M/S DATTA BUILDERS & DEVELOPERS ,DHARWAD vs. INCOME TAX OFFICER WARD-2(1), HUBLI

This is an appeal by the assessee against the order dated 26/9/2018 of CIT(A), Hubballi relating to asst. year 2015-16.

The assessee is a builder and in the course of asst. proceedings, the AO called for details of customers who had purchased properties from the assessee. It is not in dispute that the assessee carried out 2 projects namely Datta Residency and Datta Enclave. In the project Datta Residency, the assessee had shown customer details which reads as follows:-

The AO however found regarding profit and loss account that the receipts declared from the project Datta Residency was only Rs.31,30,887/-. Since there was a difference of Rs.13,69,113/- between the details of customers in Datta Residency Project as per the information provided by the assessee and as declared by the assessee in the profit and loss account, the AO added the difference to the total income of the assessee. The plea of the assessee was that in the profit and loss account, the receipts from Datta Residency Project was shown less and to the same extent receipts from the project Datta Enclave was shown more. Therefore entire receipts from both the projects has been duly declared. It was purely a mistake in showing the receipts from Datta residency project as receipts of Datta enclave project in the profit and loss account. This was not believed by the AO.

Aggrieved by the aforesaid direction, the assessee preferred appeal before the CIT(A). Unfortunately, the appeal of the assessee was dismissed as none appeared on behalf of the assessee. Aggrieved by the aforesaid direction of the CIT(A), assessee has filed present appeal before the Tribunal. At the time of hearing, the ld counsel for the assessee filed a reconciliation of differences in the two projects which is given as Annexure-I to this order.

The prayer of the learned counsel for the Assessee before me was to remand to the AO the issue for fresh consideration of the aforesaid reconciliation and if it is found that entire receipts from the two projects has been disclosed by the assessee and that it was only an error in reporting the receipts from one project as receipts of other projects, then the AO will delete the addition made.

I accept the prayer of the learned counsel for the Assessee and direct the AO to examine the reconciliation so filed by the Assessee and given as annexure to this order and if it is found that entire receipts from the two projects has been disclosed by the assessee and that it was only an error in reporting the receipts from one project as receipts of other projects, then the AO will delete the addition made. The AO will afford opportunity of being heard before deciding the issue.

In the result, appeal by the assessee is treated as allowed for statistical purposes.