SIDDHARTH DEVELOPERS & BUILDERS ,BIJAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 , BIJAPUR

O R D E R

Per Shri A.K. Garodia, Accountant Member

by the assessee are as under. “1. Order Passed by CIT-Appeals, Gulberga is unjustifiable and erroneous in as much as the decision given by ITAT, Panaji in the same assessee for earlier year is not allowed.

2. Order passed by AO is erroneous in as much as he should have considered the fact that, ITAT, Panaji vide its order in & 149 / PNJ / 2007 dated 25-11-2009 has directed assessee to compute the Income from Land development by applying Percentage of work Completed method from AY 2002-2003. As such for AY 2007-2008, he should have computed the income accordingly.

3. The contention of CIT Appeals Gulberga that the decision of ITAT. Panaji, as referred above is not concerned with assessee is totally erroneous since, the same is passed in regard to same assessee for AY 2002-2003.

3. At the very outset, the bench wanted to know as to how much addition was made by the AO in the present case. In reply, it was submitted by ld. AR of assessee that in the return of income, income shown was Rs. 9,49,529/- and only one addition is made by the AO of Rs. 25,000/- and this addition is not being disputed by assessee in the present appeal. At this juncture, the bench observed that under these facts, the AR of the assessee has to show that the present appeal of the assessee is not of only academic interest because even if the appeal is allowed there can be no addition which can be deleted. In reply, it was submitted by ld. AR of assessee that in Para 2 of the assessment order, the AO has said that the assessee has disclosed GP of Rs. 6,24,810/- as against Rs. 4,29,260/-, if calculated according to percentage completion method. He further pointed out that the AO has stated in same Para that since excess income is shown by assessee, the same is accepted. He submitted that if it is held that income to be assessed should be computed as per contract completion method then the assessee will get relief because in that situation, the GP should be considered at Rs. 4,29,260/- as against GP reported by assessee at Rs. 6,24,810/- and therefore, the appeal of assessee is not of academic interest. The ld. DR of revenue supported the order of CIT(A).

4. I have considered the rival submissions. The issue was decided by CIT(A) in paras 6 to 9 of his order which are reproduced hereinbelow. “6. During the assessment year in appeal, if same method of accounting is continued, as per appellate orders of ITAT, Panaji, then GP from project works out to Rs.4,29,260/- whereas assessee has declared GP from this project of Rs.6,24,810/- i.e. higher income is being declared. 7. Now the appellant's contention that the deduction of Rs. 1,95,550/- should have been allowed in the assessment being the difference of GP. 8. The case heard in the light of the statement of facts and the grounds. The appeal is adjudicated based on available records. The brief facts and issues are analysed are as under;

• M/s. Siddhartha Developers & Builders, Bijapur started filing of its Return of Income only after issue of notice U/s.153A of the I T Act, 1961. i.e.. from the AY 2002-03 onwards. • As per records for none of the A Ys the statutory audit u/s 44AB appears to be attracted. • However, the M/s.Siddhartha Developers & Builders, Bijapur filed its Return of Income declaring total income of Rs.9,49,530/- on 27.10.2007. Notice u/s 143(2) was issued on 25.08.2008. After a long gap the appellant appeared before the AO only on 15.12.2009 and being the last date of time barring 30.12.2009. The appellant all along waited till the pronouncement ITAT's, Panaji order dated 28.11.2009. • Even during the course of assessment proceedings before AO the appellant had not raised the issue nor filed any revised return/revised computation of income. The AR Mr. Rajeev Naik CA appeared with books of accounts before AO also not made any contention with regard to the said issue. Because the AR probably knew that there was no option for claiming the deduction of difference of GP at point. • The appellant could have opted for revision u/s 264 of the I T Act, 1961. • Whatever so ever the assessee filed Return of Income and the assessment has been completed u/s 143(3) with an addition of Rs.25,000/- for which the appellant has not preferred any appeal. • The appeal preferred has no relevance to the assessment order for the AY 200708. • The appeal was filed on 12.01.2010. Till date several posting notices were issued. Finally, Mr.Rafiv Naik appeared and relied on written submissioins already filed. • The issue did not emanate from the assessment order in which only some small addition was made. The appellant assessed neither filed revised return which he could have or at least filed petition under sec.264 9. In light of the above facts and circumstances it is not possible and no room to allow the appeal of the appellant. It is observed that it was beyond doubt it is clearly evident that the appellant and the authorized representative whom so ever appeared had no explanation or any fresh submissions to furnish to strengthen the grounds of appeal. Thereby the assessment/appeal proceedings for the AY 2007- 08 are totally different and not similar with AYs 2002-03, 2003-04 & 2004-05.In light of the facts and circumstances of the case all the contentions of the appellant stands on a weak footing and lacks merits. The AO is justified and I do not find any need to interfere with the order. In fact the assessment order stands quite away from the contention of the appeal & grounds. All the relevant grounds of appeal are hereby dismissed. As a result of the above, the appeal of the appellant is dismissed.”

5. I find that the case of the assessee is this that as against income shown in the return of income of Rs. 9,49,529/-, the income should be assessed after reducing Rs. 1,95,550/- because as per the assessee, the GP of the assessee from the project should be considered at Rs. 4,29,260/- as against GP reported by assessee of Rs. 6,24,810/-. Before me, apart from making these submissions that the GP should be accepted at Rs. 4,29,260/- as against GP reported by assessee of Rs. 6,24,810/- for the present year, no material has been brought on record in support of this contention although the assessee has filed paper book of 10 pages but in the same, the assessee has only submitted a copy of Tribunal order rendered in the case of ACIT Vs. Siddharth Builders & Developers in to 150/PNJ/2007 dated 25.11.2009. From this Tribunal order, it is seen that in paras 9 and 10 of this Tribunal order, it is noted that remaining issue to be decided is with regard to method of accounting followed by the assessee. The Tribunal has also noted that according to the AO, the assessee neither followed percentage of completion method nor completed contract method. In that case, it is also noted that CIT(A) has directed the AO to adopt Percentage Completion Method as suggested by ICAI because the AO has accepted that method in respect of other projects of the assessee and ultimately, the Tribunal held that the method followed by the assessee deserves to be accepted in view of the Tribunal order rendered in the case of Ronak Developers and Builders (supra). The Tribunal held that in the absence of any material to contradict the findings of the ld. CIT(A), the order of CIT(A) is upheld and the appeal of the revenue is dismissed. I find that in that case, the AO has accepted the method being Work Completion Method and Percentage Completion Method in other projects and material was produced before CIT(A) in this regard and therefore, CIT(A) has directed the AO to adopt

the same method for the remaining projects also and the Tribunal has confirmed the order of CIT(A). In the present case, no material has been produced before me to show that this method was adopted by AO for some other projects of the assessee and hence, in my considered opinion, this Tribunal order is not applicable in the present case and hence, I find no reason to interfere in the order of CIT(A) because if under an approved method, the income of the assessee is lower, it cannot be said that such method should be adopted although neither the assessee has followed this method for this project or any other project nor the AO has adopted that method for any other project of the assessee.