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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEYAND SHRI G. MANJUNATHA
IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI
BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBERAND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER
ITA no.6010/Mum./2018 (Assessment Year : 2012–13) M/s. Ravechi Infrastructure Projects (Now known as T. Bhimjyani Realty P. Ltd.) 301, “A” Wing, Fortune 2000 ……………. Appellant Bandra (East), Mumbai 400 051 PAN : AAGFR7919B v/s Income Tax Officer ……………. Respondent Ward–28(2)(5), Mumbai Assessee by : None Revenue by : Smt. Jyothi Lakshmi Nayak
Date of Hearing – 03.12.2019 Date of Order – 19.12.2019
O R D E R PER SAKTIJIT DEY. J.M.
The captioned appeal has been filed by the assessee assailing the order dated 9th July 2018, passed by the learned Commissioner of Income Tax (Appeals)–26, Mumbai, for the assessment year 2012–13.
The dispute in the present appeal relates to reduction of certain expenditure from the work–in–progress (WIP).
2 M/s. Ravechi Infrastructure Projects (Now known as T. Bhimjyani Realty P. Ltd.)
When the appeal was called for hearing, no one was present on behalf of the assessee. It is seen from record, on the earlier date of hearing also, the assessee did not appear. Thus, it appears that the assessee is neither serious nor interested in prosecuting its appeal. In view of the aforesaid, we proceed to dispose off the appeal ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material on record.
Brief facts are, the assessee company is carrying on business of builder and developer. For the assessment year under dispute, it filed its return of income on 30th September 2012 declaring loss of ` 19,52,413. In the course of assessment proceedings, the Assessing Officer noticed that the assessee had debited ` 15,41,079, towards club house expenses. Further, he noticed that out of the expenditure claimed of ` 11,97,43,279, an amount of ` 11,80,02,200, was for purchase of bungalows. Noticing the above, the Assessing Officer called upon the assessee to prove the genuineness of such expenses with supporting evidences. As observed by the Assessing Officer, on a perusal of the sale deed furnished by the assessee, he found that club house expenditure was incurred by the assessee on behalf of purchasers which was duly paid by the purchaser. Thus, he concluded that the assessee is not entitled to claim such expenditure. Accordingly, he reduced the said amount from the WIP and added back
3 M/s. Ravechi Infrastructure Projects (Now known as T. Bhimjyani Realty P. Ltd.)
to the income of the assessee. Insofar as the expenditure claimed towards purchase of bungalows, the Assessing Officer observed that in response to the notice issued under section 133(6) of the Act to Vedant Realty Pvt. Ltd., it was found that the said company had purchased two bungalows from the assessee and subsequently, the purchase of bungalows were cancelled and the company received back an amount of ` 11.58 crore including compensation of ` 2 crore. Whereas, the Assessing Officer noticed, the assessee had claimed expenditure of ` 11,80,02,200, towards re–purchase value paid to Vedant Realty Pvt. Ltd. Accordingly, the Assessing Officer added back the differential amount of ` 22,02,200, to the income of the assessee by reducing the same from WIP. Though, the assessee challenged the aforesaid addition before the first appellate authority, however, learned Commissioner (Appeals) sustained the additions made by the Assessing Officer.
We have heard the learned Departmental Representative and perused the material on record. As could be seen, before learned Commissioner (Appeals) the assessee had submitted that by mistake, the club house expenditure was charged to the WIP in the impugned assessment year. It was submitted that realizing the mistake, the assessee had reversed the entry in the financial year 2014–15 by reducing the same from the WIP. Thus, the assessee had submitted
4 M/s. Ravechi Infrastructure Projects (Now known as T. Bhimjyani Realty P. Ltd.)
that since the amount has already been taxed in the assessment year 2015–16, it should not be added in this assessment year. Similarly, in respect of the amount paid towards re–purchase value of bungalows from Vedant Realty Pvt. Ltd., the assessee had submitted that though it had not received the differential amount from the buyer on cancellation of deal, however, it has already considered the sale amount and offered as income in the assessment year 2010–11. Therefore, the amount of ` 22,02,200, should not be reduced from WIP. On a perusal of facts on record as well as the reasoning of learned Commissioner (Appeals), it becomes clear that the assessee itself admits that the club house expenditure is not chargeable to WIP. That being the case, the Assessing Officer, in our view, was justified in reducing it from the WIP and adding back to the income of the assessee. In case, the assessee has offered the very same amount as income in the assessment year 2015–16, it is for the assessee to demonstrate such fact through supporting evidence and claim relief as permissible in law in the assessment year 2015–16. As regard the reduction of differential amount of ` 22,02,200, from WIP, facts on record clearly reveal that the amount actually paid by the assessee to the buyer of the bungalow is less than what is charged to WIP. It is the contention of the assessee that the entire purchase value has been shown as sales in assessment year 2010–11. However, this claim has
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not been factually proved by the assessee through supporting evidence either before the Departmental Authorities or even before us. That being the case, we do not find any infirmity in the order of learned Commissioner (Appeals). Grounds are dismissed.
In the result, assessee’s appeal is dismissed. Order pronounced in the open Court on 19.12.2019
Sd/- Sd/- G. MANJUNATHA SAKTIJIT DEY ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED : 19.12.2019 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary
Assistant Registrar ITAT, Mumbai