSESSING OFFICER. HOWEVER, FOR THE ASSESSMENT YEAR 2009-10, AT PARA 2 4, THIS TRIBUNAL MP NOS.185 & 186/15 :- 3 -: CONFIRMED THE ADDITION. THEREFORE, FOR THE ASSESSM ENT YEAR 2009-10, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. TH E ASSESSEE PRAYS FOR RECTIFICATION OF ORDER FOR THE ASSESSMENT YEAR 2009-10 MORE PARTICULARLY, PAGE 24 PARA 24 OF THE ORDER OF THIS TRIBUNAL. FROM THE MATERIAL AVAILABLE ON RECORD IT APPEARS THAT WHILE GIVING EFFECT TO THE ORDER OF THE CIT(A) DATED 18.10.2012, THE ASSESSING OFFICER DEDUCTED PROPORTIONATE EXPENDITURE TO THE EXTENT OF ` 2,16,79,351/-. THIS WAS CONFIRMED BY THE CIT(A) ON THE GROUND THAT THE ASS ESSEE ITSELF FILED THE WORKING OF THE EXPENDITURE. AS RIGHTLY SUBMITT ED BY THE LD. REPRESENTATIVE AND THE LD. DR, FOR THE ASSESSMENT YEAR 2010-11, ON IDENTICAL SET OF FACTS, THE ISSUE WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE WAS AN ERROR TO T HAT EXTENT IN THE ORDER OF THIS TRIBUNAL DATED 29.5.2015 WHICH NEEDS TO BE RECTIFIED U/S 254(2) OF THE ACT. ACCORDINGLY, THE ORDER OF THIS TRIBUNAL DATED 29.5.2015 IS RECTIFIED AS FOLLOWS: PARA 24 AT PAGE 24 IS HEREBY DELETED. THE FOLLOWING SHALL BE INSERTED AS PARA 24 OF THE O RDER DATED 29.5.2015: MP NOS.185 & 186/15 :- 4 -: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. NO DOUBT, THE ASSESSEE FILED THE REVISED WORKING/CLAIM TOWAR DS DEDUCTION U/S 80IB OF THE ACT. WHILE CONSIDERING THE IDENTICAL SET OF FACTS FOR ASSESSMENT YEAR 2010-11, THIS TRIBUNAL AT PARA 20 OF THIS ORDER, REMITTED THE MAT TER BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATI ON IN THE LIGHT OF THE JUDGMENT RELIED UPON BY THE ASSESSEE BEFORE THIS TRIBUNAL. ACCORDINGLY, THE ORDER OF THE CIT(A ) FOR ASSESSMENT YEAR 2009-10 IS ALSO SET ASIDE AND THE I SSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE JUDGMENT RELIED UPON BY THE ASSESSEE AND TH EREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. THE ORDER OF THIS TRIBUNAL DATED 29.5.2015 FOR ASSE SSMENT YEAR 2009-10 IS ACCORDINGLY RECTIFIED. 6. NOW COMING TO M.P.NO.186/MDS/2015, THE LD. REPRESEN TATIVE FOR THE ASSESSEE SUBMITTED THAT THIS TRIBUNAL WHIL E DISPOSING THE APPEAL IN I.T.A.NO.2250/MDS/2012 FOR ASSESSMENT YEA R 2009-10, DIRECTED THE ASSESSING OFFICER TO VALUE THE LAND AF TER TAKING INTO CONSIDERATION THE PENDENCY OF THE CIVIL SUIT. THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSEE ADMITS BEFORE THIS TRI BUNAL THAT IT HAS NO TITLE OVER THE SUBJECT MATTER OF LAND. THE CIVIL S UIT FILED AGAINST THE ASSESSEE FOR DECLARATION OF THE SALE DEED AS NULL A ND VOID IS PENDING BEFORE THE MADRAS HIGH COURT. THE HIGH COURT HAS A LSO PASSED AN INTERIM ORDER OF INJUNCTION RESTRAINING THE ASSESS EE FROM ALIENATING THE SUBJECT LANDED PROPERTY. IN THOSE CIRCUMSTANCES, A CCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE CANNOT SELL THE PRO PERTY IN THE OPEN MP NOS.185 & 186/15 :- 5 -: MARKET AND THE PROPERTY BEING STOCK-IN-TRADE, HAS NO MARKET VALUE. ACCORDING TO THE LD. REPRESENTATIVE, THE