Prerna Developers, Gandhinagar v. The ACIT.,GNR Circle,, Gandhinagar

ITA 2904/AHD/2009 | 2006-2007
Pronouncement Date: 29-07-2011 | Result: Allowed

Appeal Details

RSA Number 290420514 RSA 2009
Assessee PAN AAIFP5685J
Bench Ahmedabad
Appeal Number ITA 2904/AHD/2009
Duration Of Justice 1 year(s) 9 month(s) 6 day(s)
Appellant Prerna Developers, Gandhinagar
Respondent The ACIT.,GNR Circle,, Gandhinagar
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 29-07-2011
Date Of Final Hearing 22-07-2011
Next Hearing Date 22-07-2011
Assessment Year 2006-2007
Appeal Filed On 23-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBL E SHRI A.N.PAHUJA A.M.) I.T.A. NO. 2904/AHD./2009 : ASSESSMENT YEAR : 2006-2007 PRERNA DEVELOPERS GANDHINAGAR -VS- ACIT GANDHINAGAR CIRCLE GNR (PAN : AAIFP 5685J) (APPELLANT) (RESP ONDENT) I.T.A. NO. 3028/AHD./2009 : ASSESSMENT YEAR : 2006-2007 ACIT GANDHINAGAR CIRCLE GNR -VS- PR ERNA DEVELOPERS GANDHINAGAR (PAN : AAIFP 5685J) (APPELLANT) (RESP ONDENT) ASSESSEE BY : SHRI PRITESH SHAH A.R. DEPARTMENT BY : SHRI S.K.MEENA SR.D.R. O R D E R PER BENCH : THESE CROSS-APPEALS ARE AGAINST THE COMMON ORDER D ATED 07-08-2009 OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) GANDHI NAGAR FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE FIELD OF DEVELOPING CONSTRUCTION AND SALE OF RESIDENTIAL AND COMMERCIAL PROPERTIES AND THE MAIN ACTIVITY OF THE ASSESSEE IS TO PROCURE LAND T O DEVELOP AND CONSTRUCT RESIDENTIAL OR COMMERCIAL FLAT/SHOPS. FOR THE ASSESSMENT YEAR UNDE R APPEAL IT FILED THE RETURN OF INCOME ON 29.12.2006 DECLARING THE TOTAL LOSS AT RS .9 33 845/-. THE AO FRAMED THE ASSESSMENT UNDER SECTION 143(3) ON 26.12.2008 AT A TOTAL INCOME OF RS.49 33 155/-. IN THE ASSESSMENT ORDER THE AO MADE ADDITION AMOUNTIN G TO RS.6 53 000/- FOR UNEXPLAINED CREDIT IN CAPITAL ACCOUNT OF THE PARTNE RS AND ANOTHER ADDITION OF RS.52 14 000/- ON ACCOUNT OF UNEXPLAINED DEPOSITS F ROM 14 PARTIES. IN RESPECT OF FIRST ADDITION THE AO OBSERVED THAT THE ASSESSEE WAS ASKED TO PROVE THE ITA NOS.3028 & 2904-AHD-2009 2 CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION OF ADDITION OF RS.10 43 404/- TO CAPITAL ACCOUNTS OF THE PARTNERS WHICH INCLUDES INT EREST ALSO AND IN REPLY THE ASSESSEE HAS FURNISHED THEIR COPIES OF ACCOUNT BUT NOT THE C ONFIRMATION AND OTHER DETAILS RELATING TO THREE PARTNERS. HENCE THE AO MADE THE ADDITION OF RS.6 53 000/- SHOWN IN THE NAMES OF THREE PARTNERS UNDER SECTION 68 OF TH E ACT. IN RESPECT OF SECOND ADDITION THE AO PERUSED THE BALANCE-SHEET WHEREIN THE ASSESS EE HAS SHOWN BOOKING ADVANCE RECEIVED AT RS.1 61 10 212/- IN THE LIABILITY SIDE AND THE DETAILS THEREOF FURNISHED BY THE ASSESSEE REGARDING THE ADVANCES AGAINST BOOKING OF CERTAIN PROPERTY BEARING FLAT