Sridurga Condev Pvt. Ltd, Cuttack v. CIT, Cuttack

ITA 261/CTK/2010 | 2005-2006
Pronouncement Date: 25-01-2011

Appeal Details

RSA Number 26122114 RSA 2010
Assessee PAN AAFCS1449B
Bench Cuttack
Appeal Number ITA 261/CTK/2010
Duration Of Justice 6 month(s) 23 day(s)
Appellant Sridurga Condev Pvt. Ltd, Cuttack
Respondent CIT, Cuttack
Appeal Type Income Tax Appeal
Pronouncement Date 25-01-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 25-01-2011
Assessment Year 2005-2006
Appeal Filed On 02-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK () BEFORE . . HONBLE SHRI K.K.GUPTA ACCOUNTANT MEMBER. /AND . . . S HRI K.S.S.PRASAD RAO JUDICIAL MEMBER / I.T.A.NO. 261/CTK/2010 / ASSESSMENT YEAR 2005 - 06 SRIDURGA CONDEV PVT. LTD. KAIRAPARI KOTSAHI TANGI CUTTACK PAN: AAFCS 1449 B - - - VERSUS - COMMISSIONER OF INCOME TAX CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI P.R.MOHANTY/SASWAT ACHARYA ARS / FOR THE RESPONDENT: / SHRI A.K.GAUTAM DR / ORDER . . SHRI K.K.GUPTA ACCOUNTANT MEMBER. THE ASSESSEE IS IN APPEAL AGITATING THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX U/S.263. 2. THE LEARNED COUNSEL FOR THE ASSESSEE INITIATING ARGUMENT SUBMITTED THAT ON AN EARLIER OCCASION FOR THE ASSESSMENT YEAR 2004 - 05 TH E ASSESSEE HAD APPEALED BEFORE THE TRIBUNAL AGAINST THE ORDER U/S.263 WHICH WAS ALLOWED BY THE TRIBUNAL VIDE THEIR ORDER DT.12.6.2009 WHICH COPY HAS BEEN FURNISHED. IN VIEW OF THE LEARNED DR SUBMITTING THAT EVERY YEAR FOR CONSIDERATION UNDER THE PROVISION S OF SECTION 263 BECOMES A SEPARATE YEAR THEREFORE PROCEEDED TO MAKE SUBMISSION S FOR THE IMPUGNED ASSESSMENT YEAR. HE POINTED OUT THAT THE LEARNED CIT VIDE A SHOW CAUSE NOTICE SOUGHT TO INITIATE HIS REVISIONARY POWER UNDER THE PROVISIONS OF SECTION 263 B Y HOLDING THAT THE ASSESSMENT U/S.144 BY THE ASSESSING OFFICER WAS NOT ENTIRELY A BEST JUDGMENT ORDER AGAINST WHICH THE ASSESSEE HAD APPEALED BEFORE THE FIRST APPELLATE AUTHORITY AND PRIOR TO THE LEARNED CIT INITIATING PROCEEDINGS U/S.263 HA D WITHDRAWN THE SAME IN VIEW OF THE FACTUAL INTERPRETATION OF THE NOTINGS OF / I.T.A.NO. 261/CTK/2010 2 THE ASSESSING OFFICER HAD ALREADY BEEN CONSIDERED BY THE TRIBUNAL IN THE A Y 2004 - 05 I.E. IMMEDIATELY PRECEDING ASSESSMENT YEAR. FOR BELATEDLY FILING THE APPEAL BEFORE THE TRIBUNAL BY 31 DAYS T HE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED AN AFFIDAVIT WHICH INCORPORATES THE FACT THAT THE MANAGING DIRECTOR OF THE COMPANY HAD TO ACCOMPANY HIS WIFE TO MUMBAI FOR GETTING TREATMENT IN THE TATA CANCER HOSPITAL WHICH DISEASE SHE WAS SUFFERING. THE PAPERS WERE GOT SIGNED BY HIM IN MUMBAI WHICH CAUSED THE DELAY MAY THEREFORE BE CONDONED. 