LOKHANDWALAL CONSTRUCTION INDUSTRIES P.LTD, MUMBAI v. ADDL CIT RG 9(2), MUMBAI

ITA 6013/MUM/2010 | 2007-2008
Pronouncement Date: 22-04-2014 | Result: Allowed

Appeal Details

RSA Number 601319914 RSA 2010
Assessee PAN AAACL0941J
Bench Mumbai
Appeal Number ITA 6013/MUM/2010
Duration Of Justice 3 year(s) 8 month(s) 18 day(s)
Appellant LOKHANDWALAL CONSTRUCTION INDUSTRIES P.LTD, MUMBAI
Respondent ADDL CIT RG 9(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 22-04-2014
Date Of Final Hearing 22-04-2014
Next Hearing Date 22-04-2014
Assessment Year 2007-2008
Appeal Filed On 03-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH MUMBAI BEFORE S/SHRI D.MANMOHAN VICE-PRESIDENT AND N.K.BILLAIYA ACCOUNTANT MEMBER . . . ./I.T.A.NO.6013/MUM/2010 ( # / ASSESSMENT YEAR: 2007-08) LOKHANDWALA CONSTRUCTION INDUSTRIES PVT. LTD. PLOT NO.48 INDRANARAYAN ROAD SANTACRUZ (W) MUMBAI-400054 / VS. ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 9(2) AAYAKAR BHAVAN 2 ND FLOOR M.K.ROAD MUMBAI-400020 ./ ./PAN/GIR NO. : AAACL0941J ( * / APPELLANT) .. ( + * / RESPONDENT) AND ./I.T.A.NO.6654/MUM/2010 ( # / ASSESSMENT YEAR: 2007-08) ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 9(2) AAYAKAR BHAVAN 2 ND FLOOR M.K.ROAD MUMBAI-400020 / VS. LOKHANDWALA CONSTRUCTION INDUSTRIES PVT. LTD. PLOT NO.48 INDRANARAYAN ROAD SANTACRUZ (W) MUMBAI-400054 * / ASSESSEE BY : SHRI D P BADANI + * 1 /REVENUE BY : SHRI S J SINGH 1 5 / DATE OF HEARING : 22.4.2014 1 5 /DATE OF PRONOUNCEMENT : 22.4.2014 / O R D E R PER N.K.BILLAIYA AM THESE CROSS-APPEALS BY THE ASSESSEE AND THE REVEN UE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-20 DATED 9.7.2010 PERTAINING TO ASSESSMENT YEAR 2007-08. BOTH THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. I.T.A.NO.6013/MUM/2010 I.T.A.NO.6654/MUM/2010 2 I.T.A.NO.6013/MUM/2010 2. ASSESSEE HAS RAISED SIX SUBSTANTIVE GROUNDS OF APPEAL. AT THE VERY OUTSET COUNSEL FOR THE ASSESSEE STATED THAT HE IS NOT PRE SSING GROUNDS NO.1 AND 2. THESE TWO GROUNDS WITH THEIR SUB-GROUNDS ARE ACCORDINGLY DISM ISSED. 3. GROUNDS OF APPEAL NO.III TO VI READ AS UNDER : (I) THE CIT APPEAL ERRED IN NOT DECIDING GROUND N O.5 RELATING TO FULL CREDIT NOT GIVEN FOR TAX DEDUCTED AT SOURCE (CREDIT FOR TD S IS GIVEN ONLY FOR RS.6 07 750/- AS AGAINST THE TOTAL CLAIM OF TDS TO THE EXTENT OF RS.38 27 253/-) II) THE APPELLANT PRAYS THAT THIS GROUND MAY BE DEC IDED ON MERIT; (IV) (I) CIT APPEAL ERRED IN NOT DECIDING THE G ROUND NO.6 RELATING TO REFUND OF RS.40 96 500/- NOT RECEIVED BY US; (II) THE APPELLANT PRAYS THAT THIS GROUND MAY BE DE CIDED ON MERIT. (V) (I) CIT APPEAL ERRED IN NOT DECIDING THE GR OUND NO.7 RELATING TO MISTAKE IN CHARGING OF INTEREST UNDER SECTION 234D AMOUNTING T O RS.2 45 790/- (II) THE APPELLANT PRAYS THAT THIS GROUND MAY BE DE CIDED ON MERIT. (VI) (I) CIT APPEAL ERRED IN NOT DECIDING THE G ROUND NO.8 RELATING TO MISTAKE IN CHARGING INTEREST U/S 234B AND 234C; (II) THE APPELLANT PRAYS THAT THIS GROUND MAY BE DE CIDED ON MERIT. 