Income Tax Officer (Ward ) 5, Margao V. M/S Antrix Developers, Panaji

ITA 155/PAN/2013

• Counselvise Citation: 15524114 RSA 2013
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 28-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A M LOBO
• Assessee Lawyers: KISHORE M BANDEKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 155/PNJ/2013 : (ASST. YEAR : 2005 - 06) INCOME TAX OFFICER, WARD - 5, MARGAO, GOA (APPELLANT) VS. M/S. ANTRIX DEVELOPERS, NO. 4, KOSSAMBE, BUILDING SWATANTRAPATH, VASCO - DA - GAMA, GOA (RESPONDENT) PAN : AADFA0628H APPELLANT BY : A.M. LOBO, DR RESPONDENT BY : KISHORE M. BANDEKAR, CA DATE OF HEARING : 30/07/2013 DATE OF PRONOUNCEMENT : 08 /08/2013 O R D E R PER P.K. BANSAL : 1. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DT. 25.4.2013. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO THE CLAIM OF DEDUCTION OF RS.25,66,999/ - INCURRED BY THE ASSESSEE TOWARDS COST OF THE LAND. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT FOR A.Y. 2005 - 06 WAS COMPLETED. SUBSEQUENT LY, THE ASSESSMENT HAS BEEN RE - OPENED VIDE NOTICE DT. 25.8.2010 BY RECORDING THE REASONS THAT : - AS PER PROFIT AND LOSS ACCOUNT FOR A/Y 2005 - 06, THE ASSESSEE HAS DEBITED RS.29,66,999/ - TOWARDS COST OF LAND AS AGAINST THE ACTUAL PAYMENT OF RS.4,00,000/ - P AID IN CASH AS PER SALE DEED OF LAND DATED 24 - 12 - 1997. THUS SHOWING A DIFFERENCE OF RS.25,66,999/ - . 2 ITA NO. 155/PNJ/2013 (ASST. YEAR : 2005 - 06) THE ASSESSEE SUBMITTED THE RETURN AT THE SAME FIGURE AS THE ORIGINALLY FILED. THE ASSESSEE CONTENDED THAT THE ASSESSEE CLAIMED DEDUCTION OF RS.25,66,999 / - AS PART OF THE COST OF LAND BEYOND SUM OF RS. 4 LACS AS THE SAID AMOUNT HAS BEENPAID BY THE ASSESSEE IN KIND THROUGH FLATS. THE SAID PROJECT WAS COMPLETED IN 5 PHASES FROM 2001 TO F.Y 2004 - 05. THE LAND COST WAS CAPITALIZED. THE DETAILS OF THIS CAPITAL IZED COST IN RESPECT OF THE FLATS IN KIND INCURRED BY THE ASSESSEE WERE GIVEN AS UNDER : BLOCK NO. OF FLATS TOTAL AREA IN M2 COST OF FLATS IN KIND ADDED TO LAND COST REMARKS A 5 339.00 RS.19,07,560 IN F.Y 2000 - 01 ADDED TO THE COST OF LAND B 5 359.50 RS.20,20,093 IN F.Y 2001 - 02 ADDED TO THE COST OF LAND C 4 283.00 RS.15,92,441 IN F.Y 2002 - 03 ADDED TO THE COST OF LAND D 0 0 NIL ADDED TO THE COST OF LAND E 1 112.00 RS.6,30,226 IN F.Y 2003 - 04 ADDED TO THE COST OF LAND TOTAL 15 FLATS 1,093.50 M2 RS. 61,50,320 ADDED TO THE COST OF LAND DURING THE YEAR, COST OF FLAT RS. 25,66,999/ - WAS DEBITED TOWARDS THE COST OF THE LAND. OVER THE CONSTRUCTION PERIOD OF 5 YEARS, THE TOTAL AMOUNT PAID WAS RS.1,03,40,320/ - WHICH INCLUDES THE SUM OF RS.4,00,000/ - INCURRED IN CASH INITIALLY. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, A SUM OF RS.29,66,999/ - TOWARDS THE COST OF THE LAND FOR CONSTRUCTED AREA OF 1695 SQ. MTRS. @ RS.1,750/ - PER SQ. MTR. PERTAINING TO THE FLATS/SHOPS SOLD WAS DEBITED. THE AO WAS NOT SATISFIED AND HE MADE THE ADDITION OF RS.25,66,999/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CI T(A) . CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 8. I HAVE GONE THOUGH THE ASSESSMENT ORDER, CONTENTIONS OF THE APPELLANT