DCIT,Central Circle - 3, Hyderabad V. M/s. Ashoka Developers & Builders Limited, Hyderabad

ITA 1315/HYD/2014

• Counselvise Citation: 131522514 RSA 2014
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 10-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: I B RAMAKRISHNA
• Assessee Lawyers: K C DEVADAS
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1315/HYD/14 : ASSESSMENT YEAR 2010 - 11 DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 3, HYDERABAD V/S. M/S. ASHOKA DEVELOPERS & BUILDERS LTD., HYDERABAD (PAN AAECA 4442 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI I B.RAMAKRISHNA DR RESPONDENT BY : SHRI K.C.DEVADAS DATE OF HEARING 13 . 11 .2014 DATE OF PRONOUNCEMENT 14.11.2014 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD DATED 21.04.2014, WHEREBY HE DELETED THE ADDITION OF RS.94,81,608 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN SALE CON S ID E RATION OF VILLAS. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, WHICH IS CARRYING ON BUSINESS AS A PROMOTER AND B UILDER. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 1.10.2010 DECLARING A TOTAL INCOME OF RS.2,66,42,069. IN THE SAID YEAR, THE ASSESSEE COMPA N Y HAD UN D ERTAKEN DEVELOPM E N T AND CONSTRUCTION OF PRESTIGIOUS PROJECT OF CON S TRUC T I ON OF VILLAS KNOWN AS A SHOK ALA MAISON . KEEPING IN VIEW THE ALL E GATION L E VELLED AGAINST THE ASSESSEE OF SUPPRESSION OF SALE PROCEEDS IN TH E ASSESSMENT S COMPL E TED IN THE EARLIER YEARS., VIZ. 2008 - 09 AND 2009 - 10, THE ASSESSING OFFICER PROCEEDED TO VERIFY THE SALE I TA NO. 1315/H YD/20 14 M/S. ASHOKA DEVE LOPERS & BUILDERS LTD., HYDERABAD 2 CON S I D ERATION OF VILLAS SHOWN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. IN THI S REGARD, H E FOUN D TH AT TOTAL 11 V ILLAS WERE SOLD BY TH E ASSESSEE DURING THE Y E AR UNDER CONSIDERATION AND THERE WAS WIDE VARIATION IN THE SELLING RATES OF DIFFERENT VILLAS RANGIN G FROM RS.2000 PER SQ. FT . TO RS.3,318 PER SQ. FT. FOLLO W IN G THE METHOD ADOPTED IN TH E ASSESSMENTS COMPLETED IN EARLIER ASSESSMENT YEARS I.E. ASSESSMENT YEAR 2008 - 09 AN D 2009 - 10, THE AVERAGE RATE O F R S .2,592 PER SQ. FT WAS WORKED OUT BY THE ASSESSING OFFICER AND APPLYING THE SAID RATE, THE SUPPRESSION OF SALE VALUE O F THE VILLAS WAS WORKED OUT BY HIM AT RS.94,81,608. THE AMOUNT SO WORKED OUT WAS ADDED BY TH E ASSESSING OFFICER TO THE TOTAL INCOME O F THE ASSESSEE ON ACCOUNT OF SU PPRESSED SALE PROC E EDS IN THE ASSESSMENT C OMPLETED UNDER S .143(3) VIDE ORDER DATED 14.3.2013. 3. AGAIN S T THE ORDER PASSED BY THE ASSESSING OFFICER UNDER S.143(3), AN APPEAL AS PREFERRED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) CHALLENGING IN T ER ALIA THE ADDITION OF RS.94,81,608 MADE BY THE ASSESSING OFFICER ON A CC OU N T OF ALLEGED SUPPRESSION OF S A LE PROCEEDS AND THE LEARNED CIT(A) DELETED THE SAID ADDITION MA D E BY THE ASSESSING OFFICER FOLLO W IN G TH E DECISION OF THE T RIBUNAL IN ASSESSEES OWN CA S E FO R THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 RENDERED VIDE ORDER DATED 28.3.2014 PASSED IN ITA NOS.1268/HYD/2012 