City Life Developers, Mumbai vs Assessee

Income Tax Appellate Tribunal18 May 2015

CitationITA NO.4498/Mum/2013

Ratio decidendi

The rule this decision rests on

The Tribunal's reasoning rests on the following principles, each stated as the court applies them: Where the Assessing Officer has called for the relevant details, examined them, and framed the assessment under section 143(3) after making enquiry, an assessment is not rendered erroneous and prejudicial to the interest of the Revenue merely because the order does not expressly discuss a particular issue or method of accounting; mere non-mention of an issue in the assessment order after the details were called for and examined does not establish lack of enquiry. Where the Assessing Officer has taken one of the possible views on a question of law or fact, supported by a decision of a higher forum available at the time of assessment and not disturbed by the Department on appeal, the assessment is not erroneous for the purposes of section 263, and the Commissioner cannot invoke revisional jurisdiction merely to substitute his own view for that of the Assessing Officer.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

आयकर अपीलय अ धकरण, मुंबई यायपीठ, सी, मुंबई ।IN THE INCOME TAX APPELLATE TRIBUNALMUMBAI BENCHES "C", MUMBAIी जो ग दर संह, या यक सद य एवंी एन. के. बलै या, लेखा सद य, के समBefore Shri Joginder Singh, Judicial Member, andShri N.K. Billaiya, Accountant MemberITA NO.4498/Mum/2013Assessment Year: 2009-10M/s City Life Developers, CIT-25,5th Floor, Agarwal Golden बनाम/ C-11, 2nd Floor,Chamber, Plot NO.13/A, fun Pratyaksh Kar Bhavwan,Republic Road, Off New Link Vs. BKC Bandra-East,Road, Andheri-West, Mumbai-400051Mumbai-400053( नधा$%रती /Assessee) (राज व /Revenue)P.A. No.AADFC1252Bनधा$%रती क ओर से / Assessee by Dr. K. Shivram & Rahul Sardaराज व क ओर से / Revenue by Shri R.R. Prasad-DRु वाई क* तार+ख / Date of Hearing :सन 18/05/2015आदे श क* तार+ख /Date of Order: 18/05/2015आदे श / O R D E RPer Joginder Singh (Judicial Member)The assessee is aggrieved by the impugned order dated25/04/2013, of the ld. Commissioner of Income Tax,Mumbai. The only ground raised in this appeal pertains to2 M/s City Life Developersinvoking the revisional jurisdiction u/s 263 of the IncomeTax Act, 1961 (hereinafter the Act). The crux of theargument advanced by Dr. K. Shivaram along with ShriRahul Sarda, ld. counsel for the assessee is that theassessment order is neither erroneous nor prejudicial to theinterest of the Revenue as the necessary details were filedbefore the Assessing Officer relating to the project PeaceHeaven and the same were duly examined and verified byhim by passing a assessment order u/s 143(3) of the Act.Thus, invoking the revisional jurisdiction is unjustified. Onthe other hand, Shri R.R. Prasad, ld. CIT-DR, defended theconclusion arrived at in the impugned order by submittingthat the assessment order shows that there is no discussionabout the correctness of method of accounting employed bythe assessee as there is no whisper about the genuinenessand accuracy of the profit declared by the assessee byadopting percentage completion method, consequently, theassessment was framed without examining about the methodof accounting employed by the assessee for determining theincome of project Agrawal Peace Heaven.2. We have considered the rival submissions and perusedthe material available on record. If the observation made inthe assessment order, leading to addition made to the totalincome, conclusion drawn in the impugned order, materialavailable on record, assertions made by the ld. respectivecounsel, if kept in juxtaposition and analyzed, we note thatthe assessee declared income of Rs.47,95,692/- in its returnfiled on 25/09/2009, which was processed u/s 143(1) of the3 M/s City Life DevelopersAct. Subsequently, the case of the assessee was selected forscrutiny under CASS, therefore, notices u/s 143(2) and142(1) of the Act along with detailed questionnaires wereserved upon the assessee. The assessee attended theproceedings from time to time and filed various details calledfor and the case was discussed with the assessee as isevident from page 1 onwards of the assessment order itself.In the assessment order, we find that the facts have beenelaborated as the assessee under took three projects namely(a) Agarwal Trinity Tower at Orlem Church at Malad West,Mumbai, (b) Agarwal Hill View at Vasai East, Thane, and (C)Agarwal Peace Heaven at Vasai East, Thane. The project atAgarwal Trinity Tower was consisting of 27 flours which wascompleted in assessment year 2008-09 and the stock ofunsold flats were sold during the year by claiming deductionu/s 80IB(10) of the Act. The project was Agrawal Hill Viewwas consisting of three wings of four stories, each were alsocompleted during the year and no deduction was claimed u/s80IB(10) of the Act. The project namely Peace Heaven,consisting of ten wings of seven stories each of which thework was in progress for which the assessee offered incomeon percentage completion method. The assessee showed lossof Rs.1,02,86,173/- from the project Agrawal Trinity Towerand loss of Rs.36,53,108/- from the project Peace Heavenand a profit of Rs.1,68,39,377/- from project Hill View. Theproject at Trinity Tower was shown as eligible for deductionu/s 80IB(10). There is a discussion in the assessment orderthat claim u/s 80IB(10) was disallowed for earlier years i.e.4 M/s City Life Developers

