ITO, WARD-6(2), KOLKATA., KOLKATA vs. M/S LARICA ESTATES LTD, KOLKATA

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ITA 3218/KOL/2025Status: HeardITAT Kolkata03 September 2026AY 2021-226 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, finding that all evidence was available before the AO and that the assessee consistently accounted for sales upon project completion. The addition of advances to net income was deemed unwarranted.

What were the facts?

The Assessing Officer added Rs. 25,25,70,398/- to the assessee's income on account of advances received from customers, stating that project-wise details were not furnished. The assessee had provided details of advances, including PANs, addresses, and amounts, and had obtained a completion certificate for one project.

What were the issues?

Whether the addition of advances received from customers to the assessee's income was justified when the assessee followed the project completion method and provided sufficient details. Whether there was a violation of Rule 46A of the IT Rules.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA

Before: SHRI RAJESH KUMARAND SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri Sanjit Kumar Das, CIT-DR
For Respondent: Shri Robin Maheshwari and Shri P
Hearing: 18.08.2026Pronounced: 03.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBERAND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.3218/KOL/2025 Assessment Year: (2021-22) ITO, M/s Larica Estates Ltd., Ward – 6(2), Vs. Ward No.64, 52B, Shakespeare Kolkata Sarani, Brough – VII, Circus Avenue S.O., Kolkata – 700017, West Bengal [PAN: AAACL5431D] (Appellant) .. (Respondent) Appellant by : Shri Sanjit Kumar Das, CIT-DR Respondent by: Shri Robin Maheshwari and Shri P. Tulsiyan, AR(s) Date of Hearing 18.08.2026 Date of Pronouncement 03.09.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

This appeal preferred by the revenue is against the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (hereinafter referred to as the “ld. CIT(A)”], dated 07.10.2025 for the Assessment Year (AY) 2021-22.

2.

The only issue raised by the revenue is against the deletion of addition of Rs.25,25,70,398/-, in violation of Rule 46A of Income-tax Rules, 1962 which was made by the Assessing Officer (In short, ‘the AO’) on account of advances

ITA No.3218/Kol/2025/A.Y.2021-22 ITO vs. M/s Larica Estates Ltd. received from the customers when the assessee failed to co-relate the advances with specific project.

3.

The facts of the case in brief are that the assessee filed its return of income on 19.02.202, declaring total income of Rs.11,32,709/-. The case was selected for scrutiny under CASS. Statutory notices u/s 143(2) and 142(1) of the Income-tax Act, 1961 (In short, ‘the Act’) along with questionnaires were issued. During the assessment proceedings, the assessee furnished all the evidences/details as called for by the AO, comprising details of advances received from customers with postal addresses, PANs, e-mail ids, flat nos, flat area, amounts received during the year as well as amount standing as advance as on 31.03.2021. The assessee also submitted drawings, site plan, occupancy certificate dated 29.09.2020 from Barasat Municipality, Kolkata in respect of the project completed. The assessee also requested hearing by video conferencing vide letter dated 02.12.2022 for personal hearing in the matter and accordingly, video conference was allowed on 08.12.2022. The AO, after taking into account the arguments of the assessee, noted that the assessee has not furnished the project-wise details of advances. The AO noted that assessee submitted occupancy certificate from Barasat Municipality in respect of Barasat Project, which was completed during the year and therefore, the revenue was offered for taxation in this assessment year irrespective of the fact whether advances were received during the year or not. Consequently, the AO computed difference between advances received from the customers of Rs.41,75,23,203/- and work-in-progress of Rs.16,49,52,805/-, which worked out to Rs.25,25,70,398/- and added the same to the income of the assessee in the assessment framed u/s 143(3) r.w.s. 144B of the Act, dated 15.12.2022.

ITA No.3218/Kol/2025/A.Y.2021-22 ITO vs. M/s Larica Estates Ltd. 4. In the appellate proceedings, the ld. CIT(A) allowed the appeal of the assessee after taking into account the contentions and documents furnished by the assessee which were also available before the AO by observing and holding as under:

”4. The assessee company was following project completion method. During the year the company has shown total revenue of Rs.27,73,09,536 from completed projects. Apart from this advance of Rs.41,75,23,203 received from customers against work in progress was shown as liabilities in the balance sheet. The company was having total 15 ongoing projects as on 31.03.2021. The appellant submitted the following details of advances received for those projects;

ITA No.3218/Kol/2025/A.Y.2021-22 ITO vs. M/s Larica Estates Ltd. Out of total advances of Rs.41,75,23,203/-, only Rs.14,00,030/- was received during the year and rest of the amount was being carried forward from earlier years. An amount of Rs.21,47,93,275/- related to projects under litigation before the Calcutta High Court {LARICA ESTATES LTD Vs State of West Bengal (WPLRT/79/2017)} and hence no revenue was booked. The appellant has obtained completion certificate for one of the towers of the Barasat project and has shown sales of Rs.9,96,63,884/- and WIP of Rs.1,89,08,625 for remaining part of the project. The assessee has also furnished details of the advances received from various customers. From the above chart and related submissions, it is clear that all advances were received against work in progress shown in the audited books of accounts and the assessee is consistently accounting the sales as and when a project is completed. Hence, the addition of the advances received to net income is unwarranted. AS a result, ground no. 1 is allowed. 5. Grounds of Appeal No.2, 3 and 4 are general objections against initiation of penalty proceedings and charging of interest u/s 234B & 234C of the Income Tax Act, 1961, which are consequential in nature, thus no separate adjudication is being made in this regard. In result, the appeal is allowed.” 5. We have heard rival submissions and perused the materials available on record. We find that the assessee during the year has shown total revenue of Rs.27,73,09,536/- from the completed projects. Apart from that, the assessee has shown advances received from the customers against work-in-progress aggregating to Rs.41,75,23,203/- as liabilities in the balance sheet. We note that during the year, the assessee was having 15 ongoing projects, the details whereof is extracted from by the ld. CIT(A) at page 4 of his appellate order. The ld. CIT(A) noted that most of the projects were in litigation in civil cases. We also note that out of Rs.41,75,23,203/-, only Rs.14,00,030/- was received during the year and rest of the amount being brought forward from earlier assessment years which has been noted by ld. CIT(A) also. We also note that Rs.21,47,93,275/- relates to the projects qua which are under litigations as cases are were going on in Kolkata High Court (Larica Estates Ltd. vs. State of West Bengal). Therefore, no revenue was booked during the year. We note that the assessee obtained completion certificate for one of the towers of the

ITA No.3218/Kol/2025/A.Y.2021-22 ITO vs. M/s Larica Estates Ltd. Barasat project and has shown sales of Rs.9,96,63,884/- qua that tower and WIP of Rs.1,89,08,625/- for remaining part of the project in Barasat. The assessee also furnished advances received from the customers during the year. So far as the violation of Rule 46A of the I.T. Rules is concerned, we note that all evidences were available before the AO during the assessment proceedings, therefore, contention of the revenue that there was violation of Rule 46A is untenable. The ld. CIT(A) has comprehensively recorded the facts in the appellate order. Therefore, we do not find any infirmity in the order of ld. CIT(A), which is very speaking and reasoned order. Consequently we uphold the appellate order by dismissing the appeal of the revenue.

6.

In the result, the appeal of the revenue is dismissed.

The order is pronounced in the open Court on 03/09/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated: 03/09/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent. 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[ फाईल/ Guard file.

BY ORDER, // TRUE COPY // (Manish Bhoi) Deputy Registrar, ITAT, Kolkata

ITA No.3218/Kol/2025/A.Y.2021-22 ITO vs. M/s Larica Estates Ltd.

Initial Date

1.

Draft dictated on (dictation sheet is enclosed with main file.) 24.08.2026 } Sr. PS 2. Draft placed before author 25.08.2026 Sr. PS 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Draft dictation sheets are attached Sr. PS 2.

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