Indian Kanoon - Search engine for Indian Law

Income Tax Appellate Tribunal - Mumbai

M/S.Kathawala Realtors Llp, Mumbai vs Dcit(A)-6(4), Mumbai on 26 April, 2019

                                     1


            IN THE INCOME TAX APPELLATE TRIBUNAL,

                    MUMBAI BENCH "H", MUMBAI

     BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND

           SHRI RAJESH KUMAR, ACCOUNTANT MEMBER

                       SA No.162 & 163/M/2019

            (Arising out of ITA No.1633 & 1634/M/2019)

               Assessment Years: 2014-15 & 2015-16

    M/s Kathwala Realtors LLP     Dy.CIT, Central Circle-6(4)
    42, Cambata Building          Room no. 1925, 19th Floor,
    4thfloor,       M.K.Road,     Air India Building, Nariman
                              Vs.
    Churchgate                    Point, Mumbai-400 021
    Mumbai-400 020

    PAN: AAKFK5930H
         (Appellant)                       (Respondent)



     Present for:

     Assessee by                 : Shri Ankit Daga, A.R.
     Revenue by                  : Shri Neelima Nadkarni, D.R.
     Date of Hearing            :        26.04.2019
     Date of Pronouncement       :       26.04.2019


                              ORDER

Per Rajesh Kumar, Accountant Member:

By virtue of these Stay Applications, the assessee seeks the stay of outstanding demands for two AY 2014-15 and 2015-16 of Rs. 2,46,34,402/- and Rs. 97,95,814/- respectively.

2. The Ld. AR submitted before the bench that the income tax demands raised for two years are as a result of additions made on account of on money which were based upon the incriminating loose sheets and other documents were found at the time of survey conducted u/s 133A on 24/09/2014. The Ld. AR submitted that the assessee engaged in the business of construction of flats and is following the project completion method in order to return the income on the sale of flats. Therefore , additions if any, would have to be made when the project would be completed. However, the AO has made the additions during the AY 2014-15 and 2015-16 when the assessee project was substantially incomplete by disregarding the fact that additions if at all were to be made towards on money that would be taxed on the basis of method of accounting following by the appellant by placed reliance on the decision of Hon'ble bench in the case of M/s Runwal Homes Pvt. Ltd vs. Dy. CIT [2017 (12) TMI 1216]. The Ld. AR submitted that the assesse is not having any funds to pay the outstanding demands and the bank accounts of the assessee are even attached by the department. The Ld. AR submitted that in case , the stay is not granted to the assessee, it would cause irreparable loss to the existence of the project and successful completion of the project would be jeopardized . The Ld. AR was requested that the outstanding demands for both the years may kindly be stayed with out of turn hearing of the appeal filed before the Hon'ble Tribunal. The Ld. AR stated that the assessee has already deposited Rs. 25 Lacs against the outstanding demand of AY 2014-15 after passing of the assessment order.

3. The Ld. DR on the other hand strongly objected to the arguments of the AR by submitting that the appeals of the assessee have been dismissed by the CIT(A) and these demands are outstanding as on date.

The Ld. DR prayed before the bench that ld assessee may be directed deposited at least 50% of the outstanding as precondition for grant of stay.

4. After hearing both the parties and perusing the material available on record, we observe that the demand outstanding for two years are Rs. 2,46,34,402/- and Rs. 97,95,814/- respectively. The assessee is engaged in the business of construction of flats and the project of the assessee is substantially incomplete. We observe that survey was conducted on the assessee on 24/09/2014 u/s 133A and some loose sheets were found which we became the basis for addition in these two years on account of own money. The Ld. AR has tried to argue the case on merits but, we would not like state that we are not going into merits at this stage and stay petitions are being decided on the basis of prima-facie case made out by the Ld. AR. We note that the bank accounts of the assessee stood attached by the department. The assessee has also deposited Rs. 25 Lacs against the outstanding demand of AY 2014-15 after passing the assessment order. Since the project of the assesse is substantially incomplete and bank accounts of the assessee are attached, the balance of convenience also weighs in favour of the assessee . We therefore, consider it the reasonable and proper to grant stay to the assessee subject to the condition that assessee would deposit a sum of Rs. 25 Lacs on or before 25/05/2019 against the outstanding demand of AY 2014-15 and the case of the assessee is also fixed for hearing on out of turn basis on 03/06/2019. The assessee is directed not to take adjournment without any reasonable cause failing which the stay would be subject to review by the bench hearing the case. The issue of notice is dispensed with as both the parties are informed in the open court.

5. In the result, the Stay Applications of the assessee are allowed as indicated above.

Order pronounced in the open court on 26.04.2019.

           Sd/-                                        Sd/-

     (Mahavir Singh)                            (Rajesh Kumar)

  JUDICIAL MEMBER                          ACCOUNTANT MEMBER

Mumbai, Dated: 26 .04.2019.

* Thirumalesh, Sr. P.S.



Copy to: The Appellant

         The Respondent

         The CIT, Concerned, Mumbai

         The CIT (A) Concerned, Mumbai

         The DR Concerned Bench

 /True Copy//




                                                              By Order



                                                          (Assistant Registrar)
                                        Income Tax Appellate Tribunal, Mumbai