PRIME DEVELOPERS, MUMBAI v. ASST CIT PANVEL CIR, PANVEL

ITA 3356/MUM/2015 | 2009-2010
Pronouncement Date: 21-10-2016

Appeal Details

RSA Number 335619914 RSA 2015
Assessee PAN AAJFP5050A
Bench Mumbai
Appeal Number ITA 3356/MUM/2015
Duration Of Justice 1 year(s) 4 month(s) 19 day(s)
Appellant PRIME DEVELOPERS, MUMBAI
Respondent ASST CIT PANVEL CIR, PANVEL
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 21-10-2016
Assessment Year 2009-2010
Appeal Filed On 02-06-2015
Judgment Text
. . IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI BEFORE SHRI R.C.SHARMA A CCOUNTANT MEMBER ./ ITA NO . 3356 /MUM /20 1 5 ( / ASSESSMENT YEAR : 200 9 - 20 10 ) M/S PRIME DE VELOPERS A - 303 MAYUR CHS SADAWALA CROSS LANE BORIVALI (WEST) MUMBAI - 92 VS. ACIT PANVEL CIRCLE PANVEL ./ ./ PAN/GIR NO. : A A JFP 5050 A ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI BHADRESH DOSHI /REVENUE BY : SHRI PRADEEP KUMAR SINGH / DATE OF HEARING : 11 / 0 8 /2016 / DATE OF PRONOUNCEMENT 21/10 201 6 / O R D E R TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT (A) FOR ASSESSMENT YEAR 200 9 - 2010 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE I.T.ACT. 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO ACTION OF CIT(A) IN CONFIRMING THE ACTION OF AO OF TREATING THE REVISED RETURN OF INCOME FILED BY THE ASS ESSEE AS NOT VALID. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. IN THE CASE OF THE ASSESSEE THE ORIGINAL RETURN OF INCOME WAS FILED ON 30 - 9 - 2009 DECLARING INCOME OF RS.27 74 550/ - AND SUBSEQUENTLY A REVISED RETURN OF INCOME U/S.139(5) WAS FI LED ON 24 - 09 - 2010 DECLARING NIL INCOME. THE REVISED RETURN OF INCOME WAS FILED BECAUSE THE ASSESSEE WANTED TO CHANGE THE METHOD OF ACCOUNTING FROM PERCENTAGE BASIS TO PROJECT COMPLETION METHOD. ITA NO. 3356 /2015 2 4. THE REVISED RETURN OF INCOME U/S.139(5) OF THE ACT WAS DEN IED BY THE AO ON THE PLEA THAT THE ASSESSEE CANNOT CHANGE THE ACCOUNTING STANDARD ONCE ADOPTED BY THE ASSESSEE. 5. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ACTION OF AO. 6. I DO NOT FIND ANY MERIT IN THE ACTION OF LOWER AUTHORITIES INSOFAR AS BOTH T HE ORIGINAL RETURN AS WELL AS REVISED RETURN WAS FILED WELL WITHIN THE TIME PRESCRIBED U/S.139(1) AND 139(5) RESPECTIVELY. ACCORDINGLY I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND MATTER IS RESTORED BACK TO THE FILE OF AO FOR DECIDING AFRESH ON THE REV ISED RETURN FILED BY THE ASSESSEE. 7. THE ISSUE UNDER CONSIDERATION IS ALSO SQUARELY COVERED BY THE DECISION OF PUNE BENCH IN THE CASE OF SATISH H. PATEL 39 TTJ 458 WHEREIN THE BENCH HELD AS UNDER : - THE ISSUE FOR CONSIDERATION IS AS TO WHETHER THE ASSES SEE HAVING FILED HIS RETURN OF INCOME COULD CHANGE THE METHOD OF ACCOUNTING. ADMITTEDLY THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME AND THE INCOME WAS DECLARED ON THE BASIS OF WIP. HOWEVER BY FILING THE REVISED RETURN THE ASSESSEE ADOPTED THE METHO D OF ACCOUNTING AS PROJECT COMPLETION METHOD FOR WORKING OUT THE PROFIT. IT IS ALSO AN ADMITTED POSITION THAT THE ACCOUNTING PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION WAS THE FIRST YEAR OF BUSINESS OF THE ASSESSEE. IT IS TRUE THAT THE ASSE SSEE REALISED HIS MISTAKE AND CHANGED THE METHOD OF ACCOUNTING BONA FIDE. EARLIER THE INCOME WAS DECLARED ON THE BASIS OF WIP AND SUBSEQUENTLY THE ASSESSEE ADOPTED THE METHOD OF ACCOUNTING AS PROJECT COMPLETION METHOD FOR WORKING OUT PROFIT. IT IS ALSO T RUE THAT PROJECT COMPLETION METHOD OF ACCOUNTING IS WELL RECOGNISED METHOD AND THE ASSESSEE WAS FOLLOWING THIS SYSTEM IN SUBSEQUENT YEARS WHICH WAS ACCEPTED BY THE DEPARTMENT INCLUDING THE ASST. YR. 1996 - 97. THE ASSESSEE CAN CHANGE ONE SYSTEM OF ACCOUNTIN G TO ANOTHER SYSTEM OF ACCOUNTING BEFORE THE ASSESSMENT IS COMPLETED. WHERE ALL THAT THE ASSESSEE HAD DONE WAS TO MAKE A FINAL SET OF BOOKS ON ONE METHOD AND BEFORE ANASSESSMENT HAD BEEN MADE CORRECTED THAT METHOD THE AO DID NOT COME INTO PICTURE AT ALL ON THE AROUND OF OBJECTION TO A CHANGE OF METHOD OF ACCOUNTING. THE AO HAS TO CONSIDER WHETHER THE REVISED RETURN WAS BASED ON PROPER METHOD OF ACCOUNTING. IN VIEW OF REVISED RETURN THE INCOME ASSESSABLE IN THE HANDS OF THE ASSESSEE IS LOSS OF RS. ITA NO. 3356 /2015 3 33 363. THE AO IS DIRECTED TO COMPUTE THE INCOME ACCORDINGLY. - KWALITY OVERSEAS EMPLOYMENT CORPORATION VS. ITO (1984) 7 ITD 689 (BOM) RELIED ON. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN CO URT ON THIS 21/10/2016 SD/ - ( R.C.SHARMA ) / ACCOUNTANT MEMBER MUMBAI ; DATED 21/10/2016 . . /PKM . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER / ( ASSTT. REGISTRAR) / ITAT MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CI T(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE. //TRUE COPY//