2004-05 to 2008-09 on the basis of discussion and finding made in the assessment order for assessment year 2005-06, as originally the commencement certificate was issued in the name of M/s Dhruv Construction to develop wings A, B and C, however, in respect of wing C, the assessee entered into a joint venture agreement dated 18/11/2003 and became a joint developer along with M/s Dhruv Construction. We find that the ld. Assessing Officer has made an elaborate discussion of facts by placing reliance upon various decisions of higher authorities. We note that the ld. Assessing Officer has taken one of the possible view, more specifically, when the Tribunal upheld the decision of the ld. Commissioner of Income Tax (Appeals) holding the assessee as a joint developer along with M/s Dhruv Construction. No appeal was filed by the Department against the decision of the Tribunal. Even, no contrary decision has been mentioned more specifically when the assessment was framed, the decision from a higher forum was available before the Assessing Officer. The ld. Assessing Officer has also made discussion about other disallowances in the assessment order along with other details and computation of total income as is evident from page-6 of the assessment order.

2.1. We also note that before the assessment was framed, the facts were duly examined in a detailed manner by the Assessing Officer as scrutiny assessment proceedings were carried out in the present case. Assessment order u/s 143(3) of the Act was passed after detailed enquiry/explanation and discussion by the Assessing Officer.

5 M/s City Life Developers

Due discussion has been made in the assessment order with respect to Peace Heaven Project and the assessee consistently followed the same method which was accepted in earlier years after making a detailed enquiry as is evident from various pages of the paper book like notice u/s 142(1), reply to the notice by the assessee, audit report, note in the audit report, details of inventory in Agarwal Peace heaven project and the Assessing Officer has made specific recording about the construction in progress and percentage completion project method adopted by the assessee. In view of these facts, it is clear that the assessment is neither erroneous nor prejudicial to the interest of the Revenue. The case of the assessee find supports from the decision in CIT vs Escorts Ltd. 338 ITR 435 (Del.), Spectra Shares and Scrips Pvt. Ltd. vs CIT (2013) 354 ITR 35 (AP)(HC), CIT vs Advance Construction Company Pvt. Ltd. 275 ITR 30 (Guj.)

2.2. So far as, the contention of the ld. Commissioner and also of the ld. CIT-DR that no discussion has been made in the assessment order with respect to correctness of method of accounting and assessment was passed without due enquires, we note that rather necessary details called for, due discussion was made and the facts were duly scrutinize, thus, the ratio laid down by Hon'ble jurisdictional High Court in Idea Cellular Ltd. vs DCIT & Ors. (2008) 301 ITR 407 (Bom.) and CIT vs Fine Jewellery (India) ltd. (2015) 372 ITR 303 (Relevant page 307) to the fact that mere non-mention of an issue in assessment order after calling for details does not mean lack of enquiry if the details were called for and 6 M/s City Life Developers

examined. We find that before the assessment order was passed the ld. Assessing Officer made a detailed enquiry and on being satisfied with the explanation offered by the assessee and then framed the assessment, therefore, there is no question of alleging that the issue was not examined. One of the possible view, taken by the ld. Assessing Officer, thus, the decision in CIT vs Max India Ltd. 295 ITR 282 from Hon'ble Apex Court, CIT vs Bina Indra Kumar (2015) 370 ITR 552 along with the case in CIT vs Grasim Industries Ltd. (2014) 226 taxman 165 from Hon'ble jurisdictional High Court supports the stand of the assessee. In view of the discussion, we find that the assessment order is neither erroneous nor prejudicial to the interest of revenue, therefore, we allow the appeal of the assessee and reverse the stand of the ld. Commissioner of Income Tax.

Finally, the appeal of the assessee is allowed.

This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 18/05/2015.

Sd/- Sd/- (N.K. Billaiya) (Joginder Singh) लेखा सद#य / ACCOUNTANT MEMBER या$यक सद#य / JUDICIAL MEMBER मब ंु ई Mumbai; ,दनांक Dated : 18/05/2015 f{x~{tÜ? P.S/. न.स. 7 M/s City Life Developers

आदे श क %$त'ल(प अ)े(षत/Copy of the Order forwarded to :

1. अपीलाथ0 / The Appellant

2. 12यथ0 / The Respondent.

3. आयकर आय4 ु त(अपील) / The CIT, Mumbai. p4. आयकर आय4 ु त / CIT(A)- , Mumbai

5. 6वभागीय 1 त न ध, आयकर अपील+य अ धकरण, मब ुं ई / DR, ITAT, Mumbai

6. गाड$ फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, स2या6पत 1 त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मब ुं ई / ITAT, Mumbai

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