Callow Buildmart Pvt. ltd., New Delhi v. ITo, New Delhi

ITA 5055/DEL/2010 | 2006-2007
Pronouncement Date: 15-07-2011 | Result: Allowed

Appeal Details

RSA Number 505520114 RSA 2010
Assessee PAN AACCC9027E
Bench Delhi
Appeal Number ITA 5055/DEL/2010
Duration Of Justice 7 month(s) 29 day(s)
Appellant Callow Buildmart Pvt. ltd., New Delhi
Respondent ITo, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 15-07-2011
Date Of Final Hearing 08-07-2011
Next Hearing Date 08-07-2011
Assessment Year 2006-2007
Appeal Filed On 16-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.5055/DEL./2010 (ASSESSMENT YEAR : 2006-07) M/S. CALLOW BUILDMART PVT. LTD. VS. ITO WARD 3 ( 2) FLAT NO.1104 11 TH FLOOR NEW DELHI. 89 NEHRU PLACE NEW DELHI 110 019. (PAN : AACCC9027E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GOPAL NATHANI CA REVENUE BY : SHRI KRISHNA CIT DR ORDER PER B.C. MEENA ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT (APPEALS)-IV DELHI DATED 06.09.2010 FOR THE ASSESS MENT YEAR 2006-07. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE READ AS UNDE R :- 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS)-I V NEW DELHI HAS GROSSLY ERRED ON FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND IN LAW IN SUSTAINING THE ADDITION OF RS.2. 94 CRORES U/S 68 WITHOUT APPRECIATING THE FACT THAT THE ALLEGED D IFFERENCE OF RS.2.94 CRORES SINCE EXPLAINED IS CAUSED DUE TO R EGISTRATION OF LAND PURCHASE AGAINST REGISTRY NOS.17025 AND 17015 IN WRONG NAMES. 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS)-IV NEW DELHI HAS GROSSLY ERRED ON FACTS AND IN THE CIRCUMS TANCES OF THE ITA NO.5055/DEL./2010 2 CASE AND IN LAW IN NOT APPRECIATING THE FACT THAT A LLEGED TRANSACTIONS OF RS.2.94 CRORES WERE FOUND RECORDED IN THE BOOKS OF ACCOUNT IN APRIL 2006 HENCE BEFORE THE DUE DATE OF RETURN AND EVEN PRIOR TO THE CLOSE OF FIRST YEAR ACCOUNTS UNDE R THE COMPANIES ACT 1956. 3. THAT THE APPELLANT RESERVES THE RIGHT TO ADD AL TER AMEND OR VARY FROM THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. THE ASSESSEE HAS DECLARED THE BUSINESS AS BUILDE R. DURING THE YEAR THE ASSESSEE HAS SHOWN RECEIPT OF TWO UNSECURED LOANS ONE FROM M/S. DUCE PROPERTIES & SERVICES PVT. LTD. A-1/270 1 ST FLOOR SAFDARJUNG ENCLAVE NEW DELHI OF RS.9 70 84 284/- AND OTHER ONE WAS FROM M/ S. SHIKHAR REAL ESTATES PVT. LTD. A-1/270 1 ST FLOOR SAFDARJUNG ENCLAVE NEW DELHI OF RS.4 66 36 706/-. THE ADDRESS OF THE ASSESSEE COMP ANY IS THE SAME OF CREDITORS. THUS IT IS A GROUP CONCERN OF THESE CO MPANIES. THE CONFIRMATION AND THE BALANCE SHEET SUBMITTED OF THESE TWO LENDER S WERE HAVING THE DIFFERENCE VIS--VIS THE ASSESSEES BALANCE SHEET. THE ASSESSING OFFICER MADE THE ADDITION OF THE TOTAL UNSECURED LOAN RECEIVED I N ASSESSEES BOOKS OF ACCOUNT OF RS.14 37 20 990. THE CIT (A) AFTER ASKI NG THE REMAND REPORT FROM THE ASSESSING OFFICER DELETED THE ADDITION. HOWEVE R HE SUSTAINED AN ADDITION OF RS.2.94 CRORES ON ACCOUNT OF DIFFERENCE IN THE B ALANCE SHOWN IN THE ASSESSEES BOOKS OF ACCOUNT AND THESE TWO CREDITORS . ASSESSEE HAS TRIED TO EXPLAIN THE DIFFERENCE BY STATING THAT INCORRECT RE GISTRIES WERE MADE IN THE NAME OF M/S. AKASH REAL ESTATES CONSULTANTS ON 17.0 3.2006 AND M/S. UNIQUE ITA NO.5055/DEL./2010 3 REAL ESTATE ON 16.02.2005 AND THESE LANDS WERE TAKE N BACK TO THE ASSESSEE BY WAY OF FILING A CIVIL SUIT FOR WHICH DECREE AND SET TLEMENT WAS ISSUED IN 2008. THE LEARNED AR SUBMITTED THAT ASSESSEE ENTERED INTO AN AGREEMENT ALONG WITH OTHER ASSOCIATE COMPANIES WITH M/S. DUCE