AND 937/HYD/2013, WHEREIN SIMILAR ADDITION S MADE ON ACCOUNT OF ALLEGED SUPPRESSION OF SALE PROCEEDS WERE DELETED BY THE TRIBUNAL FOR THE FOLLO W IN G REASON S GIVEN IN PARAGRAPH 7 THEREOF - 7. WE HAVE H E ARD BOTH THE P A RTIES AND PERUSED M A TE R IAL ON RECORD. THE ASSESSING OFFICER ESTIM A TED SUPPRESSED SALES ON THE BASIS OF PRICE DEPICTED IN WEBSITE AND HE HAS NO T VERI F I E D THAT THE PU RC H A SER OF THE PROPE RTY PAID ANY ON - MONEY OR EXCESS CON S ID E RATION IS PAID TO THE ASSESSEE. AS RIGHTLY ARGUED BY TH E ASSESSEE , THE ASSESSEE CONSIDERED I TA NO. 1315/H YD/20 14 M/S. ASHOKA DEVE LOPERS & BUILDERS LTD., HYDERABAD 3 THE SRO RATE FOR THE PURPOSE OF SHOWING THE SALE S . THE ASSESSING OFFICER HAS NO T BROUGHT ANYTHING ON RECORD TO SHOW THAT ANY E XTRA CON S I D ERATION PASSED BETWEEN THE P A RTIES. IN TH E ABSENCE OF ANY MATERIAL TO SHOW THAT EXTRA CON S I D ERATION PASSED BETWEEN THE P A RTIES IN R E SPE C T OF THE PROPERTIES O F TH E ASSESSEE IT IS NO T APPROPRI A TE TO CON S I D ER THE PRICE SHOWN IN TH E WEBSITE IN RESPECT OF THE PROPERTIES. ACCORD I NGLY, BY PL A CING RELIANCE ON THE JU D G M ENT OF SUPREME COURT IN THE C A S E OF K .P.VERGHESE V/S. ITO(131 ITR 597)(SC), WHEREIN THE APEX C OU R T HELD THAT S EC TION 52(2) OF THE INCOME TAX ACT, 1961 CAN B E INVOKED ONLY WH E RE THE CO N S I D ERATION FOR THE TRANSFER OF A C A PI T AL ASSET HAS BEEN UN DE RSTATED BY TH E ASSESSEE OR, IN OTHER WORDS, THE FULL VALUE OF THE CONSIDERATION IN RESPECT OF THE TRANSFER IS SHOWN AT A LESSER FIGURE THAN THAT ACTUALLY R ECEIVED BY THE ASSESSEE, AND THE BURDEN O F P R OVIN G UN D E R STATEMENT OR CONCEALMENT IS ON TH E RE VE NUE; AND THE SUB - S EC T ION HAS NO APPLI C A T ION IN TH E CASE OF A BONA FIDE TR A NS A C T ION WHERE THE CONSIDERATION RE C EIVED BY THE ASSESSEE HAS BEEN CORRECTLY DECLARED, WE ARE INCLINED TO CONFIRM THE ORDER OF THE CIT(A). THE GROUND OF THE REVENUE IS DISMISSED. 4. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUN A L ON THE F OLLOWING GROUNDS - 1. ON THE FACTS AND CIRCUMSTANCES OF THE C A SE, THE LD. CIT(A) ERRED IN N OT APP R ECIATIN G THE FACTS O F THE CA S E AND THE LAW APPLICABLE. 2. THE LD. CIT(A) ERRED IN RELYING ON TH E JU D GEMENT OF THE HON'BLE ITAT IN ASSESSEES OWN CA S E FOR THE AY I TA NO. 1315/H YD/20 14 M/S. ASHOKA DEVE LOPERS & BUILDERS LTD., HYDERABAD 4 2008 - 09, WITHOUT CON S I DE RI N G THE FACT THA T THE ISSUES INVOLVED W E RE NO T IDENTICAL. 3. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT, THE RA TE ( PER SQ.FT .) O F THE VILLAS SOLD VARIED FROM RS.1572/ - TO RS.3318 / - AND SUCH HUGE VARIATIONS ARE NO T POSSIBL E FOR THE VILLAS LOCATED IN THE SAME GATED COMMUNITY. 