The ACIT,PatanCircle, Patan V. Shri Girishbhai Babaldas Patel, Patan

ITA 1740/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0556 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-01-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 06-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Difference of opinion

Judgement Text

, , , , A, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , , , , ! ' # ! ' # ! ' # ! ' # $ %& $ %& $ %& $ %&, , , , ' ' ' ' ' ' ' ' BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND KUL BHARAT, JUDICIAL MEMBER) ITA. NOS.1739 AND 1740/AHD/2012 ASSTT. YEAR : 2008-2009 & 2009-2010 ASSTT.CIT, PATAN CIRCLE. ( /VS. SHRI GIRISHBHAI BABALDAS PATEL 37, ARBUDANAGAR, VIBHAG-2 B/H. GEB SUBSTATION PATAN 384265 PAN : ACDPP 8416 C ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .' / 0 / REVENUE BY : SHRI RAHUL KUMAR ( 2& / 0 / ASSESSEE BY : SHRI GAURAV NAHTA $(3 / &4!/ DATE OF HEARING : 24 TH JANUARY, 2013 56 / &4!/ DATE OF PRONOUNCEMENT : 28 TH FEBRUARY, 2013 O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER: BOTH THESE APPEALS ARE FILED BY THE REVENUE, WHICH ARE DIRECTE D AGAINST THE ORDER OF THE LEARNED CIT(A), GANDHINAGAR DATED 11.5.2012 FOR ASSESSMENT ITA. NOS.1739 AND 1740/AHD/2012 -2- YEAR 2008-09 AND 2009-10. BOTH THESE APPEALS WERE HEARD TOGETHER, AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORD ER FOR THE SAKE OF CONVENIENCE. 2. THE GROUND NO.1 IN BOTH THE YEARS IS INTER-CONNE CTED, WHICH IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE AO FOR RS.37,98,900/- FOR A.Y.2008-09 AND RS.1,35,43,500/- FOR A.Y.2009-10 MADE ON ACCOUN T OF UNDISCLOSED INCOME FROM SALE PROPERTIES WHICH WAS O FFERED BY THE ASSESSEE AT THE TIME OF SURVEY PROCEEDINGS. 3. THE BRIEF FACTS, ON THIS ISSUE ARE THAT, IT IS N OTED BY THE AO IN PARA-4 OF THE ASSESSMENT ORDER FOR A.Y 2008-2009 TH AT THERE WAS A SURVEY CARRIED OUT IN THE CASE OF THE ASSESSEE ON 1 1-9-2007 IN WHICH THE ASSESSEE HAS ADMITTED UNDISCLOSED INCOME OF RS. 1,03,23,900/- FOR A.Y.2008-2009. BUT IN THE COURSE OF ASSESSMENT OF T HAT YEAR, IT WAS SEEN BY THE AO THAT THE ASSESSEE HAS NOT OFFERED TH IS MUCH AMOUNT IN THE RETURN OF INCOME AND HAS ONLY OFFERED RS.65,00, 000/- UNDER THE HEAD OTHER SOURCES ON ACCOUNT OF INCOME EARNED IN INVESTMENTS. THEREFORE, THE AO ISSUED SHOW CAUSE NOTICE TO THE A SSESSEE AS TO WHY THE BALANCE AMOUNT OF RS.38,23,900/- SHOULD NOT BE ADDED IN THE TOTAL INCOME. VARIOUS REPLIES WERE SUBMITTED BY THE ASSE SSEE BEFORE THE AO, AND AFTER CONSIDERING THE SAME, THE AO WAS NOT SATISFIED AND