Tin Tar Retail Corp Vs ACIT (ITAT Mumbai)
Search Assessment – Suppressed Sales Deleted, Sec 37(1) Expenses Allowed & CWIP Write-Off Treated as Revenue – 143(3) Order Quashed – ITAT Mumbai
Search u/s 132 led to parallel assessments u/s 143(3) & 153A for AY 2017-18. ITAT held that once search was initiated, assessment u/s 143(3) framed thereafter was invalid in view of 2nd proviso to Sec 153A and ratio of Abhisar Buildwell. Consequently, 143(3) order was quashed.
On merits of 153A assessment, AO alleged suppressed sales of ₹96.77 lakh based on ERP data mismatch; however ITAT observed that difference arose due to sales returns not reflected in ERP extracts and no incriminating material proved suppression. Addition deleted. Further, disallowance of prior period expenses ₹15,284 & sales tax/VAT write-off ₹1.20 lakh were held allowable u/s 37(1) as business expenditure.
Regarding write-off of CWIP ₹47.93 lakh on abandoned Hyderabad retail project, Tribunal held that expansion was in same line of business and no enduring asset came into existence; hence write-off is allowable revenue expenditure and CIT(A) enhancement deleted. For AY 2018-19 also, disallowance of VAT & sundry balances written off was deleted. Assessee appeals largely allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
