The ITO, Ward-4(2),, Ahmedabad v. Jai Mahakali Infrastructure Pvt. Ltd.,, Ahmedabad

ITA 2290/AHD/2014 | 2007-2008
Pronouncement Date: 27-11-2017 | Result: Dismissed

Appeal Details

RSA Number 229020514 RSA 2014
Assessee PAN AACBJ0618B
Bench Ahmedabad
Appeal Number ITA 2290/AHD/2014
Duration Of Justice 3 year(s) 3 month(s) 18 day(s)
Appellant The ITO, Ward-4(2),, Ahmedabad
Respondent Jai Mahakali Infrastructure Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-11-2017
Date Of Final Hearing 12-06-2017
Next Hearing Date 12-06-2017
First Hearing Date 12-06-2017
Assessment Year 2007-2008
Appeal Filed On 08-08-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER THE ITO WARD - 4(2) AHMEDABAD (APPELLANT) VS JAI MAHAKALI INFRASTRUCTURE PVT. LTD. GROUND FLOOR SHYAM SHIKHAR COMPLEX L.B.S. ROAD BAPUNAGAR AHMEDABAD - 380024 PAN: AACBJ0618B (RESPONDENT) REVENUE BY : S H RI MUDI T NAGPAL SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 20 - 11 - 2 017 DATE OF PRONOUNCEMENT : 27 - 11 - 2 017 / ORDER P ER : AMARJIT SINGH ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08 AR ISES FROM ORDER OF THE CIT(A) - VIII AHMEDABAD DATED 22 - 05 - 2014 IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961; IN SHORT THE ACT . I T A NO . 2290 / A HD/20 14 A SS ESSMENT YEAR 200 7 - 08 I.T.A NO. 2290 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. JAI MAHAKALI INFRASTRUCTURE PVT. LTD. 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEA L: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 36 07 210/ - MADE ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK. HOWEVER THE ASSESSING OFFICER RESTRICTED THE DISALLOWANCE TO RS.83 75 488/ - S UBJECT TO THE AVAILABLE INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF TH E ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 3. IN THIS CASE ASSESSEE HAS FILED RETURN OF INCOME DECLARING LOSS OF RS. 9 16 608/ - ON 15 TH FEB 2013. THE SAME WAS ACCEPTED DURING ASSESSMENT U/S. 143(3) MADE ON 12 TH NOVEMBER 2009. SUBSEQU ENTLY THE CASE WAS REOPENED U/S. 147 OF THE ACT BY ISSUING OF NOTICE U/S. 148 ON 26TH MARCH 2012 STATING THAT THERE WAS DIFFERENCE IN CLOSING STOCK OF RS. 36 0 7 210/ - . THE ASSESSEE HAS SU BMITTED THAT THERE WAS NO UNDER - STATEMENT OF CLOSING STOCK AND THE REASON OF LOSS FOR THE WAS ON ACCOUNT OF SALE OF LAND MADE DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE HAD CLOSING STOCK OF LAND IN THE PREVIOUS YEAR RELEV ANT TO T HE ASSESSMENT YEAR 2006 - 07 OF RS . 2 95 40 877/ - AND AFTER SALE OF PLOT IN THE ASSESSMENT YEAR 2007 - 08 OF RS. 17 61 444/ - THE NET STOCK OF LAND WAS REFLECTED AS RS. 2 41 72 223/ - AS AGAINST AGGREGATE CLOSING STOCK OF RS. 2 77 79 43 3/ - . 0/ - . THE REFOR E THE ASSESSING OFFICER ADDED RS. 36 07 210/ - TO THE TOTAL INCOME OF THE ASSESSEE . I.T.A NO. 2290 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. JAI MAHAKALI INFRASTRUCTURE PVT. LTD. 3 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: - 5.3 DECISION: - I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND SUBMISSION FILED BY APPELLANT. THE ASSESSING OFFICER HAS OBSERVED THAT APPELLANT HAS SHOWN OPENING STOCK AT RS. 2 95 40 8/7/ - WH EREAS SAL E OF PLOT IN A.Y. 2007 - 08 WAS RS. 1 7 61 444/ - AND AFTER REDUCING SALE VALUE OF PL OT SOLD DURING THE YEAR FROM OPENING STOCK OF LAND CLOSING STOCK IS WORKED OUT AT RS. 2 77 79 433 ( 2954877 - 1761444). AS APPELLANT HAD SHOWN CLOSING STOCK OF LAND AT RS.2 41 72 223 ADDITION OF RS. 36 70 210 WAS MADE. ON THE OTHER HAND APPELLANT HAS ARGUED THAT LAND ON WHICH PLOTTING ACTIVITY WAS CARRIED OUT WAS PURCHASED IN A.Y. 2005 - 06 AT COST OF RS. 2 74 75 165/ - AND AFTER CONSIDERING OTHER ANCILLARY COST OF RS. 28 29 600 INCURRED IN A.Y. 2006 - 07 TOTAL COST OF LAND WAS WORKED OUT AT RS. 3 03 04 7 65 AND AS AREA OF LAND WAS 20260.36 SQ.MT . AVERAGE COST OF LAND WORK ED OUT AT RS. 1495.761 PER SQ. M T. THUS THIS AVERAGE COST OF LAND PER SQUARE METER WAS CONSIDERED FOR VALUING CLOSING STOCK OF LAND ON YEAR TO YEAR BASIS FROM A.Y. 2006 - 07 2007 - 