NO./SHOP NO. HAS BEEN SHOWN. THE AO OBSERVED THAT A GAINST SOME OF THE PARTIES NO DETAILS OF PROPERTY IS GIVEN. THOUGH THE AR CONTEND ED THAT THESE DEPOSITS ARE TOWARDS BOOKING BUT THE ASSESSEE HAS NOT FURNISHED ANY EVID ENCE TO SUBSTANTIATE ITS CLAIM. THEREFORE THE AO TREATED THESE DEPOSITS AS CREDIT ENTRIES FOR WHICH THE ASSESSEE HAS NEITHER FURNISHED THE CONFIRMATIONS NOR OTHER DETAI LS TO PROVE THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS IN RESPECT OF THE DEPOSITORS. THEREFORE THESE DEPOSITS AMOUNTING TO RS. 52 14 00 0/-HAVE BEEN TREATED BY THE AO AS UNEXPLAINED AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT. 3. ON APPEAL IN THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION OF RS.6 53 000/- AND CONFIRMED THE ADDITION OF RS.52 1 4 000/-. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL AGAINS T THE CONFIRMATION OF ADDITION OF RS.52 14 000/- UNDER SECTION 68 OF THE I.T. ACT IN RESPECT OF ADVANCE DEPOSITS. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APPEAL IS AGAINST DELETION OF RS.6 53 000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CREDIT UND ER SECTION 68 OF THE I.T.ACT. 4. AT THE TIME OF HEARING SHRI PRITESH SHAH A.R. APPEARED ON BEHALF OF THE ASSESSEE AND POINTED OUT THAT THE ASSESSEE IS A FIR M CONSISTING OF 10 PARTNERS. IN THE ASSESSMENT YEAR UNDER APPEAL VARIOUS PARTIES BOOKE D THE FLAT. OUT OF 88 PARTIES THE ASSESSEE FIRM WAS HAVING THE DISPUTE WITH 14 PARTIE S. THIS DISPUTE REACHED AMONG THE PARTNERS OF THE FIRM. THERE WAS A DIVISION OF TWO G ROUPS AMONGST THE PARTNERS BEING THREE PARTNERS (1) SRI UDAY R. PATEL (2) SRI SURES HBHAI N. PATEL AND (3) SRI JIKESH M. ITA NOS.3028 & 2904-AHD-2009 3 PATEL AND REST OF THE PARTNERS. SOME OF THE PARTNER S WERE IN FAVOUR OF DEMAND TERMS AND CONDITIONS PRICE NEGOTIATION FACILITIES DEMAN DED WHILE THE OTHERS WERE AGAINST SUCH DEMAND ON ACCOUNT OF 14 PERSONS FROM WHOM BOOK ING ADVANCE WAS TAKEN. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT FOR THIS REASON DETAILS COULD NOT BE SUBMITTED BEFORE THE AO. THE COUNSEL OF THE ASSESSE E FURTHER POINTED OUT THAT BEFORE THE LD. CIT(A) VARIOUS DETAILS COULD NOT BE SUBMIT TED WHICH RESULTED IN PASSING OF IMPUGNED ORDER BY THE LD. CIT(A) EX-PARTE QUA ASSESSEE. THE COUNSEL OF THE ASSESSEE FILED CERTAIN DOCUMENTS WHICH INCLUDE CONFIRMATION FROM NINE PARTIES AND COPIES OF ACCOUNT ETC. IN RESPECT OF REMAINING FIVE PARTIES. THE COUNSEL OF THE ASSESSEE POINTED OUT THAT DUE TO DISPUTE THIS COULD NOT BE FILED BE FORE THE AO. THEREFORE IN THE INTEREST OF JUSTICE THIS ADDITIONAL EVIDENCE BE ADMITTED AN D MATTER BE REMANDED TO THE FILE OF THE AO. THE COUNSEL OF THE ASSESSEE FURTHER STATED THAT HE HAS NO OBJECTION IF THE AO BE DIRECTED TO MAKE CROSS-VERIFICATION FROM ALL THE 14 CREDITORS BY ISSUING SUMMONS TO THEM OR MAKING NECESSARY VERIFICATION FROM THEIR AS SESSMENT RECORDS OR CONDUCTING ENQUIRY AS PROVIDED UNDER SECTION 68 OF THE I.T. AC T 1961. 