Assistant Commissioner of Income Tax, Non Corporate Circle 13(1), Chennai V. S.Mainraj, Chennai

MA 77/CHNY/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6837 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 20-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS S VIJAYA PRABHA
• Assessee Lawyers: J VINOTH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , . , $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER MISCELLANEOUS PETITION NO. 77 / CHNY /20 18 (IN ITA NO.2133/CHNY/2017) % % /ASSESSMENT YEAR: 2013-14 THE ASST. COMMISSIONER OF- INCOME TAX, NON-CORPORATE CIRCLE-13(1), 4 TH FLOOR, ANNEXE BUILDING, AAYAKAR BHAVAN, 121, M.G. ROAD, CHENNAI-600 034. VS. SHRI S.MAINRAJ, NO.60, RAGHAVAN COLONY, VADAPALANI, CHENNAI-600 026. [PAN: AGPPM 1877 J ] ( ( /APPELLANT) ( )*( /RESPONDENT) DEPARTMENT BY : MRS.S.VIJAYAPRABHA, JCIT ASSESSEE BY : MR.J.VINOTH, ADV. , /DATE OF HEARING : 22.06.2018 , /DATE OF PRONOUNCEMENT : 02.07.2018 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER : THE REVENUE HAS FILED THE PRESENT MISCELLANEOUS PE TITION ON THE GROUND THAT THERE WAS AN ERROR IN THE ORDER OF THIS TRIBUNAL. 2. MRS.S.VIJAYAPRABHA, LD.DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THIS TRIBUNAL HAS NOT ADJUDICATED THE ISSUE RAISED BY THE REVENUE WITH REGARD TO THE DEVELOPMENT EXPENDITURE OF RS.26,05,2 61/-. REFERRING TO MP NO.77/CHNY/2018 (IN ITA NO.2133/CHNY/2017) :- 2 -: PARA NO.3 OF TRIBUNALS ORDER DATED 28.02.2018, THE LD.DR SUBMITTED THAT AT COLUMN NO.11(A) OF THE AUDIT REPORT SHOWS THAT T HE ASSESSEE WAS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND A T COLUMN NO.11(B) OF THE AUDIT REPORT, THE ASSESSEE CLAIMS THAT THERE WA S NO CHANGE IN THE METHOD OF ACCOUNTING. THEREFORE, THE ASSESSEE IS FO LLOWING MERCANTILE SYSTEM OF ACCOUNTING. HOWEVER, THIS TRIBUNAL CONCL UDED THAT THE ASSESSEE WAS FOLLOWING CASH SYSTEM OF ACCOUNTING. THE FINDI NGS OF THE TRIBUNAL ARE CONTRARY TO THE DOCUMENTARY EVIDENCE AVAILABLE ON T HE RECORD. MOREOVER, AT PARA NO.4 OF THE TRIBUNAL ORDER, IT WAS OBSERVED THAT WHEN THE ASSESSEE RECEIVED ADVANCE RIGHT TO RECEIVE THE MONE Y ACCRUES TO THE ASSESSEE ONLY ON THE DATE OF THE SALE. THE ABOVE FI NDINGS ARE CONTRARY TO THE FACTS OF THE CASE. ACCORDING TO THE LD.DR, HAL F OF THE SALES HAVE BEEN MADE DURING THE AY 2013-14. THEREFORE, THE ORDER O F THIS TRIBUNAL NEEDS TO BE RECTIFIED. 3. WE HEARD MR.J.VINOTH, LD.COUNSEL FOR THE ASSESSE E ALSO. 4. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THIS TRIBUNAL. THE AO MADE TWO ADDITIONS IN THE ASSESSMENT ORDER. ONE IS WITH REGARD TO THE SUPPRESSION OF THE SALES TO THE EXTENT OF RS.58,08, 352/-. THE AO HAS ALSO MADE AN ADDITION BY DISALLOWING THE LAND DEVELOPMEN T EXPENDITURE TO THE EXTENT OF RS.26,05,261/-. IN FACT, THE TOTAL EXPEN DITURE CLAIMED BY THE ASSESSEE IS RS.1,04,21,045/-. THE AO DISALLOWED 20 % OF THE SALE BEING MP NO.77/CHNY/2018 (IN ITA NO.2133/CHNY/2017) :- 3 -: RS.26,05,261/-. THE LD.CIT(A) EXAMINED THE MATTER ON THE BASIS OF THE MATERIAL AVAILABLE ON THE RECORD. THE LD.CIT(A) RE STRICTED THE DISALLOWANCE TO 5% FROM 20%. SINCE THE EXPENDITURE WAS DISALLOWED ON ESTIMATE BASIS, THIS TRIBUNAL DO NOT FIND ANY REASO N TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. 5. COMING TO THE SUPPRESSION OF SALES, THIS TRIBUNA L SPECIFICALLY FOUND THAT IRRESPECTIVE OF THE METHOD OF ACCOUNTING FOLLO WED BY THE ASSESSEE RIGHT TO RECEIVE THE MONEY, MAY NOT ACCRUE TO THE A SSESSEE WHEN THE AMOUNT WAS RECEIVED AS ADVANCE FOR SALE OF FLAT. W HAT WAS SAID TO BE RECEIVED BY THE ASSESSEE IS ONLY AN ADVANCE. THERE FORE, THE REFERENCE ABOUT THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSE SSEE IN THE AUDIT REPORT MAY NOT BE A RELEVANT FACTOR. THEREFORE, THI S TRIBUNAL DO NOT FIND ANY ERROR WHICH NEEDS TO BE RECTIFIED. ACCORDINGLY, THE MISCELLANEOUS PETITION FILED BY REVENUE STANDS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN JULY 02, 201 8, IN CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) /ACCOUNTANT MEMBER ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER MP NO.77/CHNY/2018 (IN ITA NO.2133/CHNY/2017) :- 4 -: /CHENNAI, 1 /DATED: JULY 02, 2018. TLN , )23 43 /COPY TO: 1. ( /APPELLANT 4. 5 /CIT 2. )*( /RESPONDENT 5. 3 ) /DR 3. 5 ( ) /CIT(A) 6. % /GF