AND OTHER RELEVANT DETAILS AND DOCUMENTS. IN MY OPINION, THE APPELLANT HAD PRODUCED 3 ITA NO. 155/PNJ/2013 (ASST. YEAR : 2005 - 06) ALL THE NECESSARY DETAILS AND DOCUMENTS BEFORE THE A.O., HOWEVER, THE A.O. DID NOT APPRECIATE THE ENTRIES MADE BY THE APPELLANT IN ITS BOOKS. THE APPELLANT DEBITED THE COST OF LAND IN ITS BOOKS, TO FIXED ASSET AND AGAIN COST INCURRED ON FLATS, GIVEN IN KIND, ON COMPLE TI ON OF EACH BLOCK WAS DEBITED TO COST OF LAND IN THE RESPECTIVE YEARS. THE APPELLANT CHARGED COST OF LAND PERTAINING TO EACH BLOCK CONSIDERING THE TOTAL C ONSIDERATION INCLUDING COST OF FLATS GIVEN IN KIND. IT IS CLEAR THAT THE A.O. TOOK THE FIGURE OF RS.29 ,66,9 9 9/ - FROM TH E BOOKS OF THE APPELLANT ITSELF, REDUCED RS. 4,00,000/ - FROM IT AND BALANCE AMOUNT OF RS. 25,66,999/ - HAS BEEN DISALLOWED, BASED ON WRONG ASSUMPTIONS. 9. THUS, ON THE BASIS OF THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT, IT CAN BE CONCLUDED THAT THE APPELLANT HAD CORRECTLY DEBITED AN AMOUNT OF RS . 29,66,999/ - IN ITS P & L ACCOUNT TOWARDS COST OF LAND AND THERE HAS BEEN NO UNDER VALUATION OR OVER VALUATION OR SUPPRESSION OF ANY KIND ON THIS ACCOUNT. THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS. 25,66,999/ - ACCORDINGLY. THIS GRO UN D OF APPEAL OF THE APPELLANT IS ALLOWED ACCORDING LY . 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE HAVE ALSO GONE THROUGH THE PROFIT & LOSS ACCOUNT FOR EACH OF THE ASSESSMENT YEAR AS WEL L AS SUMMARY OF THE HISTORY OF LAND AT DABOLIM. IT IS NOT DENIED THAT THE ASSESSEE HAS PURCHASED THE LAND. PART OF THE CONSIDERATION WAS PAID IN CASH AMOUNTING TO RS. 4 LACS TO THE ORIGINAL OWNER AND PART OF THE CONSIDERATI ON WAS PAID BY WAY OF 6 FLATS. THE ASSESSEE WAS ALSO REQUIRED TO PAY AN AMOUNT OF RS. 29 LACS TO M/S. PRI ME BUILDERS AND 7 FLATS IN KIND AND 2 FLATS IN KIND TO THE CARETAKERS. THUS, THE CONSIDERATION FOR TOTAL LAND OF 8000 SQ. MTRS. WAS RS. 33 LACS AND 15 FLATS IN KIND. THE TOTAL CON SIDERATION IN CASH AND KIND AS PER THE CHART FILED BY THE ASSESSEE WAS RS.1,03,40,320/ - FOR THE SALEABLE BUILT - UP AREA OF 6057 SQ. MTRS. GIVING AN AVERAGE COST OF RS.1,704/ - PER SQ. MTR. OVER A PERIOD OF 5 YEARS WHICH WERE APPORTIONED BY THE ASSESSEE IN THE YEAR IN WHICH THE FLATS WERE BUILT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DEBITED ONLY THE APPORTIONED COST INCLUDING PART OF THE COST INCURRED ON THE FLAT GIVEN IN KIND WHILE CALCULATING THE PROFIT ON THE SALE OF THE FLATS. IN TH E EARLIER YEAR, NO ACTION HAS BEEN TAKEN BY THE AO IN THE PROFIT BEING COMPUTED IN 4 ITA NO. 155/PNJ/2013 (ASST. YEAR : 2005 - 06) THIS MANNER. IN VIEW OF THIS FACT, IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A). CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE. 4. IN THE RESULT, TH E APPEAL FILED BY THE REVENUE STANDS DISMISSED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON 08 /08/2013. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 08 /08/ 2013 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT, PANAJI (4) CIT(A), PANAJI (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER SR. P RIVATE S ECRETARY ITAT, PANAJI, GOA