3. THE LEARNED DR LEFT THIS TO THE DISCRETION OF THE BENCH FOR CONSIDERATION. IN VIEW OF THE FACT AS BROUGHT ON RECORD THE DELAY IS CONDONED AND THE APPEAL IS PROCEE DED WITH FOR HEARING. 4. THE LEARNED COUNSEL SUBMITTED THAT THE LEARNED CIT HAS CATEGORICALLY NOTED IN THE LAST PAGE OF HIS ORDER THAT THE FINDING OF THE ASSESSMENT ORDER BEING PREJUDICIAL TO THE INTEREST OF REVENUE IS ERRONEOUS IS TWO FOLD. FIRST HE POIN TED OUT THAT THE RECEIPTS WHICH HA VE BEEN ACCOUNTED FOR ON ACCOUNT OF JOINT VENTURE ENTERED INTO WITH THE ASSESSEE WHETHER COULD BE SEGREGATED FOR THE PURPOSE OF TAXATION AND RATHER COULD BE BROUGHT TO TAX IN THE STATUS OF AOP BEING A SPECIFIC JOINT VENTUR E ENTERED INTO WITH THE ASSESSEE COMPANY WAS TO BE VERIFIED BY THE ASSESSING OFFICER WHICH HE DID NOT IN HIS ORDER U/S.144 CONSIDER WAS ONLY A VIEW . SIMILARLY THE LEARNED CIT WAS OF THE CONSIDERED VIEW THAT MAINTENANCE OF BOOKS OF ACCOUNT IN ORDER TO DETE RMINE THE VALUE OF CLOSING STOCK WAS MANDATORY UNDER THE PROVISIONS OF SECTION 145. THEREFORE THE LEARNED CIT HOLDING THAT FOR CONSIDERATION OF THESE FACTS ON LAW HAS TO BE RE - EXAMINED AND FRESH ASSESSMENT ORDER HAS TO BE FRAMED BY THE ASSESSING OFFICER FOR DETERMINING ASSESSABLE PROFITS FROM CONTRACT WORKS EXECUTED IN THE NAME OF THE JOINT VENTURE/IN THE COMPANYS OWN NAME / I.T.A.NO. 261/CTK/2010 3 AND CONSIDERATION OF VALUATION OF CLOSING STOCK OF MATERIAL. FOR THIS PROPOSITION THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE WRITTEN SUBMISSION MADE BEFORE THE CIT IN RESPONSE TO THE SHOW CAUSE NOTICE AND HAS ALSO COMPUTED THE VARIOUS FACTS AND FIGURES AVAILABLE IN THE STATEMENTS AS WERE NOTED BY THE ASSESSING OFFICER IN HIS ORDER U/S.144. HE POINTED OUT THAT THE ASSESSING OFFIC ER IN THE ORDER U/S.144 HAD BASICALLY NOTED THE CONTRACT RECEIPTS FROM THE JOINT VENTURE BY HIGHLIGHTING THE VERY AMOUNT WHICH HAD BEEN RECEIVED FROM SMG - RK - SD JOINT VENTURE WHICH WERE ELABORATELY CONSIDERED IN FIVE/SIX PAGES TO COME TO THE CONCLUSION THAT THE NATIONAL HIGHWAY AUTHORITY OF INDIA BEING CONTRACTEE WAS THE CONTRACT W AS TO BE RENDERED BY THE JOINT VENTURE HAD FURNISHED THE AMOUNTS IN THE COMPANY AND NOT THE JOINT VENTURE WHICH WAS IDENTIFIED BY THE ASSESSEE COMPANY FOR SEPARATE CONSIDERATION PURELY FOR ACCOUNTING THE INCOME GENERATED FROM THE JOINT VENTURE. IDENTICAL ISSUES HAVE BEEN DECIDED BY VARIOUS JUDICIAL AUTHORITIES WHICH WERE RELIED UPON BEFORE THE ASSESSING O FFICER AND THE LEARNED CIT HAD INSISTED ON REJECTING THE BOOKS OF ACCOUNT U/ S.145 FOR IDENTIFYING THE RECEIPTS OF THE JOINT VENTURE SEPARATELY AND THE ASSESSEE RENDERING OF CONTRACT WORK SEPARATELY. FOR THIS PURPOSE HE HELD THAT THERE WAS NO RETENTION MONEY SIGNIFICANT IN THIS