Income Tax Appellate Tribunal - Mumbai
Awadesh Builders, Mumbai vs Department Of Income Tax on 29 January, 2013
आयकर अपीलीय अिधकरण "ए" Ûयायपीठ मुंबई मɅ।
IN THE INCOME TAX APPELLATE TRIBUNAL " A " BENCH, MUMBAI
ौी Ǒदनेश कुमार अमवाल, Ûयाियक सदःय एवं
ौी डȣ. कǽणाकर राव, लेखा सदःय के सम¢ ।
BEFORE SHRI DINESH KUMAR AGARWAL, JM AND
SHRI D. KARUNAKARA RAO, AM
आयकर अपील सं./I.T.A. No. 624/Mum/2012
( िनधा[रण वष[ / Assessment Year : 2007-08)
Asstt. Commissioner बनाम/
बनाम M/s Awadesh Builders,
of Income-tax - 15(2), Vs. C/o Shankarlal Jain &
Matru Mandir, Associates,C.A's,
Room No. 113, 12 Engineer Building,
Tardeo, 265 Princess Street,
Mumbai - 400 008. Mumbai - 400002.
ःथायी ले खा सं . /PAN : AAJFA5343F
(अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondent)
अपीलाथȸ कȧ ओर से / Appellant by Shri Manoj Kumar
:
ू×यथȸ कȧ ओर से/ Respondent by : Shri Shankarlal Jain
सुनवाई कȧ तारȣख / Date of Hearing : 29-01-2013
घोषणा कȧ तारȣख /Date of Pronouncement : 31-01-2013
आदे श / O R D E R
PER DINESH KUMAR AGARWAL, JM. :
This appeal preferred by the Revenue is directed against the order dtd. 1-11-2011 passed by the ld. CIT(A)- 26, Mumbai for the assessment year 2007-08.
2. Briefly stated facts of the case are that the assessee firm is engaged in the business as builders and developers, filed return of income declaring total income of Rs. 24,94,640/-. The A.O. after processing of the return u/s 143(1) 2 ITA No.624/Mum/2012 of the Income Tax Act, 1961 (the Act), selected the case for scrutiny and accordingly issued statutory notices u/s 143(2) and 142(1) of the Act. During the course of assessment proceeding, it was, inter alia, observed by the A.O. that the assessee has disclosed income from its project 'Sanskruti Apartments' on the basis of project completion method whereas the assessee has not disclosed any profit in another project 'Mannan Apartments' which was started in the year 2007. The A.O., in view of the finding recorded in the assessment order for the A.Y. 2005-06, confirmed by the ld. CIT(A) invoked the provisions of section 145 of the Act and thereby rejected the book results shown by the assessee. The A.O. while observing that in the A.Y. 2005-06 the ld. CIT(A) directed the A.O. to estimate the income at 6.90% instead of 10%, however, estimated the income from 'Mannan project' at Rs. 15,99,070/- being 10% of the amount of Rs. 1,59,90,704/- received by the assessee and similarly he estimated the income of 'Sanskruti project' at Rs. 56,13,305/- being 10% of the amount received by the assessee Rs. 5,61,33,050/-. The A.O. after reducing the assessed income of Rs. 22,28,945/- for A.Y. 2005-06 and Rs. 4,15,390/- for A.Y. 2006-07 from the estimated income of Sanskruti project Rs. 56,13,305/-, worked out the net income from Sanskruti project at Rs. 29,68,970/- and accordingly completed the assessment at an income of Rs. 45,68,040/- vide assessment order dtd. 14-12-2009 passed u/s 143(3) of the Act. On appeal, the ld. CIT(A) following the Tribunal order in assessee's own case for the A.Y. 2005-06 wherein the Tribunal has accepted the method as 3 ITA No.624/Mum/2012 well as the profit disclosed by the assessee, deleted both the additions made by the A.O.
