DCIT, Circle - 4, Kolkata, Kolkata v. M/s. Aardee Credit Pvt. Ltd., Kolkata

ITA 1994/KOL/2010 | 2006-2007
Pronouncement Date: 19-07-2011

Appeal Details

RSA Number 199423514 RSA 2010
Assessee PAN AACCA2522J
Bench Kolkata
Appeal Number ITA 1994/KOL/2010
Duration Of Justice 8 month(s) 17 day(s)
Appellant DCIT, Circle - 4, Kolkata, Kolkata
Respondent M/s. Aardee Credit Pvt. Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 19-07-2011
Appeal Filed By Department
Bench Allotted Not Allotted
Tribunal Order Date 19-07-2011
Date Of Final Hearing 19-07-2011
Next Hearing Date 19-07-2011
Assessment Year 2006-2007
Appeal Filed On 01-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A KOLKATA [ () . .. . ! ! ! !. .. . '# ] ]] ] [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE S RI C. D. RAO AM] % % % % /ITA NO.1994/KOL/2010 &' ()/ ASSESSMENT YEAR : 2006-07 (+ / APPELLANT ) - & - ( ./+ /RESPONDENT) D.C.I.T.CIRCLE-4 KOLKATA -VERSUS- M/S.AA RDEE CREDIT PVT. LTD. (PAN: AACCA 2522 J) + 0 1 '/ FOR THE APPELLANT: SHRI P.P.SARKAR ./+ 0 1 '/ FOR THE RESPONDENT: SHRI RAJEEVA KUMAR '2 / ORDER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 22.03.2010 OF THE CIT(A)-IV KOLKATA PERTAINING TO A.YR. 2006-07. 2. THERE IS A DELAY OF 15 DAYS IN FILING OF THE APPEAL BY THE REVENUE FOR WHICH THE REVENUE HAS FILED A CONDONATION PETITION EXPLAINING THE REASONS FOR SUCH DELAY. AFTER CONSIDERING THE SUBMISSIONS BY THE REVENUE THE DELA Y IS CONDONED. 3. THE ONLY ISSUE RAISED BY THE REVENUE IS RELA TING TO THE DELETION OF ADDITION OF RS.11 73 672/- ON ACCOUNT OF DEVELOPMENT COST OF TH E LAND. 4. THE BRIEF FACTS OF THE ISSUE ARE THAT THE AO WHILE DOING THE SCRUTINY ASSESSMENT MADE ADDITION OF RS.11 73 672/- BY OBSERVING AS UN DER :- IN THE P& L ACCOUNT THE ASSESSEE HAS DEBITED RS.14 92 170/- AS COST OF DEVELOPMENT OF LAND AND ENTIRE AMOUNT HAS BEEN DEFA ULTED FROM THIS YEARS INCOME. FROM THE DETAILS IT IS SEEN THE COST OF DEV ELOPMENT WAS INCURRED FOR 63634/ SQ FT OF LAND OF CHILAHATI PROJECTS. THE DET AILED BREAK SUBMITTED ON 11.12.2008 SHOWS THAT ONLY 13582/ SQ.FT AREA OF LAN D HAS BEEN SOLD DURING THE YEAR. IN THIS REGARD THE DIRECTOR WAS ASKED TO SUBS TANTIATE AS TO HOW ENTIRE COST OF DEVELOPMENT IS ALLOWABLE FOR THIS YEAR. 2 THE ASSESSEE FILED DETAILED OF SALE WHEREIN IT IS C LAIMED THAT THE ASSESSEE HAS SOLD 23980/SQ.FT AREA FOR RS.200000/- THE AMOUNT I S INCLUDED IN VALUE BUT QUANTITY AHS NOT BEEN INCLUDED IN SALE VALUE. ON AN ALYSIS OF DETAILS IT IS SEEN THAT DESCRIPTION/SCHEDULE OF LAND DEVELOPMENT BEING KHASRA NO.237/1 239/1 & 239/3 ARE DIFFERENT FROM THE NON-DEVELOPED LAND HAV ING KHASRA NO.237 &240/4. THEREFORE THE STORY OF SALE OF 23980/SQ.FT OPEN SP ACE THOUGH AT THE RATE OF RS.8.34/SQ.FT AGAINST DEVELOPED LAND HAVING RANGE O F 70-80/SQ.FT IS NOT ACCEPTED. THE ASSESSEE HAS TRIED TO MISLEAD THE FIN DING FROM THE FACTS. ACCORDINGLY PROPORTIONATE COST OF DEVELOPMENT IS A LLOWED FOR THIS YEAR AS UNDER :- AREA OF LAND 63634 AMOUNT OF DEVELOPMENT 1492170 RATE OF SQ.FT. RS.23.45 AREA OF LAND SOLD 13582 COST OF DEVELOPMENT FOR LAND SALE RS.3 18 498/- THEREFORE BALANCE RS.1492170 RS.318498 = RS.1173 672 IS ADDED BACK. 4.1. ON APPEAL THE LD. CIT(A) HAS DELETED THE AD DITION BY OBSERVING THAT :- 3.2. I HAVE CAREFULLY EXAMINED THE ASSESSMENT ORD ER AND WRITTEN SUBMISSION AND DOCUMENT FILED BY THE ASSESSEE. THE AO HAS NOT DISPUTED ABOUT SALE OF 13582 SQ.FT FOR THE CONSIDERATION OF RS.9 98 220/- AND