CASE IN THE CONTRACT RECEIPTS OF JOINT VENTURE 22 64 45 025 WHICH RECEIPTS WERE TAXED BY HIM @10% INCLUDING THAT OF THE ASSESSEE - COMPANY AS WELL. 5. BY THIS PROPOSITION HE TRIED TO ARGUE THEREFORE THAT THE LEARNED CIT DIRECTED THE AO TO REVISE THE ASSESSMENT ORDER DE NOVO ASSESSMENT WITHOUT POINTING OUT THE ERROR OR PREJUDICE CAUSED TO THE INTEREST OF REVENUE. HE POINTED OUT THAT THE ASSESSMENT U/S.144 BEING A BEST JUDGMENT WAS MADE ON THE TECHNICAL GROUND THAT THE ASSESSING OFFICER HAD REJECTED THE BOOKS OF ACCOUNT FOR THE YEAR PRODUCED BEFORE HIM THEREFORE IMMEDIATELY SETTLES THE / I.T.A.NO. 261/CTK/2010 4 SCORE THAT THE ISSUES WERE DEALT WITH BY THE ASSESSING OFFICER IN ITS ENTIRETY AND THERE WAS NO CA U SE OF ALARM TO ISSUE A SHOW CAUSE NOTICE UNDER THE REVISIONARY POWERS OF THE CIT. WITH RESPECT TO THE SECOND ISSUE WITH RESPECT TO T HE VALUATION OF THE CLOSING STOCK THE LEARNED COUNSEL POINTED OUT THAT IT WAS NOT A CASE OF THE ASSESSEE TO EVALUATE THE CLOSING STOCK AS THE ASSESSEE DOES NOT HOLD WITH THE STOCKS AND ARE PART AND PARCEL OF THE WORKS CONTRACT CARRIED OUT BY IT. THE ASSES SEE WAS REQUIRED TO SUBMIT THE STOCK STATEMENT WHICH HE HAD DATED 28 TH MARCH FOR THE PURPOSE OF OBTAINING AN OVER - DRAFT LIMIT AGAINST STOCK IN ACCORDANCE WITH THE BANKING PRINCIPLES HAS BEEN MISCONSTRUED BY THE LEARNED CIT AS THE STOCK HELD BY THE ASSESSE E FOR THE PURPOSE OF OBTAINING LOAN ARE LOWER THAN THE AMOUNT AS DISCLOSED TO THE BANK. HE ARGUED THAT THE TOTAL CONTRACT RECEIPTS WHICH ARE ACCOUNTED FOR THEREFORE STOOD ENHANCED BY THE ASSESSING OFFICER TO INDICATE THAT THE INCOME OF THE ASSESSEE OUGHT T O BE 18% AS AGAINST 8% ACCEPTABLE AS INCOME FROM CONTRACTS. THE ASSESSING OFFICER THEREFORE REDUCED THE DEPRECIATION AMOUNTING TO 3.60 CRORES FOR ASSESSING THE INCOME OF THE ASSESSEE HAD BEEN TAKEN CARE OF BY REJECTING THE BOOKS OF ACCOUNT U/S.145 THEREFORE LEFT NO MATERIAL BEFORE THE LEA RNED CIT TO DIRECT THE AO FOR VALUATION OF THE CLOSING STOCK OF MATERIAL. HE POINTED OUT THAT THE MATERIAL IF ANY OVER AND ABOVE THE MATERIAL SHOWN AS HELD IN WORK - IN - PROGRESS OR ON THE BASIS OF BILLS RAISED BY THE ASSESSEE BEING RECEIVABLE COULD NOT U NDER ANY CIRCUMSTANCES BE SHOWN AS A LIABILITY TO BE CONSIDERED FOR INCOME THEREFORE SETTLES THE ISSUE THAT THE ASSESSING OFFICER WHO HAD ENHANCED THE INCOME TO 10% WAS OF THE BONAFIDE BELIEF THAT THERE WOULD BE NO FURTHER ENHANCEMENT IN THE WORK - IN - PROGRE SS OR THE MATERIAL LYING AT THE SITE NOT BELONGING TO THE ASSESSEE HAS BEEN TAKEN CARE OF BY HIM WHEN HE ENHANCED THE INCOME TO THE RETURNED INCOME OF 71 LAKHS TO 1.19 CRORES. THIS DIFFERENCE THEREFORE HAS NEITHER BEEN IDENTIFIED / I.T.A.NO. 261/CTK/2010 5 BY THE LEARNED CIT NOR DISPUTED BY THE ASSESSEE BEFORE THE CIT(A) AS WAS POINTED BY THE LEARNED DR WAS THE APPEAL WITHDRAWN PRIOR TO THE INITIATION OF THE PROCEEDINGS U/S.263. 