5. WE HAVE HEARD THE ARGUME NTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS CONTENDED THA T THE ASSESSEE IN THE Y EA R UNDER CONSIDERATION HAS NO T CON S IDERED THE SRO RATE FOR THE PU RP OSE OF SHOWING THE SALE S AND EACH V ILLA IN THE SAME PROJECT HA S BEEN SOLD AT DIFFERENT RATES RANGING FROM RS.1,572 TO RS.3,318 PER SQ. FT. H E HAS CONTENDED T H A T THE FACTS INVOLVED IN THE Y E AR UNDER CON S I DE RATION ARE THUS MATERIAL L Y DIFFERENT FROM THE FACTS INVOLVED IN ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 AND THE DECI SION OF THE TRIBUNAL FOR THE SAID YEARS CANNO T BE APPLIED TO THE YEAR UNDER CON S I DE RATION . WE ARE UNABL E TO AGREE WITH THI S CON TEN TION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. IT I S OB SE RVED THAT ALTHOUGH THE ASSESSEE HAD CONSIDERED THE SRO RATE FOR THE PU R PO S E OF SHOWING THE SALE IN ASSESSMENT YEARS 2008 - 09 AND 2009 - 10, AN D THE SAME WAS NOTED BY THE TRIBUNAL IN ITS ORDER, THE RELIEF ON THE ISSUE O F SUPPRESS I ON OF SALE PROCE E DS WAS NO T GIVEN BY THE T RIBUNAL TO THE ASSESS EE ON TH A T BASIS, BU T THE SAME WAS GIVEN ON THE BASIS THAT NO M A TERIAL WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT ANY EXTRA CON S ID E RATION WAS PASSED BETWEEN THE P A RTIES IN RESPECT OF THE PROPERTIES OF THE ASSESSEE. R ELI A NCE IN THIS CON T EXT WAS PL A CED BY THE TRIBUNAL ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE C ASE OF K. P .V E RGHESE V/S. ITO (131 ITR 597) WHEREIN I T WAS HELD THAT THE BURDEN OF PROVING UN DE RSTATEMENT OR CONCEALMENT OF SALE CON S I DE RATION ALLEGED AG A IN S T THE ASSESSEE I S ON THE REV ENUE. A PERUSAL O F THE ASSESSMENT ORDER PASSED FOR TH E Y E AR UNDER CONSIDERATION CLEARLY I TA NO. 1315/H YD/20 14 M/S. ASHOKA DEVE LOPERS & BUILDERS LTD., HYDERABAD 5 SHOWS THAT NO M A TERIAL WHAT S O E VER WAS B R OU G H T ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT ANY EXTRA CON S ID E RATION OUTSIDE THE BOOK S O F ACCOUNT OR BEYOND THE VALUE GIVEN IN THE RELE V ANT AGREEMENTS WAS RECEIVED BY THE ASSESSEE F R OM THE PURCHASERS OF THE VILLAS AND THE ADDITION ON ACCOUNT OF ALLEGED SUPPRESSION OF SALE PROCEEDS WAS MADE BY HIM ON THE SAME BASIS AS MADE IN THE E A RLIER YEARS , V IZ. ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. I N OUR OPINION, THE MATERIAL FACTS RELEVANT TO THIS ISSUE INVOLVED IN THE Y E AR UNDER CONSIDERATION ARE THUS SIMILAR TO THAT OF THE ASSESSMENT YEAR S 2008 - 0 9 AND 2009 - 10 AND T H E DECISION RENDERED BY TH E TRIBUNAL FOR THE SAID YEARS IS SQUARELY APP L I CAB LE EVEN TO THE Y E AR UNDER CON S ID E RATION. ACCOR D I N GLY, WE RESPECTFULLY FOLLO W THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CA S E FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 AND UPHOLD THE IMPU G N E D ORDER OF THE LEARNED CIT (A) DELETING THE ADDITION OF RS.94,81,608 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALL E GED SUPPRESSION OF SALE PROCEEDS. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 1 4 TH NOVEMBER, 2014 SD/ - SD/ - ( ASHA VIJAYARAGHAVAN ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 14 TH NOVEMBER 2014 COPY FORWARDED TO: 1. M/S. ASHOKA DEVELOPERS & BUILDERS LTD., 3 RD FLOOR,PARK VIEW ESTATE, ROAD NO.2, BANJARA HILLS, HYDERABAD 2 . DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 3, HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD COMMISSIONER OF INCOME - TAX - I, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S