MADE ADDITION IN A.Y.2008-2009. SIMILARLY, IN A.Y. 2009-2010 ALSO, IT WAS NOTED BY THE AO IN THE ASSESSMENT ORDER THAT IN COURSE OF SURVEY, THE ASSESSEE HAS DECLARED AN INCOME OF RS.1 ,96,43,500/- FOR A.Y.2009-2010, BUT THE INCOME DECLARED IN THIS YEAR BY THE ASSESSEE ON ACCOUNT OF INCOME EARNED FROM INVESTMENT WAS ONL Y RS.61 LAKHS, ITA. NOS.1739 AND 1740/AHD/2012 -3- AND HENCE, THE AO ISSUED SHOW CAUSE NOTICE TO THE A SSESSEE AS TO WHY THE BALANCE INCOME OF RS.1,35,43,500/- SHOULD NOT B E TAXED IN THE HANDS OF THE ASSESSEE IN A.Y.2009-2010. VARIOUS RE PLIES WERE SUBMITTED BY THE ASSESSEE IN THAT YEAR ALSO, BUT AO WAS NOT SATISFIED AND MADE ADDITION OF THIS AMOUNT OF RS.1,35,43,500/ - IN A.Y.2009- 2010 ALSO. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) ON THIS ISSUE IN BOTH THE YEARS. AS PER THE COMBINED ORDER PASSED BY THE CIT(A), HE DELETED THE ENTIRE ADDITION FOR BOTH THE YEARS, AND NOW THE REVENUE IS IN APPEA L BEFORE US IN BOTH THE YEARS. 5. THE LEARNED DR SUPPORTED THE ORDERS OF THE AO, W HEREAS THE LEARNED AR SUPPORTED THE ORDERS OF THE LEARNED CIT( A). HE ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE CHHA TISGARH HIGH COURT, RENDERED IN THE CASE OF INCOME-TAX OFFICER V S VIJAY KUMAR KESAR (CHHATTISGARH) AS REPORTED IN 327 ITR 497. HE ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE GUJARAT HIG H COURT RENDERED IN THE CASE OF S. R. KOSHTI VS COMMISSIONER OF INCO ME-TAX (GUJ), AS REPORTED IN 276 ITR 165 (GUJ). 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE BASIS OF THE ADDITION MADE BY THE AO IN BOTH THE YEARS IS THE STATEMENT GIVEN BY THE ASSESSEE IN THE COURSE O F SURVEY, AND SINCE THE AMOUNT DECLARED BY THE ASSESSEE IN THE RETURN O F INCOME FOR THESE TWO YEARS WAS LESS THAN THE AMOUNT DISCLOSED IN THE SURVEY PROCEEDINGS, THE AO MADE ADDITION FOR DIFFERENTIAL AMOUNT IN BOTH THE ITA. NOS.1739 AND 1740/AHD/2012 -4- YEARS. THIS ADDITION IN BOTH THE YEARS WERE DELETE D BY THE LEARNED CIT(A), AS PER PARA 12.4 AT PAGE NO.20 TO 24 OF HIS ORDER, AND FOR THE SAKE OF CONVENIENCE, THESE PARAS OF THE ORDER OF TH E LEARNED CIT(A) ARE REPRODUCED BELOW. 12.4 I HAVE CONSIDERED SUBMISSIONS OF THE APPELLA NT, ASSESSMENT ORDER, FACTS OF THE CASE AND EVIDENCES F URNISHED BY THE APPELLANT. THERE IS NO DISPUTE BETWEEN THE APPELLAN T AND THE AO ON THE BASIC FACTS THAT THE TWO LANDS IN QUESTION WERE AGREED TO BE PURCHASED (1) LIMBODIWADI LAND WHOSE SURVEY NO IS 2 65 WAS PURCHASED WITH RATE OF RS. 39 LACS PER VIGHA, IT WA S OF 8.5 VIGHA WHICH AMOUNTS TO RS. 3,31,50,000/-. ON PAGE NO.12 S ALE IS SHOWN AMOUNTING TO RS.5,27,93,500/- WITH REFERENCE TO RS. 62.11 LACS PER VIGHA AND THE DIFFERENCE IS OF RS.1,96,43,500/- (II ) ON PAGE NO. 11 OF ANN. A-3 ON SURVEY NO. 358/2, THE AMOUNT OF THE SAL E IS WRITTEN AS 3,51,64,000 AND ON THE BACK OF PAGE NO.9 THE FIGURE OF RESALE VALUE IS WRITTEN AS 4,54,87,900/-. THE DIFFERENCE OF THE ABO VE IS RS.1,03,23,900/-WHICH IS NOT SHOWN IN THE BOOKS OF ACCOUNTS, THE APPELLANT HAS NOT RESCINDED FROM THE BASIC FACT S ADMITTED DURING THE SURVEY, AS ABOVE. THE BASIC DIFFERENCE OF OPINION BETWEEN THE AO AND THE APPELLANT NOW IS WHEN THE PROFIT ACCRUED AND IN WHI CH YEAR THESE SHOULD BE BROUGHT TO TAX. WHILE THE AO IS SEE KING TO TAX ON THE BASIS OF THE STATEMENT OF THE APPELLANT ALONE, WITHOUT ANY OTHER FACTUAL OR LEGAL REASON; I AGREE WITH THE APP ELLANT FULLY THAT THOUGH HE WAS AWARE OF THE FACTS, HE COULD NOT BE ACCEPTED TO KNOW THE ENTIRE LAW REGARDING TAXABILITY AND ACC RUAL AT THE TIME OF SURVEY. HE HAS PLEADED THAT THE DEALING IN LAND WERE VERBAL CONTRACT AND NO BANAKHAT OR WRITTEN AGREEMEN T WHATSOEVER WERE ENTERED INTO. THE AO HAS ALSO RELIE D ON THE NOTINGS IN A NOTE-BOOK FOUND DURING THE COURSE OF S URVEY AND THE STATEMENT OF THE APPELLANT; AND THERE IS NO CONTENT ION OF EVEN THE ITA. NOS.1739 AND 1740/AHD/2012 -5- DEPARTMENT THAT ANY WRITTEN AGREEMENTS/BHANAKHATS W ERE INDEED ENTERED INTO NOR WERE ANY FOUND DURING THE C OURSE OF THE SURVEY. FURTHER, THE APPELLANT HAS ALSO CONTENDED THAT THE LANDS WERE NOT TAKEN POSSESSION OF AND THEREFORE, NOT GIV EN POSSESSION TO THE PURCHASER BEFORE THE DATE OF SURVEY. HAVING CONSIDERED ALL FACTS AND THE POSITION OF L AW, I AM OF THE DEFINITE OPINION THAT THE STATEMENTS OF THE APP ELLANT SUPPORTED BY THE DOCUMENTS AND OTHER EVIDENCES CAN BIND HIM ONLY TO THE FACTS, ADMITTED. THE TAXABILITY HAS TO BE DETERMINED AS PE R THE CORRECT LAW. NOW, THE TRANSACTIONS ARE IN RESPECT OF IMMOVABLE PROPERTIES. THE IMMOVABLE PROPERTIES CAN BE CONSIDE RED TO BE TRANSFERRED (PURCHASED OR SOLD) IN THE YEAR IN WHIC H THE REGISTERED SALE DEED IS EXECUTED OR UNDER SECTION 2 (47)( V), ANY TRANSACTION INVOLVING ALLOWING OF POSSESSION TO BE TAKEN OVER OR RETAINED IN PART-PERFORMANCE OF A CONTRACT OF THE N ATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPE RTY ACT WOULD COME WITHIN THE AMBIT.OF SECTION 2(47)(V ). IN ORDE R TO ATTRACT SECTION 53A, THE FOLLOWING CONDITIONS NEED TO BE FU LFILLED. THERE SHOULD BE A CONTRACT FOR CONSIDERATION; IT SHOULD B E IN WRITING; IT SHOULD BE SIGNED BY THE TRANSFEROR; IT SHOULD PE RTAIN TO TRANSFER OF IMMOVABLE PROPERTY; THE