08 AND O NWARDS. AS APPELLANT HAS VALUED CLOSING STOCK AT COST VALUE ADDITION MADE BY ASSESSING OFFICER SHOULD BE DELETED. IT IS NOTED THAT APPELLANT HAS VALUED THE CLOSING STOCK OF LAND - AT RS. - 1495.761 PER SQUARE METER CONSIDERING COST OF LAND ALONG WITH OTHER CHARGES AND TOTAL AREA OF LAND. THE WORKING OF PER SQUARE METER COST OF LAND COMPUTED BY APPELLANT AS SUBMITTED BEFORE ASSESSING OFFICER IS TABULARISED HEREIN BELOW: - PARTICULARS AREA OF LAND(SQ. MFRS.) RATE PER SQ. MTRS. (RS.) AMOUNT (RS .) REMARKS LAND ACQUIRED ON 22.06.2004 20 260.36 1 356.10 2 74 75 165 COST INCURRED DURING F.Y. 2005 - 06 1 39.66 28 29 600 TOTAL THE AVERAGE RATE IS CALCULATED AFTER CONSIDERING THE TOTAL VALUE OF LAND AND TOLAL SQ MTRS. LAND SOLD DURING F.Y. 2005 - 06 510.70 837.44 4 27 682 CLOSING STOCK FOR F.Y. 2005 - 06 19 749.66 1 495.761 2 95 40 877 THE AVERAGE RATE PER SQ. MTRS. DERIVED ABOVE IS CONSIDERED I.T.A NO. 2290 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. JAI MAHAKALI INFRASTRUCTURE PVT. LTD. 4 LAND SOLD DURING F.Y. 2005 - 06 AND CREDIT MADE IN ACCOUNT OF F.Y. 2006 - 07 1700.85 1161.82 19 76 091 LAND SOLD DURING F.Y. 2006 - 07 1 888.38 932.78 17 61 444 CLOSING STOCK FOR F.Y. 2006 - 07 16 160.43 1 495.761 2 41 72 223 THE AVERAGE RATE PER SQ. MTRS. DERIVED ABOVE IS CONSIDER ED I IT IS CLEAR FROM THE ABOVE THAT THE APPELLANT HAS COMPUTED RATE PER SQUARE METER OF LAND ON SCIENTIFIC BASIS AND THIS RATE HAS BEEN CONSISTENTLY APPLIED ON CLOSING STOCK OF LAND IT IS AN UNDISPUTED FACT THAT APPELLANT HAS VALUED OPENING STOCK OF LAND AT RS.2 95 40 877/ - AFTER CONSIDERING RATE PER SQUARE METER OF - RS. 1 495.761 AND SAME RATE HAS BEEN CONSIDERED WHILE COMPUTING CLOSING STOCK OF LAND. IT IS A MATTER OF FACT THAT ASSESSMENT IN THE CASE OF APPELLANT FOR A.Y. 2006 - 07 WAS COMPLETED UND ER SECTION 143(3) ON 18 TH DECEMBER 2008 WHEREIN ASSESSING OFFICER HAS ACCEPTED VALUATION OF CLOSING STOCK AS COMPUTED BY APPELLANT. THEREFORE THERE IS NO REASON TO DEVIATE FROM SUCH VALUATION WHILE VALUING CLOSING STOCK OF LAND IN A.Y. 2007 - 08. I T IS PER TINENT TO MENTION THAT ASSESSING OFFICER HAS COMPUTED CLOSING STOCK BY SIMPLY REDUCING SALE VALUE FROM OPENING STOCK OF LAND VALUED AT COST WHICH IS PATENTLY INCORRECT AS CLOSING STOCK IS REQUIRED TO BE COMPUTED ON COST BASIS AND AFTER REDUCING COST OF GOO DS S OLD AND NOT SALE VALUE. THUS O N HOLISTIC CONSIDERATION OF ENTIRE FACTS APPELLANT HAS CORRECTLY COMPUTED VALU E OF CLOSING STOCK APPLYING METHODOLOGY ADOPTED FOR VALUING OPENING STOCK BY COST PER SQUARE METER HENCE ADDITION OF RS. 36 07 210/ - MADE BY A SSESSING OFFICER IS DELETED. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE AND PERUSAL OF MATERIAL ON RECORD WE OBSERVED THAT ASSESSEE HAS VALUED OPENING STOCK OF LAND AT RS.2 95 40 877/ - AFTER CONSIDERING RATE PER SQUARE METER OF - RS. 1 495.761 AND SAME RATE HAS BEEN CONSIDERED WHILE COMPUTING CLOSING STOCK OF LAND. ON THE OTHER HAND WHILE VALUING CLOSING STOCK O F LAND IN A.Y. 2007 - 08 THE A SSESSING OFFICER HAS COMPUTED CLOSING STOCK BY REDUCING SALE VALUE FROM OPENING STOCK OF LAND WHICH WAS VALUED AT COST .WE OBSERVED THAT ASSESSING OFFICER I.T.A NO. 2290 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. JAI MAHAKALI INFRASTRUCTURE PVT. LTD. 5 HAS COMPUTED IT INCORRECTLY AS CLOSING STOCK IS REQUIRED TO BE COMPUTE D ON COST BASIS AND AFTER REDUCING COST OF GOODS SOLD AND NOT SALE VALUE. WE CONSIDERED THAT LD. CIT(A) HAS CORRECTLY DEMONSTRATED IN THE TABLE IN THIS ORDER THAT THE RE IS NO INCONSISTENCY IN THE COMPUTATION OF CLOSING STOCK BY THE ASSESSEE . AFTER CONSIDE RING THE DETAILED FINDINGS OF THE LD. CIT (A) WE DO NOT FIND ANY ERR OR IN THE DECISION OF THE LD. CI T(A).T HEREF ORE THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE O PEN C OURT ON 27 - 11 - 201 7 SD/ - SD/ - ( R AJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 27 /11 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3 . CONCERNED CIT 4. CIT (A) 5. DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER/ /