STOCK AS T O BE VALUED EITHER AT COST OR AT MARKET PRICE WHICHEVER IS LESS. SINCE T HERE IS NO MARKET FOR THE LAND ON THE LAST DAY OF THE FINANCIAL YEAR UNDE R CONSIDERATION AND THE MADRAS HIGH COURT HAS RESTRAINED THE ASSESSEE FROM SELLING THE LAND, ACCORDING TO THE LD. REPRESENTATIVE, THE VALU E OF THE LAND HAS TO BE CONSIDERED AT NIL. 7. ON THE CONTRARY, SHRI A.V SREEKANTH, LD. DR SUBMITT ED THAT THIS TRIBUNAL AFTER CONSIDERING THE PENDENCY OF THE CIVIL SUIT PENDING BEFORE THE MADRAS HIGH COURT AND THE CRIMINAL CASE PENDING BEFORE THE MAGISTRATE COURT, FOUND THAT IT CANNOT BE SAID THAT THE VALUE OF THE LANDED PROPERTY HAS NO REALIZABLE VALUE AT ALL. TH E TRIBUNAL HAS ALSO FOUND THAT PENDING LITIGATION BEFORE THE MADRAS HIG H COURT AND THE MAGISTRATE COURT MAY NOT ENABLE THE ASSESSEE TO CAR RY OUT THE DEVELOPMENT WORK AS PROPOSED. THE RIGHT TO RECOVER COMPENSATION AND THE SALE CONSIDERATION TOGETHER WITH INTEREST I S REMAINED INTACT EVEN IF THE HIGH COURT DECIDES AGAINST THE ASSES SEE AND DECLARE THE SALE DEED EXECUTED ON 14.12.2005 AS NULL AND VOID. ULTIMATELY, THE TRIBUNAL FOUND THAT DUE TO PENDENCY OF THE CIVIL SU IT, THE MARKET VALUE MAY CONSIDERABLY BE REDUCED. IT DOES NOT MEAN THAT THE LAND HAS NO VALUE AT ALL. IN VIEW OF THIS FINDING OF THE TRIBU NAL, THERE IS NO PRIMA- FACIE ERROR IN THE ORDER OF THIS TRIBUNAL WHICH NEE DS TO BE RECTIFIED. MP NOS.185 & 186/15 :- 6 -: 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. TH E CONTENTION OF THE ASSESSEE NOW BEFORE THIS TRIBUNAL IS THAT THE ASSE SSEE HAS NO TITLE OVER THE PROPERTY. IT IS NOT FOR THIS TRIBUNAL TO DECIDE ABOUT THE TITLE OF THE ASSESSEE OVER THE PROPERTY. IT IS THE FUNCTIO N OF THE CIVIL COURT AND THIS TRIBUNAL CANNOT ADJUDICATE THE CLAIM OF TH E ASSESSEE OVER THE TITLE OF THE PROPERTY. SINCE THE CIVIL SUIT IS PEN DING BEFORE THE MADRAS HIGH COURT, IT IS FOR THE MADRAS HIGH COURT TO DECI DE ABOUT THE TITLE OF THE SUBJECT LAND. AS RIGHTLY SUBMITTED BY THE LD. DR, THE FACT REMAINS THAT THE RIGHT TO RECOVER COMPENSATION AND THE SALE CONSIDERATION TOGETHER WITH INTEREST IS REMAINED INTACT IN CASE T HE HIGH COURT DECIDES THE CIVIL SUIT AGAINST THE ASSESSEE. THIS TRIBUNA L FURTHER FOUND THAT MERE PENDENCY OF THE CIVIL SUIT BEFORE THE HIGH COU RT CANNOT BE A REASON TO SAY THAT THE LANDED PROPERTY HAS NO REALI ZABLE VALUE. IN VIEW OF THE ABOVE CATEGORICAL FINDING OF THIS TRIBU NAL, THERE IS NO ERROR IN THE ORDER OF THIS TRIBUNAL WHICH NEEDS TO BE REC TIFIED U/S 254(2) OF THE ACT. ACCORDINGLY, THIS TRIBUNAL FINDS NO MERIT IN THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE. 9. IN THE RESULT, M.P.NO.185/MDS/2015 IS ALLOWED WHERE AS M.P.NO.186/MDS/2015 IS DISMISSED. MP NOS.185 & 186/15 :- 7 -: ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY, 2016 AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER / CHENNAI / DATED: 25 TH FEBRUARY, 2016 RD !' / COPY TO: 1 . PETITIONER 4. # # $ / CIT 2. %#&' / RESPONDENT 5. ()*# +, / DR 3. # # $ (! *) / CIT(A) 6. )./ 0 / GF