Income Tax Appellate Tribunal - Indore
The Acit-1(1), Bhopal vs Shri Ramakant Gupta, Bhopal on 25 September, 2018
आयकर अपील य अ धकरण, इ दौर यायपीठ, इ दौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
AND
SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No.276/Ind/2016
Assessment Year: 2006-07
ACIT-1(1) Ramakant Gupta
Bhopal बनाम/ 103-A, Kolar Road,
Janki Nagar Chuna Bhatti
Vs.
Indore
(Revenue) (Respondent)
P.A. ABOPG0166C
Appellant by Shri P.K. Mitra Sr. DR
Respondent by Shri Prakash Jain & Shreya Jain, Advs.
Date of Hearing: 17.09.2018
Date of Pronouncement: 25.09.2018
आदे श / O R D E R
PER MANISH BORAD, A.M:
This appeal of Revenue pertaining to A.Y. 2006-07 is directed against the order of Ld. Commissioner of Income Tax(Appeals)-31, New Delhi camp Bhopal, (in short 'CIT(A)'), dated 04.01.2016 which is arising out of the order u/s 143(3) r.w.s 147 of the Income Tax Act Ramakant Gupta 1961(hereinafter called as the 'Act') framed on 22.03.2013 by ITO,1(1), Bhopal.
2. The revenue's sole grievance is against the deletion of disallowance of Rs.12,75,000/- by Ld. CIT(A) which was made by the Learned Assessing Officer (Ld. AO) disallowing the alleged claim of direct expenses on account of Security Deposit debited in profit and loss account.
3. Briefly stated facts as culled out on the records are that the assessee is an individual and engaged in civil and work contractor. The return of income was processed u/s 143(1) of the Act on 31.01.2007 at a total income of Rs.18,00,210/-. Subsequently, on account of internal audit observation about the alleged claim of payment of security deposit to Nagar Nigam, Ujjain amounting to Rs.12,75,000/- claimed as expenditure. The Ld. AO issued notice u/s 148 of the Act dated 27.03.2012 which was duly served upon the assessee. During the course of assessment proceedings it was pleaded by the assessee that only nomenclature has been shown as security deposit but actually this is a part of expenditure of the project undertaken by the assessee. However Ld. AO did not accept the plea and added Rs.12,75,000/- to the income of 2 Ramakant Gupta the assessee thereby the assessing the income at Rs.30,75,210/-.
4. Aggrieved the assessee preferred an appeal before the Ld. CIT(A) and succeed. Now the Revenue is in appeal before the Tribunal.
5. Ld. Departmental Representative (DR) vehemently argued supporting the order of the Ld. AO and Ld. counsel for the assessee relied on the finding of Ld. CIT(A) and also drew the attention of the bench at page 28 of the paper book to show that the alleged amount of Rs.12,75,000/- was part of the contract to be paid to Nagar Nigam Ujjain.
6. We have heard the rival contentions and perused the material available on record placed before us. The revenue's sole grievance relates to deletion of disallowance of Rs.12,75,000/-. We observe that Ujjain Municipal Corporation(in short 'UMC'), floated tender for constructing and developing the Sabji Mandi Bhadur Ganj under builder /promoter scheme which was to be handed over to the UMC, free of cost by the builder in addition to development of commercial shopping complex at existing Sabji Mandi Premises at Daulatganj which the builder can market to 3 Ramakant Gupta finance this venture. The assessee quoted rate of Rs.85,04,101/- towards consideration (premium) of entire Built Operating Transfer(BOT) offer and was required to deposit of Rs.12,75,000/- as the installment for the agreed consideration with UMC.
7. This sum of Rs.12,75,000/- has been paid by the assessee in two installment of Rs. 5,00,000/- and Rs.7,75,000/- which are non-refundable and it was a part of consideration/premium to be paid under the BOT contract for construction of shopping complex. This fact further gets strengthened with the letter issued by the Finance Department of Nagar Nigam Ujjain placed at page no.28 of paper book.
8. We therefore, in the given facts and circumstances of the case, are of the view that alleged amount of Rs.12,75,000/- has been rightly claimed as part of direct cost and the Ld. AO erred in adding the same to the income merely by observing that it is a security deposit. No interference is therefore called for in the finding of Ld. CIT(A).
4Ramakant Gupta
9. In the result, the appeal of the Revenue stands dismissed.
Order was pronounced in the open court on 25 .09.2018.
Sd/- Sd/-
(KUL BHARAT) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Indore; दनांक Dated : 25/ 09/2018
ctàxÄ? P.S/. न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file.
By order Private Secretary/DDO, Indore 5