Case Law Details
Brief of the Case: In the cited case, ITAT directed AO inter-alia to include installments received on sale of various houses and flats under hire purchase agreement and at the same time allow corresponding expenditure which has been expended by the assesses in cash (including through cheque).
Facts of the Case: During assessment proceedings, the Assessing Officer noticed that assessee was accounting for the installments received against sale of allotment of house as capital receipt. Such receipts were Rs.2,96,76,773/-. After detailed discussion, this amount was added to the income of the assessee.
On first appeal, the CIT (A) confirmed the action of the AO.
The assessee questioned the order of the CIT (A) before the ITAT.
Grounds for appeal before ITAT: The grounds for appeal that whether
(i) the Worthy CIT(A) through his order dated 29.10.2014 has erred in passing that order in contravention of provisions of Section 250(6)of the Income Tax Act, 1961.
(ii) the Worthy CIT(A) has erred in confirming the action of AO wherein he has erred in making an addition of Rs.2,96,76,773/- on account of installments for sale of houses/flats received during the year.
Contention of the Revenue: Revenue strongly supported the order of CIT (A).
Contention of the Assessee: The assessee submitted that the above question in the case of Assessee itself has already been adjudicated by the ITAT in ITA No.762/2007 for A.Y 2003-04, wherein ITAT directed AO inter-alia to include installments received on sale of various houses and flats under hire purchase agreement and at the same time allow corresponding expenditure which has been expended by the assesses in cash (including through cheque). For the year in question, while passing the assessment order, the directions of ITAT in ITA no.762/2007 (Supra) has already been followed by the AO and the appellant is not aggrieved to that extent. But the appeal of assessee against order of ITAT in ITA No.762/2007 (Supra) is pending adjudication before the Hon’ble P&H High Court. Exactly identical situation was there before the Hon’ble Bench in case of appellant itself in ITA No. 680/CHANDI-2014 for A.Y 2010-11 decided by the Hon’ble Bench, whereby the appeal of the assessee was dismissed. The present appeal was also having identical facts. It was prayed that this appeal might also be disposed off according to the assessee’s own past history.
Held by CIT (A): The CIT (A) confirmed the action of the AO by following the directions of ITAT in ITA no.762/2007 (Supra).
Held by ITAT: ITAT noted that this issue was adjudicated in the assessee’s own case for assessment year 2003-04 in ITA No. 762/Chd/2007, wherein ITAT had ordered AO to include installments received on sale of various houses and flats under hire purchase agreement and at the same time allow corresponding expenditure which has been expended by the assessee in cash (including through cheque). Further in the year of completion of a particular scheme effect has to be given in respect of accumulated installments as well as accumulated expenditure which has not been already considered in a particular year on cash basis.
Following the above, ITAT decided the case against the assessee.