PROPERTIES & SERVICES PVT. LTD. AND M/S. SHIKHAR REAL ESTATES PVT. LTD. THESE WERE DEVE LOPER COMPANIES. THESE DEVELOPER COMPANIES WERE DIRECTLY MAKING THE PAYMEN T FOR THE PURCHASE OF LAND. AS PER THE AGREEMENT THE DEVELOPER COMPANY I.E. M/S. DUCE PROPERTIES & SERVICES PVT. LTD. AND M/S. SHIKHAR REAL ESTATES PVT. LTD. WERE TO PROVIDE INTEREST FREE FINANCE BY WAY OF ADVANCES TO THE ASS ESSEE COMPANY AND OTHER ASSOCIATE COMPANIES WHO WERE PART OF THE AGREEMENT TO THE EXTENT OF COST OF ACQUISITION OF LAND AND OTHER INCIDENTAL EXPENSES. THE LAND WAS TO BE DEVELOPED AND MARKETED AND SOLD BY THE DEVELOPER CO MPANY AT THEIR OWN COST RISK AND EXPENSES AND THE ASSESSEE COMPANY AND OTHE R ASSOCIATES WERE ENTITLED ONLY TO CONSIDERATION STIPULATED IN CLAUSE 10. AS PER CLAUSE 10 THE ASSESSEE AND OTHER ASSOCIATES WERE ENTITLED FOR PAY MENT OF RS.2 LACS PER ACRE WHICH WAS PAYABLE ON THE BOOKING OF SOLD OUT AREAS RECORDED BY THE DEVELOPER COMPANY. HE PLEADED THAT THE DIFFERENCE IN THESE F IGURES WERE RECONCILED IN THE SUBSEQUENT YEAR WHEN THE DECREE AND SETTLEMENT ISSUED IN FAVOUR OF THE ASSESSEE. 3. ON THE OTHER HAND LEARNED DR RELIED ON THE ORDE R OF THE CIT (A) AND PLEADED THAT THE DEVELOPER COMPANIES WHO HAVE ADVAN CED THE MONEY TO THE ITA NO.5055/DEL./2010 4 ASSESSEE WERE FUNCTIONING FROM THE SAME ADDRESS. T HE BALANCES OUTSTANDING AT THE LAST DATE OF THE FINANCIAL YEAR IN THEIR BOO KS WERE NOT TALLYING WITH THE BOOKS OF ASSESSEE. THE CLAIM IN RESPECT OF INCORRE CT REGISTRIES MADE IN THE NAME OF M/S. AKASH REAL ESTATES CONSULTANTS AND M/S . UNIQUE REAL ESTATE HAVE NOT BEEN VERIFIED. THE ASSESSEE HAS NOT BEEN ABLE TO RECONCILE HOW THE LANDS INTENDED TO BE PURCHASED IN THE ASSESSEES NA ME GET REGISTERED IN OTHER NAMES. HOW THE DECREE AND SETTLEMENT WITHOUT ANY REGISTRY DOCUMENT WERE SUFFICIENT TO TRANSFER THE TITLE OF THE LAND IN FAV OUR OF THE ASSESSEE. HE ALSO PLEADED THAT HOW THE FIGURE COULD TALLY ON THE LAST DATE WHEN THE LAND WAS NOT IN ASSESSEES NAME. 4. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE DEVELOPER COMPANIES WHO HAD ADVANCED THE MONEY TO THE ASSESSEE WERE FUN CTIONING FROM THE SAME PREMISES. ASSESSEE COMPANY AND DEVELOPER COMPANY W ERE OF THE SAME GROUP. HOWEVER THERE IS A DIFFERENCE BETWEEN THE O UTSTANDING BALANCE IN THE BOOKS OF DEVELOPER COMPANY AND THE BALANCE OUTSTAND ING IN THE ASSESSEES BOOKS OF ACCOUNT AT THE CLOSING OF THE YEAR. HOW A ND UNDER WHAT CIRCUMSTANCES THE LAND INTENDED TO BE PURCHASED BY ASSESSEE WITH HELP OF FINANCE FROM DEVELOPER COMPANY GOT REGISTERED IN DI FFERENCE NAME. WHETHER THESE WERE ASSOCIATE CONCERN OF THE SAME GROUP OR T HESE WERE COMPLETELY UNKNOWN OR OUTSIDER. IT IS NOT CLEAR HOW THE REGIS TRY GOT DONE IN THE NAME OF M/S. AKASH REAL ESTATES CONSULTANTS AND M/S. UNIQUE REAL ESTATE. WHAT IS ITA NO.5055/DEL./2010 5 THE CONSTITUTION OF THESE CONCERNS. HOW THESE CONC ERNS ARE RELATED WITH THE DEVELOPER COMPANY OR TO THE ASSESSEE. THESE ASPECT S REQUIRE TO BE ESTABLISHED BEYOND ANY DOUBT BEFORE ACCEPTING THE RECONCILIATIO N AS CLAIMED BY THE ASSESSEE. IN THE INTEREST OF JUSTICE AND EQUITY I T WOULD BE FAIR IF THE ISSUE IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO ASCERTAIN THE CORRECT FACTS AND DECIDE THE ISSUE AFRESH. ACCORDINGLY WE RESTO RE THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 15 TH DAY OF JULY 2011. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 15 TH DAY OF JULY 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IV NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.