ALSO SALE OF LAND 23980 SQ.FT. FOR RS.2 00 000/-. AS PER THE ASSESSEE THE T OTAL AREA OF UNSOLD LAND WAS ONLY 26072 SQ.FT. THE AO ONLY ALLOWED DEVELOPMENT C OST ON THE SALE OF LAND 13582 SQ.FT THIS MEANS THE AO HAS ACCEPTED THE ASS ESSEES PLEA THAT PART OF THE LAND HAS BEEN SOLD AS UNDEVELOPED AS LOWER VALUE. T HAT IS WHY HE HAS NOT DISPUTED THE SALE PRICE OF RS.2 LAC FOR 23980 SQ.FT . CLAIMED BY THE ASSESSEE FOR UNDEVELOPED LAND. AS SUCH THE OTHER CLAIM OF THE A SSESSEE THAT THE DEVELOPMENT COST INCURRED ONLY ON THE LAND SOLD AS DEVELOPED I.E. 13582 SQ.FT. HAS FORCE. THE AO CAN NOT TREAT THE MATTER PER HIS OWN SUIT WILL. WHEN THE SALE OF LAND AS DEVELOPED LAND AND UNDEVELOPED LAND HAS BEEN ACCEPTED THEN ASSESSEES PLEA THAT THE DEVELOPMENT COST HAS BEEN INCURRED ONLY ON THE LAND SOLD AS DEVELOPED LAND HAS TO BE ACCEPTED. THE AO HAS NOT POINTED OUT ANY DEFECT OR MADE ANY ENQUIRY OF ANY NATURE FROM ANY P ARTY WHOM ASSESSEE HAS SOLD LAND TO FIND OUT WHAT TYPE OF LAND THEY HAD PU RCHASED WHETHER THE SAME WAS DEVELOPED LAND OR UNDEVELOPED LAND AND ANY LOC AL ENQUIRY IN THIS MATTER THIS FACT IS EVIDENT FORM THE ASSESSMENT ORDER. WIT HOUT MAKING ANY ENQUIRY AND COLLECTING ANY EVIDENCE JUST JUMPING TO THE CONCLU SION BASED ON SUSPICION AND ASSUMPTION IS COMPLETELY WRONG AND CANNOT BE SUSTAI NED IN THE LAW. THERE IS NO COLLABORATIVE MATERIAL HAS BEEN BROUGHT BY THE AO T O SUBSTANTIATE THE ADDITION MADE BY HIM AND TO PROVE THE CLAIM OF THE ASSESSEE AS WRONG. IN MY OPINION SUCH ADDITION IS COMPLETELY DENIAL OF NATURAL JUSTI CE AND CANNOT BE SUBSTANTIATED IN THE EYES OF LAW. 4..2. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 3 5. THE LD. DR APPEARING ON BEHALF OF THE REVENUE HA S REITERATED THE OBSERVATIONS MADE BY THE AO IN THE ASSESSMENT ORDER AND CONTENDE D THAT THE PROPORTIONATE DISALLOWANCE MADE BY THE AO IS JUSTIFIABLE. THEREFO RE HE REQUESTED TO UPHOLD THE SAME. 6. ON THE OTHER HAND THE LD. COUNSEL APPEARIN G ON BEHALF OF THE ASSESSEE HAS HEAVILY RELIED ON THE ORDERS OF THE LD. CIT(A) AND FURTHER CONTENDED THAT THE AO IS NOT FAIR ENOUGH TO PROPORTIONATE THE DEVELOPMENT EXPEND ITURE WITHOUT BRINING OUT ANY MATERIAL ON RECORD THAT IT IS NOT RELEVANT TO THE L AND SOLD BY THE ASSESSEE. THEREFORE HE REQUESTED TO UPHOLD THE SAME. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD IT IS OBSERVED THAT THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD THAT A PART OF THE DEVELOPMENT EXPENDITURE INCURRED BY THE ASSESSEE IS RELATING TO THE UNSOLD PORTION OF THE LAND. IT IS FURTHER OBSERVED THAT THE ASSESSEE IS FOLLOWING MERCANTILE METHOD OF ACCOUNTING AND WHATEVER THE DE VELOPMENT EXPENDITURE INCURRED BY THE ASSESSEE HAS BEEN PROPERLY DEBITED BY THE AS SESSEE IN THE P&L ACCOUNT. THEREFORE THE OBSERVATIONS MADE BY THE LD. CIT(A) IS FAIR AND JUSTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. WE UPHOLD THE SAME A ND DISMISS THE APPEAL OF THE REVENUE. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.07.2011 SD/- SD/- [ ] [ . !. '# ] [ MAHAVIR SINGH ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (!# !# !# !#) )) ) DATE: 19.07.2011. R.G.(.P.S.) 4 '2 0 .3 4'3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S. AARDEE CREDIT PVT. LTD. 9 MANGOE LANE 2 ND FLOOR R.NO.11 KOLKATA- 700001. 2 THE D.C.I.T. CIRCLE-4 KOLKATA. 3. THE CIT 4. THE CIT(A)-IV KOLKATA 5. DR KOLKATA BENCHES KOLKATA /3 ./ TRUE COPY '2&:/ BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES