Sri Barun Roy Chowdhury, Kolkata v. I.T.O.,Ward - 53(4), Kolkata, Kolkata

ITA 2102/KOL/2009 | 2006-2007
Pronouncement Date: 21-05-2010

Appeal Details

RSA Number 210223514 RSA 2009
Bench Kolkata
Appeal Number ITA 2102/KOL/2009
Duration Of Justice 5 month(s) 10 day(s)
Appellant Sri Barun Roy Chowdhury, Kolkata
Respondent I.T.O.,Ward - 53(4), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 21-05-2010
Date Of Final Hearing 17-05-2010
Next Hearing Date 17-05-2010
Assessment Year 2006-2007
Appeal Filed On 11-12-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL 'B BENCH : KOLKATA (BEFORE HONBLE SRI D.K.TYAGI J.M. AND HONB LE SRI B.C.MEENA A.M.) I.T.A. NO. 2102 /KOL/2009 ASSESSMENT Y EAR : 2006-2007 SRI BARUN ROY CHOWDHURY VS ITO WARD-53( 4) KOLKATA (ACZPR 7223 F) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI SOUMITRA CHOWDHURY. RESPONDENT BY : SR I A.K.PRAMANICK. O R D E R PER SHRI B.C.MEENA A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)- XXXIII KOLKATA DATED 25.08.2009 FOR THE ASSESSMEN T YEAR 2006-07. 2. GROUNDS OF APPEAL RAISED ARE AS FOLLOWS : 1. THAT THE LD. CIT ERRED IN LAW AS WELL AS IN FACT IN UPHOLDING A.OS ORDER IN COMPLETING THE ASSESSMENT U/S 144 WITHOU T ISSUING ANOTHER NOTICE U/S 142(1) OR A SHOW CAUSE NOTICE SPECIFYING HIS INTENTION TO COMPLETE THE ASSESSMENT U/S 144 OF THE I.T.ACT 1961 FOR FAILURE OF THE ASSESSEE TO COMPLY WITH THE NOTICE ISSUED U/S 142(1) OF THE I.T.ACT. 2. THAT ON THE FACTS AND IN CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) ERRED IN FACT AS WELL AS IN LAW IN CHANGING THE APPELLANTS STATUS FROM THE DEVELOPER TO THAT OF THE CONTRACTOR ON MISINTERPRETATION OF THE DEVELOPMENT AGREEMENT BETWEEN THE APPELLANT AN D M/S SUGAM BUILDERS PVT. LTD. 3. THAT IN ANY EVENT THE LD. CIT(A) ERRED IN F ACT AS WELL AS IN LAW IN HOLDING THAT THE DEVELOPMENT AGREEMENT BETWEEN T HE APPELLANT AND M/S SUGAM BUILDERS PVT. LTD. WAS A CONTRACT BETWEEN T HE OWNER AND DEVELOPER FOR CONSTRUCTION ONLY. 4. THAT IN ANY EVENT THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN LAW AS IN FACT IN DECIDING THE APPEAL AG AINST THE APPELLANT BY APPLYING THE PROVISIONS OF SECTION 194C(2) IGNO RING THE FACT THAT THERE WAS NO EVIDENCE THAT THE A.O. WHILE PASSING THE ORDER APPLYING THE PROVISIONS OF SECTION 194C(1)(K) FAILED TO CONSID ER THE APPLICABILITY OF THE PROVISIONS OF SECTION 194C(2) IN THE ASSESSEES CA SE. 3. GROUND NO. 1 WAS NOT PRESSED DURING THE PLEA DINGS. HENCE THE SAME IS DISMISSED FOR NON-PROSECUTION. 2 4. WHILE PLEADING ON GROUND NOS. 2 3 & 4 THE LE ARNED A.R. SUBMITTED THAT THE ASSESSEE WAS DOING THE WORK OF DEVELOPER UNDER THE PROPRIETORSHIP CONCERN M/S ROY CHOWDHURY HOUSING DEVELOPERS DURING THE YE AR. THE ASSESSEE ENTERED INTO AN AGREEMENT FOR DEVELOPING THE LAND WI TH SUGAM BUILDERS & OTHERS AND SUSHILA MONDAL & OTHERS. THE CIT(A) AGREED T HAT THE PROVISIONS INVOKED BY THE A.O. OF SECTION 194C(I)(K) CAME INTO EFFECT FROM 1.6.07 AND THE SAME ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE. HOWEVE R HE HAS SUSTAINED THE ADDITION BY HOLDING THAT THE ASSESSEE WAS A CONTRACTOR A ND THE PROVISIONS OF SECTION 194C(2) ARE APPLICABLE IN THE ASSESSEES CASE AND HE DISALLOWED AS PER PROVISIONS OF SECTION 40(A)(IA) . HE PLEADED THAT THE ASSES SEE WAS A DEVELOPER WHICH IS EVIDENT FROM THE LICENCE GRANTED BY CALCUTTA MUN ICIPAL CORPORATION A COPY OF WHICH IS PLACED AT PAGE 6 OF THE PAPER BOOK. THE MUNICIPAL CORPORATION HAS NARRATED THE NATURE OF THE TRADE AS DEVELOPER . HE FURTHER PLEADED THAT THE ASSESSEE WAS TO GET 73% OF THE CONSTRUCTED AREA W HICH IS EVIDENT FROM CLAUSE 8 OF THE DEVELOPMENT AGREEMENT DATED 7 TH OCTOBER 2002 ENTERED WITH SUGAM BUILDERS PVT. LTD. HE FURTHER PLEADED THAT AS P ER CLAUSE REGARDING THE DEVELOPERS RIGHTS AS PER THE AGREEMENT THE AS SESSEE WAS PROVIDED EXCLUSIVE RIGHT TO BUILD UPON AND EXPLOIT THE COMMERCIA L PROPERTY BY CONSTRUCTING NEW BUILDINGS. THE ASSESSEE AS A DEVELOPER WAS ALSO HAVING RIGHTS TO MAKE ADVERTISEMENTS FIXING HOARDINGS AND SIGN BOARDS RELATING TO THE PUBLICITY FOR THE BENEFIT OR COMMERCIAL EXPLOITATION OF THE NE W BUILDING. THE ASSESSEE ALSO ENTERED INTO AN AGREEMENT FOR CONSTRUCTION OF BUILD ING WITH AASCON CREATION P. LTD. WHICH IS ALSO EVIDENT FROM PAGE 70 OF THE PAPER BOOK. FURTHER HE PLEADED THAT AS PER THE SALE AGREE MENT ENTERED INTO WITH THE PURCHASER THE ASSESSEE HAS BEEN SHOWN AS A DEVELO PER WHICH IS EVIDENT FROM PAGE NO. 78 OF THE PAPER BOOK WHICH IS AN AGREEMEN T FOR SALE DATED 11 TH APRIL 2004 WITH SMT. TANUSREE CHOWDHURY. FURTHER ALTH OUGH WITH THE INADVERTENT MISTAKE THE AUDITOR IN 3CD FORM HAS SHOWN THE AS SESSEE AS A CONTRACTOR IN THE ASSESSMENT YEAR 2006-07. HOWEVER IN THE IMMEDIA TE PRECEDING YEAR THE SAME AUDITOR HAS SHOWN THE ASSESSEE AS A DEVELOPER/PR OMOTER WHICH IS EVIDENT FROM PAGE NO. 129 OF THE PAPER BOOK WHICH IS A 3CD FOR M FOR THE ASSESSMENT YEAR 2005-06 AND HE VEHEMENTLY PLEADED THAT THE ROL E OF THE ASSESSEE WAS AS A 3 DEVELOPER AND NOT AS A CONTRACTOR. HENCE PROVISIO NS OF SECTION 194C(2) ARE NOT APPLICABLE. THE ADDITION MADE BY THE CIT(A) UNDER THE PROVISIONS OF SECTION 40(A)(IA) IS TOTALLY UNJUSTIFIED AND DESERVES TO BE DELETED. 5. ON THE OTHER HAND THE LEARNED D.R. RELIED ON T HE ORDER OF THE CIT(A). 6. AFTER HEARING BOTH THE SIDES AT LENGTH AND CONS IDERING THE FACTS OF THE CASE WE HOLD THAT THE PROVISIONS OF SECTION 194C(1)(K) CAME INTO EFFECT ONLY FROM 1.6.07 IN THE CASE OF AN INDIVIDUAL. THEREFORE T HESE PROVISIONS ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CON SIDERATION. FURTHER WE FIND THAT THE ASSESSEE HAD ENTERED INTO AGREEMENT WITH SUGA M BUILDERS P. LTD. FOR THE DEVELOPMENT OF THE LAND WHICH IS QUITE EVIDENT FRO M THE DEVELOPMENT AGREEMENT DATED 7 TH OCTOBER 2002. CLAUSE 8 OF THE AGREEMENT SHOWS THAT THE ASSESSEE WAS TO RECEIVE 73% OF THE CONSTRUCTED AREA 73% OF THE CAR PARKING SPACE 73% OF UNDIVIDED SHARE OF THE ROOFS OF THE TWO BLOCKS CONSTRUCTED FOR THE COMMON ENJOYMENT OF THE PARTIES AND 73% OF THE UNDIVID ED INDIVISIBLE SHARES IN THE LAND. THE DEVELOPER (ASSESSEE) WAS HAVING ABSOLUTE RIG HTS IN RESPECT OF THE ALLOCATED AREA. THE CLAUSE 8 READS AS UNDER : DEVELOPERS ALLOCATION SHALL MEAN THE REMAINING 73% OF THE CONSTRUCTED AR EA OUT OF THE 100% CONSTRUCTED AREA IN THE NEW BUILDINGS AND 73% OF THE CAR PARKING SPACE OUT OF THE 100% OF CAR PARKING SPACE AND 73% UNDIVI DED SHARE IN THE ROOFS OF THE SAID TWO BLOCKS OF BUILDINGS FOR COMMON E NJOYMENT OF THE PARTIES AND ALSO 73% OF UNDIVIDED INDIVISIBLE SHARE IN LAN D OF THE SAID PROPERTY AND A LIKE SHARE IN ALL COMMON FACILITIES AND AMENI TIES AVAILABLE TO THE NEW BUILDINGS AND WITH THE FITTINGS AND FIXTURES A ND ARRANGEMENTS AS STIPULATED IN SCHEDULE D BELOW. THE DEVELOPERS A LLOCATION SHALL BELONG ABSOLUTELY TO THE DEVELOPER AFTER PROVIDING FOR T HE OWNERS ALLOCATION AS AFORESAID AND TOGETHER WITH THE ABSOLUTE RIGHT OF THE DEVELOPER TO DEAL WITH THE SAME IN ANY WAY BUT WITHOUT IN ANY WAY AF FECTING THE RIGHTS AND INTERESTS OF THE OWNERS AND THE OWNERS ALLOCATION. FURTHER THE MUNICIPAL CORPORATION OF KOLKATA HA S ALSO GIVEN A LICENCE TO THE ASSESSEE AS A DEVELOPER WHICH IS EVIDENT FROM PAGE 6 OF THE PAPER BOOK. THE ASSESSEE ALSO ENTERED INTO AN AGREEMENT FOR CONSTR UCTION OF BUILDING WITH AASCON CREATION PVT. LTD. WHICH IS ALSO EVIDENT FROM PAGE 70 OF THE PAPER BOOK. FURTHER AS PER THE AGREEMENT OF THE SALE PLACED AT PAGE NO. 78 OF THE PAPER BOOK THE ASSESSEE HAS BEEN SHOWN AS A DEVELOPER. FROM THE FORM NO. 4 3CD FOR THE ASSESSMENT YEAR 2005-06 THE ASSESSEE H AS BEEN SHOWN AS A DEVELOPER AND PROMOTER. CONSIDERING ALL THESE FACTUAL AS PECTS AND PLEADINGS WE FIND THAT THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THE A SSESSEE AS A CONTACTOR. THEREFORE WE SET ASIDE THE ORDER OF THE CIT(A) A ND DIRECT TO DELETE THE ADDITION. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 1.05.2010 SD/- SD/- (D.K.TYAGI ) (B.C.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21.05.2010 COPY FORWARDED TO :- 1) ITO WARD-53(4) KOLKATA. 2) SRI BARUN ROY CHOWDHURY 38/A K.K.ROY CHOWD HURY ROAD KOLKATA. 3) CIT(A) KOLKATA. 4) CIT KOLKATA. 5) D.R. ITAT KOLKATA. BY ORDER ASSISTANT REGISTRAR BCD I.T.AT. KOLK ATA.