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Income Tax Appellate Tribunal, ‘’ C’’ BENCH, AHMEDABAD
Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED
आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-4, Ahmedabad dated 11/02/2013 ( in short “Ld.CIT(A)”) arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here- in-after referred to as "the Act") dt.30/12/2011 relevant to the Assessment Year 2010-2011.
The assessee has raised the following grounds of appeal.
The ld.Commissioner of Income Tax (Appeals) has erred in law and on fact in directing to treat 30% of the unaccounted receipts as income of the appellant against the profit was offered by appellant @ 20% at the gross profit ratio and not net profit. It is therefore prayed that the profits may kindly be adopted @ 20% on the ratio of decision of Gurukrupa Developers, where the Ahmedabad Tribunals decision is upheld by Hon’ble High Court of Gujarat in Tax appeal no.1069 of 2011 filed against MA No.338/Ahd/2016.
2. The ld.Commissioner of Income Tax (Appeals) has erred in law and on fact in confirming the additional related to the flats which were not sold during the accounting years as unrecognized income of the year. It is therefore prayed that the addition may kindly be deleted. 3. Your appellant craves liberty to add, to alter, to modify, to amend or to withdraw/ delete any of the grounds of appeal at any time, on or before the hearing of appeal.
The only issue raised by the assessee is that the learned CIT (A) erred in confirming the addition made by the AO with respect to the flats which was not sold during the year as unrecognized income.
The aforesaid ground of appeal was omitted to be adjudicated by the ITAT in its order dated 01/08/2017 inadvertently. Therefore the aforesaid ground of appeal was recalled by the Tribunal in M.A. bearing no.14/Ahd/2018 vide order dated 08/07/2019. Accordingly, we proceed to adjudicate the issue on merit.
Briefly stated facts are that the assessee a partnership firm and engaged in the business of construction. The AO during the assessment proceedings found that the assessee has sold its residential units bearing no.16 & 50 for Rs. 5,95,000/- and Rs. 4,70,000/- respectively which was not disclosed in the income tax return. Accordingly, the AO added the sum of Rs. 10,65,000/- to the total income of the assessee.
Aggrieved assessee preferred an appeal to the learned CIT (A) who has confirmed the order of the AO by observing as under: 11. I have gone through the assessment order and the submission of the A.R. carefully. It is seen that the Assessing Officer has observed that income with respect to unit no.16 and unit no.50 has not been recognized even at the end of FY 2010-11 and construction income of Rs.5,95,000/- of unit no.16 and Rs.4,73,000/- of unit no.50 was not disclosed, the Assessing Officer hence added the same to the total income of the assessee.
The Ld.AR, before us submitted that the income with respect to the residential units bearing no. 16 and 50 has been offered to tax in the assessment year 2011-12. Accordingly, he prayed that the assessee should be allowed the credit for the amount of tax paid with respect to such units in the year under consideration.
On the other hand the Ld.DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the relevant materials available on records. The preposition laid down by the authorities below has not been challenged before us. Thus the limited issue in the present case arises whether the assessee is entitled for the tax credit with respect to the income offered in the subsequent year but the same (income) was treated for the year under consideration. In this regard we note that the assessee is entitled for the tax credit paid on the units which were recognized as sale in the subsequent year. In this regard we find support and guidance from the order of this Tribunal in the case of Shailesh Kumar P. Lukhai, bearing for A.Y. 2006-07 dated 23/05/2012. The relevant part of the order is as reproduced as below:
8. The assessee alternately argued that if the Hon’ble Bench concluded that taxability of the capital gain is pertained to AY 2006,07, then credit of tax paid in AY 2007-08 may be allowed. He relied on the decision in the case DCIT vs Standard Fire Works (Pvt.) Ltd. (2010) 128 TTJ 1 (Chennai) (T.M), DCIT (Spc. Range-u/s.271(1)(c) of the Act) Vs Oman International Bank, SAOG (2006) 100 ITD 285 (Mum.) (SB)/(2006) 102 TTJ260 (Mum.) (SB) and Perfect Equipment Vs DCIT (2003) 85 ITD 50 (Ahd). We have gone through the case referred by the appellant and also above finding, the AO is directed to give credit of the tax paid for capital gain shown by the assessee in AY 2007-08 in A.Y 2006-07. The assessee’s appeal on the this ground is allowed.
In view of the above, we direct the AO to allow the credit of tax to the assessee after verifying the fact that the assessee has offered the income in the subsequent assessment year. Accordingly the ground of appeal filed by the assessee is allowed for statistical purposes.
In the result the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 01/10/2019 at Ahmedabad.