9911796707
TMI Blog2023 (11) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... ss income and there is no justification in estimating the rental value from those flats and notionally computing annual letting value under section 263 of the Act. Therefore invoking the jurisdiction u/s 263 by Ld. PCIT is not sustainable in the eyes of law, hence impugned order passed under section 263 is ordered to be set aside. Appeal filed by the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ess & profession (As per return) 19927198 Gross Total Income 19927198 Deduction u/s Chapter VIA 12500 Total Income 19914698 Rounded Off u/s 288A 19914700 3. However Ld. PCIT by invoking the revisionary jurisdiction prima-facie found the assessment order passed by the AO under section 143(3) of the Act as erroneous in so far as it is prejudicial to the interest of the revenue and thereby set aside the same by way of issuance of notice under section 263 of the Act which is as under: 4. After considering the written submissions and contentions raised by the assessee company the Ld. PCIT reached the conclusion that the AO while making the assessment under section 143(3) of the Act for the year under consideration has failed to tax the annual value of the property forming part of the closing stock under the head "income from house property" and thereby held the assessment order passed under section 143(3) of the Act as erroneous in so far as it is prejudicial to the interest of the revenue. 5. Aggrieved with the impugned order passed by the Ld. PCIT under section 263 of the Act the assessee company has come up before the Tribunal by way of filing present appeal. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the remaining two offices were used as place for keeping raw material of the project. It is also contended that the entire details have been shown in the balance sheet under the head "advance received" against booking and since booking amount is received the same cannot be put to use for earning rent and drew our attention towards audited financials available at page 1 to 26 of the paper book. 10. The Ld. A.R. for the assessee challenging the impugned order further contended that the AO has raised specific query in the notice dated 3/7/2019 issued under section 142(1) of the Act available at page 33 to 37 of the paper book wherein queries interalia were as under: "2. Please furnish detail of unit wise inventory of your stock in trade as on 01.04.2016 and 31.03.2017. 3. Please furnish method of accounting followed for valuation of closing stock along with detailed calculation of the same. 4. Please furnish reconciliation of opening and closing stock along with additions) made and sales made during the year. 5. Please furnish detail of profit/loss recognized on sale of stock during the year along with the calculation thereof. 6. Please provide detail of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding your Honor's query relating to reconciliation of turnover in service tax return & ITR, we would like to state as under: a. Under Service Tax Rules, service tax is chargeable even on "advances against booking" from the purchaser, who has booked office in Project undertaken by the assessee-firm. However, under Income tax Act, income is chargeable to Tax on basis of Method of Accounting followed by assessee-firm. b. As mentioned in point 1 above, the assessee-firm is following Percentage of Work Completed Method (WIP Method) to declare profit from Project. The advance received from customers till the O.C. is received is shown as "advances against booking" under Current Liabilities in balance sheet and on completion of the project, sales are declared by the assessee-firm. c. In view of above fact, there is mismatch in turnover shown under service tax return and ITR for F.Y. 2016-17. The copy of service tax returns for F.Y. 2016-17 along with reconciliation of gross income received from services shown under Service Tax Return and Income Tax return for F.Y. 2016-17 have been attached herewith also stating the reasons for difference." 12. The Ld. A.R. fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,100,000 Rohan Shah &Mr.RakeshG. Shah 705 - 3,927,500 Mr.Rakesh G.Shah & Mrs.Sonam R,Shah 610 - 3,710,000 Uday Bharat Shah 658 - 4,350,000 TOTAL 15. In the light of the aforesaid argument the Ld. A.R. for the assessee further contended that the AO was fully aware of all the relevant facts and circumstances of the case, called for the entire details and after due verification, passed the assessment order and as such order passed under section 263 is bad in law and is liable to be quashed. 16. However, on the other hand, the Ld. D.R. for the Revenue in order to repel the arguments advanced by the Ld. A.R. for the assessee contended that the AO has not made any discussion whatsoever in the assessment order nor he has made any discussion as to the deemed rent and relied upon the decision rendered by Hon'ble Bombay High Court in case of Sane & Doshi Enterprises (High Court of Bombay) 58 taxmann.com 111, Gundecha Builders (High Court of Bombay) 102 taxmann.com 27 and order passed by coordinate bench of Tribunal in case of Inorbit Malls P. Ltd. in ITA No.2220/M/2021 order dated 11.10.22 and Dimple Enterprises 129 taxmann.com 66. 17. Before discussing the legality and v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g C-work in progress account, Wing B-closing stock account for Rs. 3,76,84,630/-. This profit and loss account and balance sheet has been produced before the AO at the time of scrutiny proceedings in response to the notices issued under section 142(1) of the Act. 21. So when the assessee has filed the complete details vide its reply dated 28.12.2018 and available at page 31 to 32, reply dated 09.07.2019 along with relevant annexure available at page 38 to 71, reply dated 11.11.2019 filed by assessee dated 20.12.2019 along with relevant annexure available at 87 to 94 pursuant to the different notices issued under section 143(2) and 142(1) of the Act it is difficult to accept the contention raised by the Ld. D.R. for the Revenue that AO had not applied his mind. The assessee has also brought on record during assessment proceedings occupation certificate of flats dated 4.6.2013 which shows that out of 10 flats flagged by the Ld. PCIT, assessee has taken the advance in 8 flats and two flats were used for stocking raw material etc. 22. The Ld. A.R. for the assessee further contended that CBDT vide its circular No.02/2018 (F.No.370142/15/2017-TPL) has given explanatory notes to provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