TRANSFEREE SHOU LD HAVE TAKEN POSSESSION OF THE PROPERTY; LASTLY THE TRANSF EREE SHOULD BE READY AND WILLING TO PERFORM HIS PART OF THE CONTRA CT. (HON'BLE MUMBAI HIGH COURT IN THE CASE OF CHATURBHUJ DWARDKA DAS KAPADIA VS CIT-260 ITR 491).IT IS CLEAR THAT THE CO MPLETE PURCHASE AND SALE OF THE PROPERTIES AS PER LAW, DID NOT TAKE ITA. NOS.1739 AND 1740/AHD/2012 -6- PLACE TILL THE DATE OF SURVEY AND AS THE APPELLANT IS ADMITTING THAT THESE WERE COMPLETED AFTER SURVEY IN THAT ASSE SSMENT YEAR, ITSELF, THE TOTAL INCOME OF THESE TRANSACTIONS SHOU LD BE OFFERED AND TAXED BY THAT YEAR I.E. ASST. YR. 2010-11. NOW, PERCENTAGE COMPLETION METHOD IS RECOGNIZED METHOD IN THE CASE OF VARIOUS PROJECTS PARTICULARLY HOUSING PROJECTS; AS PER CLAUSE 7.1 OF AS-7 PATE ENTERPRISE S VS. DCIT; ITAT PUNE 'A' BENCH- 125 TTJ 974. HERE ALSO, THE A SSESSEE HAS ENTERED INTO AGREEMENT OF PURCHASING AND SELLING OF THE LANDS WHICH WERE NOT TO BE EXECUTED IMMEDIATELY AND LONG PERIOD OF 3 YEARS ETC., WERE GIVEN FOR THIS PURPOSE. AT THE MOS T, THE DEPARTMENT CAN ATTEMPT TO TAX THE INCOMES AS SOON AS THE PERCENTAGE PAYMENTS FOR SALES ARE RECEIVED. THE NOT ING IN THE DIARIES ARE THE ONLY RELIABLE EVIDENCE IN THIS REGA RD, PARTICULARLY WHERE NEITHER THE DEPARTMENT NOR THE A PPELLANT IS CONTESTING THEM. AS PER THE NOTING THE SHAILJA LAND WAS AGREED TO BE PURCHASED IN JUNE, 2007 AND THE APPELLANT IS SUBMITTING THAT IT WAS AGREED TO BE SOLD IMMEDIATELY WITHIN A SHORT TIME. AS PER NOTING, 15% PAYMENT WAS RECEIVED FROM THE BU YER AND THEN 10% WAS RECEIVED IN JUNE, 2008. BY THE PREPOND ERANCE OF PROBABILITY, IT CAN BE SAID THAT 15% PAYMENT WAS RE CEIVED BEFORE MARCH, 2008 I.E. IN AY 2008-09. NO FURTHER P AYMENTS HAVE BEEN RECEIVED ON THE SALE OF THIS LAND AS PER THE NOTING TILL THE DATE OF SURVEY. THEREFORE, AT THE MOST 15% OF T HE PROFIT OF THIS LAND IS PROVED TAXABLE IN AY 2008-09 AND FURTH ER 10% IN AY 2009-10 AND IT IS NOT THE CASE OF THE AO THAT IT HAS NOT BEEN OFFERED EVEN TO THIS EXTENT. SIMILARLY, AS PER THE NOTING, THE LIMBODIWADI LAND WAS AGREED TO BE PURCHASED IN JULY, 2008 AND THE APPELL ANT IS SUBMITTING THAT IT WAS AGREED TO BE SOLD IMMEDIATEL Y WITHIN SHORT TIME. AS PER PAGE 12 OF ANNEXURE A/4 NOTING, RS.5 LAC WAS ITA. NOS.1739 AND 1740/AHD/2012 -7- RECEIVED ON 24/09/2009 (AY 2010-11) AND FURTHER 25' /0 I.E. RS.13198375 PAYMENT WAS TO BE RECEIVED ON 30/11/200 9 I.E. AFTER THE DATE OF SURVEY. AS PER PAGE NO. 25, THE B ALANCE PAYMENT WAS TO BE RECEIVED ONLY AFTER 2 YEARS OF THE VERBAL AGREEMENT TO SALE. THEREFORE, ONLY RS.5 LAC PAYMENT HAVE