THE ACIT CEN CIR-7, MUMBAI v. THE EVERSHINE BUILDERS PVT. LTD, MUMBAI

ITA 2827/MUM/2008 | 2002-2003
Pronouncement Date: 01-02-2010 | Result: Dismissed

Appeal Details

RSA Number 282719914 RSA 2008
Assessee PAN MARCH2009A
Bench Mumbai
Appeal Number ITA 2827/MUM/2008
Duration Of Justice 1 year(s) 9 month(s) 7 day(s)
Appellant THE ACIT CEN CIR-7, MUMBAI
Respondent THE EVERSHINE BUILDERS PVT. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 01-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 01-02-2010
Date Of Final Hearing 12-01-2010
Next Hearing Date 12-01-2010
Assessment Year 2002-2003
Appeal Filed On 24-04-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI RAJENDRA SINGH (AM) ITA NO.2827/MUM /2008 ASSESSMENT YEAR : 2002-03 ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-7 C.RANGE-2 8 TH FLOOR OLD CGO BLDG. ANNEXE M.K. ROAD MUMBAI-400 020. ..( APPELLANT ) VS. M/S. EVERSHINE BUILDERS PVT. LTD. 215 VEEN BEENA SHOPPING CENTRE GURU NANK BANDRA(W) MUMBAI-50. ..( RESPONDENT ) P.A. NO. (AAACE 2480 P) APPELLANT BY : SHRI NAVEEN GUPTA RESPONDENT BY : SHR I BEHARILAL O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DT.16.1.08 PASSED BY THE LD. CIT(A) FOR THE ASSESSM ENT YEAR 2002-03 TAKING FOLLOWING EFFECTIVE GROUND OF APPEAL. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.6 17 050/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CORPUS FUND COLLECTED BY THE ASSESSEE DURING THE YEAR WHEN THE ASSESSEE IS OFFER ING THE INTEREST EARNED ON CORPUS FUND FOR TAXATION AND THE ITA NO.2827/M/08 A.Y: 02-03 2 CORPUS FUND IS NOT TRANSFERRED TO THE SOCIETY EVEN AFTER A LONG PERIOD OF COMPLETION OF PROJECTS. 2. AT THE TIME OF HEARING BOTH PARTIES HAVE AGREED T HAT THE ISSUE UNDER CONSIDERATION IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE ASSESSEES GROUP CASE IN ACIT VS. M/S. SEAGREEN EVER SHINE BUILDERS PVT. LTD . IN ITA NO.3287/MUM/2008 FOR ASSESSMENT YEAR 2004-05 DATED 13 TH MARCH 2009 THEREFORE THE ISSUE MAY BE DECIDED ACCORDINGLY. 3. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND TH AT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF BUILDING CONSTRUCTION DISTRIBUTION OF FILMS AND HIRING OF STUDIO EQUIPMENTS FILED RETUR N DECLARING AN INCOME OF RS.6 29 547/-. DURING THE COURSE OF ASSESSMENT P ROCEEDING IT WAS INTERALIA OBSERVED BY THE AO THAT THE ASSESSEE H AD COLLECTED A SUM OF RS.10/-PER SQ.FT. FROM THE FLAT BUYERS AT THE T IME OF SALE OF FLAT AS CONTRIBUTION TOWARDS THE FUND CALLED CORPUS FUND F OR THE VARIOUS PROJECTS COMPLETED BY THE ASSESSEE IN VASAI CITY. THE AO A FTER CONSIDERING THE ASSESSEES REPLY WHICH WAS THE SAME AS SUBMITTE D IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2001-02 WHER EIN IN THE ASSESSMENT THE SAID CORPUS FUND WAS TREATED AS NOTHING BUT SALE CONSIDERATION OF THE FLATS SOLD BY THE ASSESSEE IN THE AY 2 001-02 ITA NO.2827/M/08 A.Y: 02-03 3 FOLLOWED THE SAME CONCLUSION AND ADDED THE AMOUNT OF RS. 6 17 050/- COLLECTED BY THE ASSESSEE AS CORPUS FUND AS ASSESSEES BUSINESS INCOME. ON APPEAL THE LD. CIT(A) WHILE CONCURRING WI TH THE DECISION OF LEARNED SETTLEMENT COMMISSION THAT THIS WOULD NOT F ORM PART OF ASSESSEES INCOME IN VIEW OF THE CLEAR PENAL LIABILITY PRE SCRIBED U/S.13 OF THE MOFA 1963 FOR KEEPING THESE ACCOUNTS OF CORPUS F UND SEPARATELY AND TRANSFER TO THE SOCIETY DELETED THE ADD ITION MADE BY THE AO. 4. IN M/S. SEAGREEN EVER SHINE BUILDERS PVT. LTD.(SUP RA) THE TRIBUNAL ON THE IDENTICAL ISSUE WHILE UPHOLDING THE O RDER OF THE LD. CIT(A) IN DELETING THE ADDITION HELD VIDE PARA-4 OF ITS ORDER DT.13 TH MARCH 2009 AS UNDER: 4. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND THE LD. COUNSEL WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE LD. CIT(A) IS TO BE UPHELD. IT IS THE FACT THAT THE ASSESSEE RECEIVED AFORESAID AMOUNT TOWARDS CORPUS FUND WHICH WAS SEPARATELY KEPT TO BE HANDED OVER TO THE SOCIETY BEING FORMED AND FOR THE AMOUNT COLLECTED THE ASSESSEE ACTS AS TRUSTEE FOR THE CO- OPERATIVE SOCIETIES TILL THE SOCIETIES ARE FORMED. SINCE THE ASSESSEE IS FOLLOWING THE PROVISIONS OF T HE MAHARASHTRA OWNERSHIP OF FLATS ACT 1963 THE CORPUS FUND CANNOT BE TREATED AS INCOME OF THE ASSESSEE. ACCORDINGLY ORDER OF THE LD. CIT(A) ON THIS ISSUE IS UPHELD. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT O N RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE ORDER OF THE T RIBUNAL(SUPRA) HOLD THAT THE CORPUS FUND OF RS.6 17 050/- COLLECTED BY THE ASSESSEE ITA NO.2827/M/08 A.Y: 02-03 4 FOLLOWING THE PROVISIONS OF MAHARASHTRA OWNERSHIP OF F LATS ACT 1963 IS NOT THE INCOME OF THE ASSESSEE AND ACCORDINGLY WE ARE IN CLINED TO UPHOLD THE FINDING OF THE LD. CIT(A) IN DELETING TH E SAME. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTED. 5. IN THE RESULT REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.02.2010. SD/- SD/- (RAJENDRA SINGH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED:01-02-2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR E BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. ITA NO.2827/M/08 A.Y: 02-03 5 ITA NO.2827/M/08 A.Y: 02-03 6 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 12.1.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 12.1.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 01-02-10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 03-02-10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER