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Income Tax Appellate Tribunal, “J”, BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI RAM LAL NEGI, JM
आदेश / O R D E R
PER RAM LAL NEGI, JM These are the cross appeals filed by the revenue and the assessee respectively against the order dated 25/03/2013 passed by the CIT (A)-35, Mumbai pertaining to the Assessment Year 2008-09, whereby the Ld. CIT (A) has partly allowed the appeal filed by the assessee against assessment order passed u/s 143(3) of the Income Tax Act, 1961 (for short ‘the Act’).
These appeals were fixed for hearing for 4.4.2017. On 4.4.2017 when the case was called for hearing, one person without having letter of authority presented an application for adjournment. Perusal of record revealed that from the date of filing of these appeals the assessee has sought adjournments on more than fifteen times. On two occasions neither the representative of the assessee appeared nor any application for adjournment was received. In view of the past conduct of the assessee, we rejected the application and decided to proceed ex-parte against the assessee and dispose of the appeals on the basis of material available on record, after hearing the departmental representative.
Brief facts of the case are that the assessee firm filed its return of income for the assessment year 2008-09 declaring the total income as nil. Later on the return was revised and declared the total taxable income at Rs. 20,99,570/-. The return was processed u/s 143 (1) of the Act and after scrutiny the AO determining the total income of the assessee at Rs. 70,38,870/-.
Aggrieved by the assessment order, the assessee carried the matter before the CIT(A) in the first appeal. The Ld. CIT(A) after hearing the assessee and taking into consideration the explanations in the light of the documents submitted by the assessee in support of its claim partly allowed the appeal of the assessee. The revenue has filed the present appeal against the impugned on the following effective grounds of appeal:
1. “Whether on the facts and in the circumstances of the case, and in law, the ld. CIT (A) erred in deleting the addition of Rs. 48,38,237/- which was shown as advance although the assessee is following project completion method of AS-7 and the project has been completed during the year and obtained occupancy certificate, in respect of project.”
2. “The appellant prays that the order of the Ld. CIT (A) on the above grounds be set aside and that of the AO be restored.” 3. “The appellant craves leave to amend or alter any ground or add a new ground”.
5. Before us, the Ld. Departmental Representative relying on the assessment order submitted that the Ld. CIT (A) has erred in deleting the addition of Rs. 48,38,237/- which was shown as advance by the assessee despite the fact that the assessee was following project completion method of and the project had been completed during the year relevant to the assessment under consideration.
6. We have perused the material on record in the light of the submissions of the Ld. CIT(A). The Ld. CIT(A) has deleted the addition holding as under:
“5.3 Going through the assessment order and submissions made by the appellant, I am convinced that as per the accounting method consistently followed by the appellant and accepted by department in earlier assessment orders, action of AO treating advance received on “booking of flats” as “Sale of Flats” is not correct as per the law of precedent and further, as sale of those flats are already accounted in assessment year
2009-10 and considered for taxation purpose, any addition in current assessment year 2008-09 is not justified because it will amount of double taxation. It is also seen that there was Prohibitory Order by the Income Tax Department in case of flat Nos. A/001 and A/002 and therefore, no possessions were given to the buyers till 2012 when said Prohibitory Order was withdrawn by the Income Tax Department. Accordingly, disputed addition of Rs. 48,38,237/- is deleted.”
We notice that the assessee’s contention before the Ld. CIT(A) was that physical possession of six flats were not handed over to the prospective buyers therefore, the amounts received from them were shown as advance received against booking of flats and cost of the flats were shown as closing stock at cost price. The possession of the said flats was given during the year 2009-10 and the sales were accounted in the assessment year 2009-10. In view of the aforesaid facts we do not find any reason to interfere with the order passed by the Ld. CIT(A). We, therefore, uphold the findings of the Ld CIT(A) and dismiss the solitary ground of appeal of the revenue. (Assessment Year: 2008-09)
The assessee has raised the following effective grounds of appeal against the impugned order passed by the Ld. CIT (A):-
1. “On the facts and in law, learned CIT (A) has erred in sustaining addition of Rs. 30,79,922/- made by the Assessing Officer as estimated profit for work-in-progress for construction of “Kubar Project” for the year ended 31.03.2007.
2. On the facts and in law, it is kindly requested to delete impugned addition of Rs. 30,79,922/- sustained by the learned CIT (A).”
The Ld. DR relying on the impugned order passed by the Ld. CIT(A) submitted that the Ld. CIT(A) has rightly dismissed the appeal of the assessee and sustained the addition of Rs. 30,79,922/- made by the Assessing Officer as estimated profit for work in progress for construction of “Kuber Project”. The Ld. DR further submitted that the Ld. CIT(A) has confirmed the addition in question by following the order passed by the CIT(A) in assessee’s own case for the assessment year 2007-08.
We have carefully perused the orders of the authorities below in the light of the submissions of the Ld. DR. The Ld. CIT(A) has confirmed the addition aforesaid by holding as under:-
“7.3 I find that the AO has correctly followed the direction of my predecessor in appeal order NO. CIT (A)- 35/ItO-25 (3) (2)/ITA- 468/2009- 10 dated 26.04.2010 and when the matter is pending before the Hon’ble Tribunal and matter is not adjudicated by the Tribunal till date, this ground of appeal is rejected and dismissed. In the result, this ground related to addition of Rs. 30,79,922/- is dismissed.”
The Ld. CIT(A) has confirmed the addition in question by following the order of his predecessor passed in assessee’s appeal for AY 2007-08. In the absence of any evidence to rebut the concurrent findings of the authorities below, we have no option but to confirm the impugned order. We, accordingly, uphold the findings of the Ld. CIT(A) and dismiss the sole ground of appeal of the assessee. In the result, cross appeals filed by the revenue and the assessee for assessment year 2008-09 are dismissed. Order pronounced in the open court on 28th April, 2017.