4.1 IN RESPECT OF DELETION OF ADDITION OF RS.6 53 0 00/- THE COUNSEL OF THE ASSESSEE POINTED OUT THAT THE CONTROVERSY INVOLVED IN THIS R EVENUES APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE ALLAHABAD HIGH COURT IN TEH CASE OF INDIA RICE MILLS VS- CIT REPORTED IN 218 I TR 508 (ALL) WHEREIN IT WAS HELD THAT IN RESPECT OF CAPITAL CONTRIBUTION MADE BY THE PARTNERS IT WAS FOR THE PARTNERS TO EXPLAIN THE SOURCE OF DEPOSITS. THIS UNEXPLAINED DE POSIT IN NO CASE COULD BE THE INCOME OF THE ASSESSEE FIRM. HE ACCORDINGLY POINTE D OUT THAT THE VIEW TAKEN BY THE LD. CIT(A) IN DELETING THE ADDITION OF RS.6 53 000/- BE UPHELD. 5. ON THE OTHER HAND SHRI S.K.MEENA APPEARED FOR THE REVENUE AND POINTED OUT THAT ENOUGH OPPORTUNITY WAS ALLOWED BY THE AO TO EX PLAIN THE DEPOSIT OF 14 PARTIES. SINCE THIS WAS NOT DONE THE ADDITION WAS RIGHTLY M ADE AND THERE IS NO JUSTIFICATION WHATSOEVER FOR GIVING ONE MORE INNINGS TO THE ASSES SEE. WITH REGARD TO THE DELETION OF RS.6 53 000/- THE LD. D.R. POINTED OUT THAT BEFORE THE AO THE ASSESSEE HAS NOT PROVED THAT AMOUNT OF RS.6 53 000/- WAS RECEIVED FROM THE THREE PARTNERS NAMELY (1) SRI ITA NOS.3028 & 2904-AHD-2009 4 UDAY R. PATEL (2) SRI SURESHBHAI N. PATEL AND (3) SRI JIKESH M. PATEL. THEREFORE THIS ISSUE BE RESTORED TO THE FILE OF THE AO FOR THE PUR POSE OF FILING NECESSARY CONFIRMATION FROM THE PARTNERS. 6. AFTER HEARING BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE LD. CIT(A) PASSED THE IMPUGNED ORDER EX-PARTE QUA ASSESSEE. PRIMA FACIE IT APPEARS THAT DUE TO DISPUTE AMONGST THE PARTNE RS AND WITH ALLEGED 14 PARTIES WHO MADE THE DEPOSIT OF RS. 52 14 000/- CONFIRMATION ETC. COULD NOT BE FURNISHED BEFORE THE AO. WE THER EFORE IN THE INTEREST OF JUSTICE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) DELETING THE ADDITION OF RS.6 53 000/- AND CONFIRMING THE ADDITION OF RS.52 14 000/- AND RESTO RE THESE ISSUES TO THE FILE OF THE AO WITH THE DIRECTION THAT THE ASSESSEE SHOULD FURNISH THE COMPLETE DETAILS/ CONFIRMATION AND NECESSARY EVIDENCES. THE AO MAY VERIFY THE SAME CONDUCT THE NECESSARY ENQUIRY UNDER SECTION 68 OF THE ACT AND RE-ADJUDICATE BOTH THE ADDITIONS AFRESH IN ACCORDANCE WITH LAW.RESULTANTLY THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT FOR STATISTICAL PURPOSES THE BOT H THE APPEALS ARE TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE COURT ON 29.07.2011 SD/- SD/- (A.N.PAHUJA) (T.K. S HARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29/07/2011 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AH MEDABAD. TALUKDAR/ SR. P.S.