BROOKEFIELD CONSTRUCTIONS PVT LTD.,MUMBAI vs. INCOME TAX OFFICER 12(1)(3), MUMBAI

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ITA 5398/MUM/2019Status: DisposedITAT Mumbai16 March 2021AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue to the AO for de novo examination to determine the year of actual receipt for taxability. The challenge to the penalty notice was dismissed as premature.

What were the facts?

The assessee, engaged in real estate development, claimed its share of sales receipts from a project was taxable in AY 2017-18. The AO, however, held it taxable in AY 2016-17 as the co-developer offered sales receipts in that year.

What were the issues?

The primary issue was the correct assessment year for taxing the assessee's share of sales receipts. The secondary issue concerned the premature challenge to a penalty notice.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI VIKAS AWASTHY & SHRI N.K. PRADHAN

For Appellant: Shri Satish Mody, AR
Hearing: 11.03.2021Pronounced: 16.03.2021

O R D E R श्री विकास अिस्थी, न्मायमक सदस्म के द्िाया PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-20, Mumbai [in short ‘the CIT(A)’] dated 28.06.2019 for the AY 2016-17.

2.

Shri Satish Mody appearing on behalf of the assessee submitted that the primary issue raised in this appeal is with respect to addition of Rs. 23,62,069/- on account of undisclosed sales. The learned AR contended that the assessee is engaged in real estate development. A development agreement dated 27.12.2010 was executed by the

3.

Per contra, Ms. Smita Verma representing the department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. The learned DR submitted that the assessee has not placed on record any documentary evidence to show that the amount was in fact received by the assessee in the period relevant to the AY 2017-18. On the contrary, M/s Nirman Trimurti Developers have offered the amount to tax during the period relevant to the AY 2016-17 and as per assessee’s own case and the development agreement, the assessee is entitled to receive 35% share in the gross

4.

We have heard the submissions made by rival sides and have examined the orders of authorities below. At the outset, we observe that the assessee has not appeared before the CIT(A) despite services of notices on five occasions between the month of May and June, 2019. In the absence of any contrary material, the CIT(A) was constrained to uphold the findings of AO.

5.

The contention of the assessee before us is that the amount received from M/s Nirman Trimurti Developers has been offered to tax in the return of income for AY 2017-18, whereas, according to the AO the amount is taxable in the impugned assessment year. Thus, the dispute is with regard to the year of taxability. M/s Nirman Trimurti Developers the co-developer of the project has offered the sales receipts to tax in AY 2016-17. We find that the assessee has not furnished documentary evidences before the AO or the CIT(A) to substantiate that the assessee has received its share of 35% of sales receipts in the period relevant to AY 2017-18. Considering the fact that this factual aspect is required to be examined, we deem it appropriate to restore this issue back to the file of AO for denovo examination. The AO shall tax the assessee’s share in sale considered from the project in the year of actual receipt. Consequently, the ground nos. 1 to 3 of the appeal are allowed for statistical purpose.

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