4. THE LD. COUNSEL POINTED OUT THAT THESE GROUNDS W ERE ALSO TAKEN BEFORE LD.CIT(A) BUT THE LD.CIT(A) HAS NOT ADJUDICATED THESE GROUNDS . THE LD. DR FAIRLY CONCEDED TO THIS. 5. WE HAVE CAREFULLY PERUSED THE ORDER OF LD.CIT( A) VIZ-A-VIZ GROUNDS OF APPEAL TAKEN BEFORE HIM QUA FORM NO.35. WE FIND THAT THE GRIEVANCE RAISED VIDE GROUNDS OF APPEAL NO.III TO VI BEFORE US WERE BEFORE THE LD. CIT(A) QUA GROUND NOS.5 6 7 AND 8. WE FIND THAT THE LD. CIT(A) HAS NOT DECIDED THESE GROUNDS WHICH WERE BEFORE HIM. WE ACCORDINGLY RESTORE THESE GROUNDS BACK TO THE FI LE OF LD. CIT(A). THE LD. CIT(A) IS DIRECTED TO DECIDE THE GRIEVANCE OF THE ASSESSEE AF TER GIVING REASONABLE AND FAIR OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND S OF APPEAL NO.III TO VI ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. I.T.A.NO.6013/MUM/2010 I.T.A.NO.6654/MUM/2010 3 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. I.T.A.NO.6654/MUM/2010 THE GRIEVANCE OF THE REVENUE READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION ADMINISTRATIV E EXPENSES TO THE EXTENT OF RS.5 05 29 782/- DESPITE MATERIAL AVAILABLE ON RECO RD SUGGESTING THAT EXPENSES TO THIS EXTENT ARE RELATABLE TO CONSTRUCTION WORK S TILL IN PROGRESS AND ARE THEREFORE NOT DEDUCTIBLE FOLLOWING THE METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT THE ADMINISTRATIVE E XPENSES ARE GENERAL IN NATURE AND CANNOT BE APPORTIONED TO ANY PARTICULAR PROJECT OVERLOOKING THE FACT THE ASSESSEE DOES NOT MAINTAIN BUILDING-WISE BOOKS OF A CCOUNTS AND THAT THE AO NECESSARILY HAD TO APPORTION THE ADMINISTRATIVE EXP ENSES INCURRED TO THE PROJECT IN PROGRESS WITH WHICH THEY HAD A CLEAR NEXUS; 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED 7. AT THE VERY OUTSET THE LD. DR DREW OUR ATTENTI ON TO THE LETTER WRITTEN BY THE ASSESSEE DATED 6.7.2012. IT IS THE SAY OF LD. DR T HAT THE ASSESSEE HAS FAIRLY CONCEDED TO THE STAND TAKEN BY THE AO AND HAS ACCEPTED THE DEP ARTMENTAL STAND THEREFORE THE APPEAL FILED BY THE REVENUE DESERVES TO BE ALLOWED . PER CONTRA THE COUNSEL FAIRLY CONCEDED TO THIS. 8. WE HAVE CAREFULLY PERUSED THE LETTER WRITTEN BY THE ASSESSEE DATED 6.7.2012. THE RELEVANT PART OF THE LETTER READ AS UNDER : THE CIT APPEAL ALLOWED THIS ISSUE IN OUR FAVOUR ST ATING THAT ADMINISTRATIVE EXPENSES OF RS.5 05 29 782/- IS A REVENUE EXPENSES DEDUCTIBLE IN THIS ACCOUNTING YEAR. AGGRIEVED BY THE ORDER OF CIT(A) DEPARTMENT IS IN APPEAL BEFORE YOU WITH A PRAYER THAT A ADMINISTRATIVE EXPENSES OF RS. 5 05 29 782/- IS RIGHTLY TREATED AS CAPITAL EXPENSE AND THEREFORE THE ORDER OF THE CIT(A) SHOULD BE SET ASIDE AND THE ORDER OF AO SHOULD BE RESTORED ON TH IS ISSUE. IN ANY CASE THE BENEFIT OF CAPITALIZATION IS AVAIL ABLE TO US IN SUBSEQUENT YEAR WHEN THE PROJECT IS OVER. THEREFORE IN ORDER TO BUY PEACE WE HAVE ACCEPTED THE DEPARTMENTAL STAND BY OFFERING THIS E XPENSE FOR DISALLOWANCE IN THIS ACCOUNTING YEAR AND CLAIMED THE BENEFIT OF THE CAPITALIZATION BY LOADING THE PROJECT COST IN SUBSEQUENT YEAR WHEN THE PROJECT I S COMPLETED I.T.A.NO.6013/MUM/2010 I.T.A.NO.6654/MUM/2010 4 WITHOUT GOING INTO THE MERITS OF THE APPEAL AND O N THE STRENGTH OF THIS LETTER OF THE ASSESSEE THE APPEAL FILED BY THE REVENUE IS ALLOWE D. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF APRIL 2014 1 8 9 : DAY OF APRIL 2014 1 SD SD ( . / D.MANMOHAN) ( . . /N.K.BILLAIYA ) / VICE-PRESIDENT / ACCOUNTANT MEMBER MUMBAI : ON THIS 2 ND DAY OF APRIL 2014 . # . ./ SRL SR. PS / COPY OF THE ORDER FORWARDED TO : 1. * / THE APPELLANT 2. + * / THE RESPONDENT. 3. F ( ) / THE CIT(A)- 4. F / CIT 5. G +##I 5 I / DR ITAT MUMBAI 6. / GUARD FILE. / BY ORDER TRUE COPY (ASSTT. REGISTRAR) 5 I /ITAT MUMBAI