3. Being aggrieved by the order of the ld. CIT(A) the Revenue is in appeal before us taking following grounds of appeal:-
"On the facts and in the circumstances of the case and in law, the Ld. CIT(A), has erred in deleting the addition of Rs. 15,99,070/- made by the Assessing Officer by estimating the profit of the assessee firm, @ 10% of the advances received in the incomplete project, "Mannan Apartments"
by applying the percentage completion method of accounting, as against the project completion method being followed by the assessee.
"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 29,68,970/- made by the Assessing Officer by estimating the profit of the assessee firm, @ 10% of the sales made in the completed Sanskruti project as against profit of 6.95% shown by the assessee.
4. At the time of hearing the ld. D.R. supports the order of the A.O.
5. On the other hand, the ld. Counsel for the assessee while relying on the order of the ld. CIT(A) submits that both the issues are fully covered by the order of the Tribunal in assessee's own case in Awadhesh Builders vs. I.T.O. and vice versa in ITA No. 3691/M/2008 and ITA No. 3695/M/2008 for A.Y. 2005-06 order dtd. 18-12-2009, therefore, the order passed by the ld. CIT(A) in deleting the addition be upheld. He also placed on record the copy of the said order of the Tribunal.
6. We have carefully considered the submissions of the rival parties and perused the material available on record. We find merit in the plea of the ld. Counsel for the assessee that the Tribunal in assessee's own case (supra) while accepting the assessee's system of accounting, deleted both the additions 4 ITA No.624/Mum/2012 made by the A.O. It has been observed and held by the Tribunal that the assessee has followed project completion method which was one of the prescribed methods and the same method has been accepted by the Department in the earlier years. Department, therefore, cannot reject the method and apply percentage completion method in a subsequent year. The Tribunal further held that the assessee already, following the same method, has declared the entire income in A.Y. 2007-08 when the project was complete. The same income cannot be assessed in the earlier year by rejecting the regular and recognized method being followed by the assessee and, accordingly, set aside the order of the ld. CIT(A) and allowed the claim of the assessee. With regard to the net profit rate, the Tribunal held that the income from project can be assessed only in A.Y. 2007-08 when the project was complete and not in this year and accordingly upheld the order of the ld. CIT(A) in accepting the net profit rate at 6.95% shown by the assessee.
7. In the absence of any distinguishing feature brought on record by the Revenue authorities, we respectfully following the order of the Tribunal (supra), decline to interfere with the order passed by the ld. CIT(A) on both the issues and, accordingly, both the grounds taken by the Revenue are rejected. 5 ITA No.624/Mum/2012
8. In the result, Revenue's appeal stands dismissed.
पǐरणामतः राजःव कȧ अपील खाǐरज कȧ जाती है ।
Order pronounced in the open court on 31-01-2013 .
आदे श कȧ घोषणा खुले Ûयायालय मɅ Ǒदनांकः 31-01-2013 को कȧ गई ।
Sd/- Sd/-
(D. KARUNAKARA RAO) (DINESH KUMAR AGARWAL)
लेखा सदःय / ACCOUNTANT MEMBER Ûयाियक सदःय / JUDICIAL MEMBER
मुंबई Mumbai; Ǒदनांक Dated 31/01/2013
व.िन.स./ r.k. , Sr. PS
आदे श कȧ ूितिलǒप अमेǒषत/Copy
षत of the Order forwarded to :
1. अपीलाथȸ / The Appellant
2. ू×यथȸ / The Respondent.
3. आयकर आयुƠ(अपील) / The CIT(A)-
4. आयकर आयुƠ / CIT
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai
6. गाड[ फाईल / Guard file.
स×याǒपत ूित //True Copy// आदे शानुसार/ ार BY ORDER, उप/ उप/सहायक पंजीकार (Dy./Asstt.
Registrar) आयकर अपीलीय अिधकरण, अिधकरण, मुंबई / ITAT, Mumbai