ITA Nos. 6116/M/2014 and 6208/M/2014. Case: City Life Developers Vs ACIT-25(1). ITAT (Income Tax Appellate Tribunal)

Case NumberITA Nos. 6116/M/2014 and 6208/M/2014
CounselFor Appellant: K. Shivram and Aditya Ajgaonkar, A.Rs and For Respondents: Arju Garodia, D.R.
JudgesShamim Yahya, Member (A) and Sanjay Garg, Member (J)
IssueIncome Tax Act, 1961 - Sections 263, 32(1), 32(1)(iia), 69C, 80IB, 80IB(10)
Judgement DateApril 03, 2017
CourtITAT (Income Tax Appellate Tribunal)


Sanjay Garg, Member (J), (ITAT Mumbai 'C' Bench)

  1. The above captioned cross appeals one by the assessee and the other by the Revenue have been preferred against the order dated 28.07.2014 of the Commissioner of Income Tax (Appeals). First we take up assessee's appeal bearing ITA No. 6116/M/2014.

    ITA No. 6116/M/2014

    The assessee in this appeal has taken the following grounds:

    1. The Learned CIT(A) has grossly erred both in law as well as in facts in confirming the assessing of income by the Assessing Officer of Peace Heaven project on protective basis.

    2. The Learned CIT(A) has further erred in not appreciating the facts that the Income of Peace Heaven project has been assessed in Assessment Year 2009-10. Therefore, assessing the said income again for Assessment Year 2010-11 on Protective Basis is completely unjustified and uncalled for.

    3. The Learned CIT(A) has erred in confirming the disallowance of Rs. 6,27,167/- which represents amount payable to Architect M/s. Ajay wade & Associates out of his total bill of Rs. 21,80,111/- therefore, disallowances of outstanding payment is completely unjustified.

    4. The Learned CIT (A) has further erred in not appreciating the fact that the said outstanding payment of Rs. 6,27,167/- represents expenses accrued and due during the year and paid subsequently, therefore disallowances of the same is completely unjustified.

    Ground Nos. 1 & 2;

  2. At the outset, the Ld. Counsel for the assessee has stated that the impugned additions which have been contested vide ground Nos. 1 & 2 of the appeal were made on protective basis pursuant to order dated 25.04.2013 passed by the Ld. Commissioner of Income Tax. He has further stated that the said order dated 25.04.2013 passed under section 263 of the Act has been quashed by the Tribunal vide order dated 18.05.15 passed in ITA No. 4498/M/13. In view of this, ground Nos. 1 & 2 have become infructuous at this stage.

    In view of the above ground Nos. 1 & 2 of the appeal are dismissed having become infructuous.

    Ground Nos. 3 & 4:

  3. The Ld. A.R. of the assessee, bringing our attention to ground Nos. 3 & 4 of the appeal has stated that the disallowance of Rs. 6,27,167/- has been made by the AO on account of difference/mismatch of the figures in the accounts of the assessee and the payee of the amount paid by the assessee to Mr. Ajay Wade. He has further stated that the assessee has been following the mercantile system of accounting whereas Mr. Ajay Wade, the payee, has been following the cash system of accounting. That the assessee had booked the said payment on accrual basis and TDS being deducted thereupon; whereas, since Mr. Ajay Wade has been following cash system of accounting the said amount was not shown in his accounts as receipts. The Assessing Officer (hereinafter referred to as the AO) therefore disallowed the difference of Rs. 6,27,167/-. The Ld. Counsel for the assessee has also filed an application for additional evidence as per rule 29 of the Income Tax Appellate Tribunal Rules, 1963 stating that the assessee has now obtained confirmation of accounts from Mr. Ajay Wade and that the alleged difference of amount has already been paid by the assessee to Mr. Ajay Wade during the next financial year.

  4. We have gone through the copy of the confirmations filed but we note that the same were not enough and sufficient evidence to prove the actual payment of the said amount by the assessee to Mr. Ajay Wade. However, considering the interest of justice, we restore this issue to the file of the AO to decide it afresh. The AO will verify the accounts of the assessee as well as of Mr. Ajay Wade and thereafter to decide the issue afresh in accordance with law. Ground Nos. 3 & 4 are therefore treated as allowed for statistical purposes.

  5. In view of this, the assessee's appeal is treated as partly allowed for...

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