PR. COMMISSIONER OF INCOME TAX-CENTRAL, JAIPUR V. M/S ANKIT CHIRAG DEVELOPERS PVT. LTD.

ITA/11/2019

AI Insights

The case involves two connected appeals by the Principal Commissioner of Income Tax (Central), Jaipur against M/s Ankit Chirag Developers Pvt. Ltd. The appeals pertain to disputes over the application of accounting methods and tax disallowances under the Income Tax Act. The primary legal questions revolved around the acceptance of the percentage of completion method for accounting purposes and the disallowance under section 40(a)(ia) of the Income Tax Act. The court's decision referenced previous judgments and the Supreme Court's rulings to resolve the disputes.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 719542 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 14-09-2023
• Assessment Year: misc
• Other Referred Cases: Palam Gas Services Vs CIT, CIT Central Jaipur Vs. Unique Builders and Developers, Shree Choudahry Transport Company Vs. Income Tax Officer
• Laws Referred To: Income Tax Act, Accounting Standards AS-7 & AS-9
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SIDDHARATH RANKA; HARSHVARDHAN SINGH
• Assessee Lawyers: K K BISSA
• Keywords: Disallowance; Income tax appeal; Percentage of Completion Method; Suppression of Sales Receipt
• Section: 40(a)(ia)

Judgement Text

"[2023:RJ-JD:29700-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 12/2019 Principal Commissioner of Income Tax (Central), Jaipur. ----Appellant Versus M/s Ankit Chirag Developers Pvt. Ltd., 54-55 Rajdeep, New Fatehpura, Udaipur. ----Respondent Connected With D.B. Income Tax Appeal No. 11/2019 Principal Commissioner of Income Tax (Central), Jaipur. ----Appellant Versus M/s Ankit Chirag Developers Pvt. Ltd., 54-55 Rajdeep, New Fatehpura, Udaipur. ----Respondent For Appellant(s) : Mr. K.K. Bissa. For Respondent(s) : Mr. Siddharath Ranka, through V.C. Mr. Harshvardhan Singh. HON'BLE THE CHIEF JUSTICE AUGUSTINE GEORGE MASIH HON'BLE MR. JUSTICE VINIT KUMAR MATHUR Order 14/09/2023 (Oral) By this order, we propose to dispose of both the appeals, which have been preferred by the Revenue relating to the same assessee and the questions of law involved therein are identical. 2. Learned counsel for the appellants has clarified that both the questions in D.B. Income Tax Appeal No.11/2019 would be the subject-matter of D.B. Income Tax Appeal No.12/2019 as Question [2023:RJ-JD:29700-DB] (2 of 3) [ITA-12/2019] No.1 & 3, which may be decided against the appellant-Revenue and in favour of the assessee, but Question No.2 in D.B. Income Tax Appeal No.12/2019 is different and the same may be decided against the assessee and in favour of the appellant-Revenue. 3. For the purpose of convenience, three substantial questions of law, which have been framed by the appellant in Income Tax Appeal No.12/2019 are reproduced as follows: “1. Whether on the facts and circumstances of the case the ld. ITAT was justified in law in confirming the decision of the CIT(A) of deleting the addition of Rs.6,22,52,685/- made by the AO by applying percentage of completion method which is prescribed under Accounting Standards AS-7 & AS-9 after rejecting the method of accounting adopted by the assessee? 2. Whether on the facts and circumstances of the case the decision of the ld. ITAT does not suffer from perversity of law in confirming the decision of the CIT(A) of deleting the disallowance made by the AO u/s 40(a) (ia) of the Income Tax which is contrary to the decision of the Hon’ble Supreme Court in the case of Palam Gas Services Vs CIT reported at 394 ITR 300 SC and which was even conceded by the Assessee before ITAT? 3. Whether on the facts of and circumstances of the case the Hon’ble ITAT was justified in law in directing the AO to compute income arising from suppression of sales receipt by applying project completion method on?” 4. Questions No.1 & 3 herein are answered against the appellant in the light of the judgment of this Court in CIT Central Jaipur Vs. Unique Builders and Developers and other connected matters [2017 (5) TMI 1505 (Rajasthan High Court)]. It has been brought to our notice that the SLP preferred against the said judgment has been dismissed by the Hon’ble Supreme Court vide order dated 31.07.2023 i.e. Special Leave to Appeal (C) No.13072/2018 – Commissioner of Income Tax II Jaipur Vs. M/s. Rama Ajit Builders & Developers. [2023:RJ-JD:29700-DB] (3 of 3) [ITA-12/2019] 5. In the light of above, the D.B. Income Tax Appeal No.11/2019 stands dismissed. 6. As far as Question of Law No.2 is concerned, the same is answered in favour of the appellant-Revenue and against the assessee, in the light of the judgment passed by the Hon’ble Supreme Court in Shree Choudahry Transport Company Vs. Income Tax Officer [2020 (8) TMI 23 (Supreme Court)]. 7. The D.B. Income Tax Appeal No.12/2019 stands partly allowed in above terms. (VINIT KUMAR MATHUR),J (AUGUSTINE GEORGE MASIH),CJ 147-a.asopa/- "