6. IN SUPPORT OF HIS CONTENTION HE FILED THE JOINT VENTURE AMOUNT WITH SMG - RK - SD WHICH HAS BEEN SEPAR ATELY ASSESSED BY THE ACIT CHENNAI WHICH INCORPORATES THE TOTAL RECEIPTS FROM THE NH A UTHORITY OF INDIA THEREFORE SETTLES THE ISSUE I N FAVOUR OF THE ASSESSEE THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE COMPANY HAD BEEN ACCOUNTED FOR IN ACCORDANCE WITH THE PROVISIONS OF THE I.T.ACT IN SO FAR AS THE CREDIT FOR TAX DEDUCTION AT SOURCE ON THE GROSS RECEIPTS HAVE BEEN AVAILED BY THE JOINT VENTURE. THEREFORE THE QUESTION VISUALIZED BY THE LEARNED CIT IN HIS ORDER U/S.263 ONLY IS AN OBSERVATION WITHOUT GIVING ANY SPECIFIC DIRECTION TO THE ASSESSING OFFICER IN SO FAR AS THE GROSS BILLS RAISED BY THE ASSESSEE COMPANY AND THE CONTRACT RECEIPTS BY WAY OF JOINT VENTURE BUSINESS HAD BEEN ACCOUNTED FOR AND SPECIFICALLY DIRECT THE ASSESSING OFFICER TO ISSUE NOTICE U/S .133(6) TO NH A UTHORITY OF INDIA TO DETERMINE THE SAME. IN VIEW OF THE LEARNED CIT OBSERVATION THIS MAY BE ERRONEOUS BUT IT COULD NOT BE SUBJECTED TO CAUSE P REJUDICE TO THE REVENUE. HE SUBMITTED THE ORDER OF THE JOINT VENTURE I N VIEW OF THE FACT THE LEARNE D CIT HAS DIRECTED THE ASSESSING OFFICER TO OBTAIN INFORMATION WITH RESPECT OF THE JOINT VENTURE RECEIPTS FROM ASSESSMENT YEAR 2001 - 02 WHICH OTHERWISE HAS ALREADY BEEN TAKEN CARE OF BY THE ASSESSING OFFICER BY MAKING THE ASSESSMENT KEEPING IN VIEW THE ORD ER OF THE TRIBUNAL ON THE APPEAL BY THE ASSESSEE AGAINST ORDER U /S.263 AND THE FACT THAT THE INCOME OF THE JOINT VENTURE HAVE BEEN SEPARATELY ASSESSED BY THE ACIT CIRCLE 15 CHENNAI WHICH COPY IS ON RECORD. IN SUPPORT OF HIS CONTENTION HE HAS ALSO FILED C OPY OF DECISION IN THE CASE OF CIT V. VIKASH PLOYMER [194 TAXMAN 57 (DEL) ] WHICH INDICATES THAT THE ASSESSING OFFICER O N THE ENQUIRY OF THE GENUINENESS OF THE / I.T.A.NO. 261/CTK/2010 6 CAPITAL INVESTMENT OF TWO PARTNERS AND UNSECURED LOANS FURNISHED HAD ALREADY BEEN VERIFIED BY THE ASSESSING OFFICER INDIRECTLY TO THE SATISFACTION OF THE ASSESSING OFFICER FOR ASSESSING THE INCOME TO BE ENHANCE D AND INCORPORATED THE SAME COULD NOT BE CALLED INTO QUESTION BY THE CIT IN VIEW OF THE FACT THAT THE ASSESSEE HAD TAKEN CARE OF REFLECTIN G THE SAME IN TWO SEPARATE ASSESSMENT S WAS HELD UNDER THE PROVISIONS OF SECTION 263 NOT RIGHTLY INVOKED. A COPY OF THE ORDER HAS BEEN FURNISHED AND PLACED ON RECORD. HE THEREFORE PRAYED THAT THE ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL STANDS SQUARELY COVERED BY VARIOUS DECISIONS ON THE