M/S. SHREE HARI DEVELOPERS,BARODA vs. THE INCOME TAX OFFICER, WARD-2(6), BARODA

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ITA 2129/AHD/2014Status: DisposedITAT Ahmedabad22 November 2017AY 2007-083 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to consider the law laid down in Moon Star Developers and other subsequent judicial precedents, including decisions of the jurisdictional High Court and the Tribunal, during fresh adjudication.

What were the facts?

The assessee challenged additions made by the lower authorities regarding profit on sale of unutilized property and initiation of penalty proceedings. The matter was remitted to the Assessing Officer for fresh adjudication.

What were the issues?

Whether the Assessing Officer should consider subsequent legal developments and Supreme Court decisions when adjudicating a matter afresh after it has been remitted.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: Shri Pramod Kumar]

SMC-ITA No. 2129/Ahd/2014 Shree Hari Developers Vs. ITO Assessment year: 2007-08 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD [ Before Shri Pramod Kumar, Accountant Member ] ITA No. 2129/Ahd/2014 Assessment Year : 2007-08

M/s. Shree Hari Developers ......…………......Appellant 10, Gokul Complex,B/h. Keya Motors, Chhani Jakat Naka, Vadodara – 390 024 [PAN – ABFFS 7575 J] Vs.

Income Tax Officer Ward – 2 (6),Baroda .......................Respondent Appearances by: Urvashi Shodhan for the appellant Santosh Karnani for the respondent Date of concluding the hearing : 22.11.2017 Date of pronouncing the order : 22.11.2017

D I C T A T E D O R D E R

1.

By way of this appeal, the assessee appellant challenges correctness of order dated 13.03.2014 passed by the CIT(A)-II, Baroda in the matter of assessment under Section 143(3) the Income-tax Act, 1961, for the assessment year 2007-08, on the following grounds:-

“1. The learned Income Tax Officer and Commissioner of Income-tax (Appeals) have erred in law and on facts in making addition to the extent of profit on sale of unutilized profit.

2.

Both the lower authorities have erred in law and on facts in initiation of penalty proceedings.

3.

Your appellant craves leave to add, alter, delete &/or amend any grounds of appeal at the time of hearing.”

2.

During the course of hearing of this appeal, learned Counsel for the assessee points out that the matter has been remitted to the file of the Assessing Officer for

SMC-ITA No. 2129/Ahd/2014 Shree Hari Developers Vs. ITO Assessment year: 2007-08 Page 2 of 3 fresh adjudication in the light of the Hon’ble jurisdictional High Court’s decision in the case of CIT vs. Moon Star Developers, [2014] 367 ITR 621 (Guj) and the matter is right now pending before the Assessing Officer. She has two prayers before me i.e. (i) since the SLP is admitted against the Hon’ble jurisdictional High Court’s judgement in the case of Moon Star Developers (supra), the Assessing Officer should give due effect to the order of the Hon’ble Supreme Court as and when ithe judgment is delivered by Hon’ble Supreme Court; and (ii) that while adjudicating on the matter afresh, the Assessing Officer should also take into account the subsequent legal development post Moon Star Developers’ decision. As regards her first point, she does not have much to say beyond stating that the matter is pending for adjudication before Hon’ble Supreme Court and as such we should wait for Hom’ble Supreme Court’s word on the issue. As regards the second limb of her submissions, she points out that law has not stopped developing after Moon Star Developers. She mentions that there are decisions of Hon’ble jurisdictional High Court as also of the division bench of this Tribunal which have clarified and in fact somewhat relaxed the law laid down by their Lordships in the case of Moon Star Developers. She urges me to direct the Assessing Officer to take into account these developments as well.

3.

Learned Departmental Representative opposes both the requests made by the learned Counsel for the assessee. He submits that it is only elementary that when a judgment of the Hon’ble Supreme Court comes it is to be given due effect, and, as such, as and when the judgment will be delivered, the assessee will get the resultant relief. The proceedings before the Assessing Officer cannot be held in abeyance beyond the time permitted in law nor the binding effect of the Hon’ble High Court be ignored. It is of course for the assessee to protect his legitimate interests by ensuring that he has the benefit of relaxation, if any given by the Hon’ble Supreme Court. As regards the second limb of learned Counsel’s request, learned Departmental Representative fairly states that he does not have any objection to the subsequent legal decisions being taken into account while Assessing Officer’s fresh adjudication.

4.

In view of the above discussion, I am of the considered view that, all that is necessary to say at this stage is, though at the cost of stating the obvious but with the consent of the parties, that while adjudicating the matter afresh, the Assessing Officer will not only take into account the law laid down in the case of Moon Star Developers (supra) but also take into account the other binding judicial precedents on the said issue including subsequent decisions on the same issue of the Hon’ble jurisdictional High Court as also by the decisions of this Tribunal. That is an inherent part of the fresh adjudication in accordance with the law and in the light of the law laid down by Hon’ble jurisdictional High Court in the case of Moonstar Developers

SMC-ITA No. 2129/Ahd/2014 Shree Hari Developers Vs. ITO Assessment year: 2007-08 Page 3 of 3 (supra). These observations, however, do not effect what has been decided by the CIT(A) and to that extent no interference on substantive ground is thus called for. Grievances of the assessee are dismissed but subject to the observations as above.

5.

In the result, appeal is dismissed subject to the observations as above. Pronounced and dictated in the open court today on the 22nd November, 2017.

Sd/-

Pramod Kumar (Accountant Member) Ahmedabad, the 22nd day of November, 2017 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

1.

Date of dictation: ......2 pages dictation pad attached….22.11.2017 2. Date on which the typed draft is placed before the Dictating Member: ..22.11.2017. ........ 3. Date on which the approved draft comes to the Sr. P.S./P.S.: ... 22.11.2017.... . 4. Date on which the fair order is placed before the Dictating Member for Pronouncement:… 22.11.2017... 5. Date on which the file goes to the Bench Clerk : ... 29.11.2017.. 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: ……

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