FACTS AND CIRCUMSTANCES AS ENUMERATED ABOVE IN SO FAR AS THE ISSUE IN RESPECT TO THE VALUATION OF STOCK STANDS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006 - 07 WHEN THE TRIBU NAL WAS PLEASED TO HOLD THAT THE STOCK STATEMENT GIVEN TO THE BANK WAS ON THE MARKET VALUE WHICH HAS NOT BEEN DISPROVED. THE ASSESSING OFFICER HAD NOT BEEN ABLE TO ESTABLISH THE DIFFERENCE IN PHYSICAL STOCK AS DISCLOSED IN THE BALANCE SHEET AND AS DISCLOSE D TO THE BANK THEREFORE DID NOT REQUIRE REVISIONARY CONSIDERATION BY THE CIT BY DIRECTING THE ASSESSING OFFICER THEREFORE WITHOUT SPECIFIC FINDING TO IDENTIFY THE CLOSING STOCK OF MATERIAL. 7. THE LEARNED DR INITIATING HIS ARGUMENT SUBMITTED THAT THE GR OUNDS RAISED BY THE ASSESSEE ARE BASICALLY AGITATING THE ACTION OF THE LEARNED CIT IN CONSIDERING THE RATE OF RETURN ON CONTRACT WORK AT 18% AS AGAINST NO RATE OF INTEREST. THEY ALSO OBJECTED TO THE ASSESSING OFFICER REJECTING THE BOOKS OF ACCOUNT U/S.145 AND ESTIMATING THE PROFIT U/S.144 WHICH INDIRECTLY ASSUMES CONSENT TO THE REVISIONARY POWER BY THE LEARNED CIT ADOPTED U/S.263. HOWEVER THEY HAVE RAISED THE ISSUE FOR INITIATION OF PROCEEDINGS U/S.263 ON THE SET OF REJECTED ACCOUNT WAS VIOLATIVE TO THE RA TIO OF THE REPORTED JUDGMENT IN THE CASE OF INDWELL CONSTRUCTIONS V. CIT (232 ITR 776) BY THE HONBLE / I.T.A.NO. 261/CTK/2010 7 ANDHRA PRADESH HIGH COURT. THEY HAVE ALSO RAISED THE ISSUE REGARDING STOCK IN TRADE NOT HELD BY THE COMPANY BUT AT THE SAME TIME IT IS EITHER MATERIAL LYI NG AT SITE OR INCORPORATED IN THE WORK - IN - PROGRESS ON THE BASIS OF BILLS SUBMITTED TO THE CONTRACTEES. HE POINTED OUT THAT THE LEARNED CIT IN HIS ELABORATE ORDER U/S.263 HAS POINTED OUT VARIOUS MISTAKES AND ERRORS COMMITTED BY THE AO BY ACCEPTING THE BOOK RESULTS BY ACCEPTING THE SAME ENHANCING THE INCOME THEREFROM DOES NOT INDICATE THE AMOUNT TO BE TAXED AS JOINT VENTURE OR IN THE HANDS OF THE ASSESSEE. THE LEARNED CIT WAS APPRISED OF THE F ACT OF ASSESSEE DERIVING BENEFIT OF PARKING HIS FUNDS IN JOINT VE NTURE WHICH THEREFORE DOES NOT INDICATE THE REAL INCOME WAS TO BE ASCERTAINED BY OBTAINING INFORMATION UNDER THE PRO VISIONS OF SECTION 133(6) FROM NH A UTHORITIES OF INDIA. HE WAS ALSO DIRECTED TO OBTAIN INFORMATION WITH RESPECT TO THE JURISDICTION OF THE J OINT VENTURE ASSESSED IN CHENNAI AS PER THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM AND TO GIVE RECONCILIATION TO THE DISCREPANCY IN THE STOCK STATEMENT AS GIVEN TO THE BANK ON 28.3.2005 VIS - - VIS THE AMOUNT SHOWN AS ON 31.3.2005.HE FULLY SUPPORTED THE ORDER OF THE LEARNED CIT FOR HIS PART SUBMISSION IN SO FAR AS THE CONTENTION OF THE ASSESSEE BEFORE THE TRIBUNAL HAS BEEN TO GO FOR THE REVISIONARY POWER OF THE CIT U/S.263 /264 VIS - - VIS THE OBSERVATIONS MADE BY THE ASSESSING OFFICER FOR WHICH REASONS BES T KNOWN TO IT WERE APPEALED BEFORE THE CIT(A) AND WAS LATER WITHDRAWN. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONTINUING TO RESOLVE THE ISSUE S INVOLVED IN THE REVISIONARY AUTHORITY BY IN ASSUMING JURISDICTION U /S.263 WE ARE INCLINED TO HOLD THAT THE LEARNED CIT IN HIS ORDER HAS NOT CATEGORICALLY POINTED OUT ANY ERROR OR OMISSION ON THE PART OF THE ASSESSING OFFICER WHICH MAY BE PREJUDICIAL TO THE INTEREST OF REVENUE. THE LEARNED COUNSEL BEFORE US HAS / I.T.A.NO. 261/CTK/2010 8 MADE AN EF FORT TO POINT OUT THAT ONLY ON THE BASIS OF AN EARLIER ORDER THE ASSESSING OFFICER HAS BEEN DIRECTED TO ESTABLISH CATEGORICALLY VARIOUS FACTORS LEADING TO JOINT VENTURE FROM THE ASSESSMENT YEAR 2001 - 02. THIS CLEARLY INDICATES THAT THE EARNED CIT WAS APPRI SED OF THE FACT THAT THE ASSESSING OFFICER HAVING DELIBERATED ON THE ISSUE WITH RESPECT TO TAXATION OF INCOME FROM JOINT VENTURE HAD ALREADY ENHANCED THE INCOME OF THE ASSESSE OVER AND ABOVE THE JOINT VENTURE THEREFORE COULD NOT BE SUBJECTED TO TAX AGAIN A GAINST WHICH THE ASSESSEE HAD FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AND LATER WITHDRAWN. THIS ONLY RAISED A SUSPICION IN THE MIND OF THE LEARNED CIT THAT TIME WAS APPROPRIATE FOR INITIATING THE REVISIONARY POWERS U/S.263 WHEREIN HE TRIED TO BRI NG ON RECORD THE VARIOUS FACTS THAT HAD NOT BEEN DISPUTED EITHER BY THE ASSESSING OFFICER OR BY THE ASSESSEE BEFORE HIM. THE LEARNED CIT THEREFORE WAS INCLINED TO SET ASIDE THE ORDER OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION WHICH THE ASSESSING OFFI CER HAD FRAMED U/S.144 TO THE BEST OF HIS JUDGMENT ON THE BASIS OF INFORMATION ALREADY AVAILABLE ON RECORD. IT WAS A DIRECTION TO BRING ON THE VARIOUS FACTS FROM THE ASSESSMENT YEAR 2001 - 02 ONWARDS THEREFORE WAS NOT PERTAINING TO THE IMPUGNED ASSESSMENT YE AR THAT THE LEARNED DR BEFORE US AT THE THRESHOLD POINTED OUT THAT EVERY YEAR HAS TO BE SEPARATELY CONSIDERED IN VIEW OF THE FACT THAT THE TRIBUNAL HAD ALREADY CONSIDERED THE ASSESSEES APPEAL ON THE ORDER U/S.263 FOR THE ASSESSMENT YEAR 2003 - 04 AND 2004 - 05 WHICH FORM PART OF THE GROUP OF ORDERS WHICH THE LEARNED CIT OBSERVED WAS TO BE CONSIDERED AGAIN FROM THE ASSESSMENT YEAR 2001 - 02. THEREFORE AN ERROR HAS NOT BEEN SPECIFICALLY POINTED OUT EITHER BY THE LEARNED CIT OR BY THE ASSESSING OFFICER TO ACT UP ON ON THE DIRECTION FROM THE CIT. THE ASSESSING OFFICER IN TURN HAS ALREADY CONSIDERED THE TAXABILITY OF THE JOINT VENTURE AS PER THE LEARNED CIT GIVING DIRECTION TO ESTABLISH BY IS SUING SUMMONS U/S.133(6) TO NH A UTHORITIES OF / I.T.A.NO. 261/CTK/2010 9 INDIA HAVING ACCEPTING THE JO INT VENTURE INCOME TO BE SEPARATELY TAXED WHICH WAS NOT THE CASE OF THE ASSESSING OFFICER TO ENHANCE THE INCOME PERTAINING TO THE JOINT VENTURE TO BE TAXED AND CLUBBED TO THE INCOME AS RETURNED BY THE ASSESSEE. THE CONTRACT RECEIPTS FROM JOINT VENTURE ON THE BASIS OF VARIOUS FACTS AS NOTED BY THE ASSESSING OFFICER HA VE BEEN TAKEN AT 22.64 CRORES THEREFORE DOES NOT LEAVE ANY ROOM FOR ESTABLISHING BY WAY OF REASSESSMENT FOR THE AMOUNTS RECEIVED BY THE ASSESSEE APART FROM THE JOINT VENTURE WERE TO BE TAXED I N ITS HANDS SEPARATELY AS THE ASSESSING OFFICER HAS ENHANCED THE INCOME BY TAXING 10% OF THE GROSS RECEIPTS. IN OTHER WORDS THE LEARNED CIT HAS NOT BEEN ABLE TO ESTABLISH ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER WHICH HAS CAUSED PREJUDICE TO THE IN TEREST OF REVENUE ON THE ISSUES NOTED IN THE SHOW - CAUSE IN SO FAR AS ALL THE DETAILS AND THE FACTUAL POSITION IN RESPECT OF THE JOINT VENTURE INCLUDING THAT OF THE RETENTION MONEY HELD AGAINST WORK - IN - PROGRESS OR THE MATERIAL LYING IN SITE HAS BEEN TAKEN NOTE OF BY THE ASSESSING OFFICER WHICH IN OUR VIEW WOULD NOT REQUIRE FURTHER FRESH ASSESSMENT WITHOUT SPECIFIC DIRECTION OF THE CIT ON THE BASIS OF A PURPORTED ERROR IN THE ORDER. THE LEARNED CIT IN HIS ORDER HAS GIVEN CLEAR PERMISSION TO THE ASSESSING O FFICER TO INITIATE PROCEDINGS AFRESH BY MAKING ROVING ENQUIRY BEGINNING FROM ASSESSMENT YEAR 2001 - 02 WHICH IN OUR CONSIDERED VIEW DOES NOT HOLD PROPER ON THE BASIS OF THE SHOW CAUSE NOTICE ISSUED TO THE ASSESSE FOR INITIATING PROCEEDINGS U/S.263 IN THE FIR ST PLACE. THE SUSPICION AROSE ON THE BASIS OF ASSESSEE WITHDRAWING ITS APPEAL BEFORE THE CIT(A) INSPITE OF HAVING BEEN SUBJECTED TO ENHANCED TAX UNDER THE PROVISIONS OF SECTION 144 WHICH ENHANCED INCOME IS CONTRACT RECEIPTS AGAINST WORK - IN - PROGRESS THEREFO RE CANNOT BE CAUSE OF ALARM FOR MAKING A FRESH ASSESSMENT LEADING TO SITUATION WHEN THE DEMAND U/S.144 WOULD REDUCE. FINDING NO MERIT IN THE ORDER OF THE LEARNED CIT WE HAVE NO HESITATION IN QUASHING THE ORDER OF THE LEARNED CIT. / I.T.A.NO. 261/CTK/2010 10 THE ORDER OF THE LEARNED CIT IS QUASHED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25 TH JANUARY 2011 S D/ - S D/ - ( . . . ) ( K.S.S.PRASAD RAO) JUDICIAL MEMBER (. . ) (K.K.GUPTA) ACCOUNTANT MEMBER. () DAT E: 25 T H JANUARY 2011 - COPY OF THE ORDER FORWARDED TO: 1. / THE APPELLANT : SRIDURGA CONDEV PVT. LTD. KAIRAPARI KOTSAHI TAN GI CUTTACK 2 / THE RESPONDENT: COMMISSIONER OF INCOME TAX CUTTACK. 3. / THE CIT 4. ()/ THE CIT(A) 5. / DR CUTTACK BENCH 6. GUARD FILE . / TRUE COPY / BY ORDER [ ] SENIOR PRIVATE SECRETARY ( ) ( H.K.PADHEE ) SENIOR.PRIVATE SECRETARY.