BEEN PROVED TO BE RECEIVED (THAT TOO ONLY IN AY 2010-11) ON THE SALE OF THIS LAND TILL THE DATE OF SURVEY AS PER THE NOT ING. THEREFORE, AS PER THE ACCRUAL OF INCOME AND THE PERCENTAGE COMPLETION OF THE CONTRACT (IN ABSENCE O F ACTUAL TRANSFER OF LANDS NEITHER BY REGISTRY NOR UNDER SEC TION 2(47)(V), IN PART-PERFORMANCE OF A CONTRACT OF THE NATURE REF ERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT) THE AS SESSEE WAS ONLY LIABLE TO BE TAXED ON INCOME OF 25%'OF TOTAL U LTIMATE PROFITS ON SHAILJA LAND TILL (INCLUDING ASSESSMENT YEAR 2008-09) ASSESSMENT YEAR 2009-10. IN FACT, THE TAXABILITY OF THE ENTIRE PROFIT OF LIMBODIWADI LAND CAN BE FORCED UPON THE A PPELLANT EARLIEST IN AY 2010-11. THE APPELLANT HA$ , SHOWN M ORE THAN THESE PROFITS IN THESE YEARS WITHOUT ANY DOUBT. THE Y APPELLANT IS ALSO BOUND TO SHOW THE REMAINING PROFITS IN AY 2010 -11 AS IT HAS ADMITTED THAT THE COMPLETE TRANSACTIONS HAVE BE EN COMPLETED IN THAT YEAR. ANOTHER PLEA WHICH THE APPE LLANT IS TAKING IN THE APPELLATE PROCEEDINGS IS REGARDING TH E DEDUCTION IN PROFITS BY WAY OF EXPENSES I.E. RS. 10 LAC FOR A PPROACH ROAD IN SHAILJA LAND AND RS.3,25,000/DALALI EXPENSES OF LIMBODIWADI LAND. ALTHOUGH, THE CLAIM IS APPARENTLY SUPPORTED BY THE TRANSACTIONS RECORDED IN IMPOUNDED DOCUMENTS , NO SUCH STAND WAS TAKEN BEFORE THE AO. FURTHER, EVEN IN THE STATEMENTS AT THE TIME OF SURVEY, THE APPELLANT HAS STATED THA T THE ENTIRE DIFFERENCE OF SALES AND PURCHASE PRICE IS HIS INCOM E. THE AO IS FREE TO EXAMINE THIS CLAIM AND DECIDE AS HE DEEMS F IT, WHILE ASSESSING THE INCOME FOR AY 2010-11 AFTER CONSIDERA TION OF ALL ITA. NOS.1739 AND 1740/AHD/2012 -8- THE RELEVANT FACTS AND GIVING THE ASSESSEE OPPORTUN ITY OF BEING HEARD. AS THE INCOMES OFFERED ON THESE AGREEMENT OF SALE OF PROPERTIES IS NOT LESS THAN THAT PROVED TO HAVE ACC RUED IN THE 2 ASSESSMENT YEARS; NO ADDITIONS ON THESE ACCOUNTS AR E WARRANTED, IN THESE YEARS. ACCORDINGLY, THE ADDITIONS MADE FOR DIFFERENTIAL INCOME IN BOTH THE YEARS ARE DELETED. THE GROUNDS ARE ALLO WED. 7. FROM THE ABOVE ORDER OF THE LEARNED CIT(A), WE F IND THAT A FINDING IS GIVEN BY THE LEARNED CIT(A) THAT IN RESP ECT OF IMMOVABLE PROPERTIES, IT COULD BE CONSIDERED TO HAVE BEEN TRA NSFERRED IN THE YEAR IN WHICH REGISTERED SALE DEED IS EXECUTED OR UNDER SECTION 2(47)(V) AND ANY TRANSACTION INVOLVING ALLOWING OF POSSESSIO N TO BE TAKEN OVER OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF TH E NATURE, REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, WOU LD COME WITHIN THE AMBIT OF SECTION 2(47)(V). THE LEARNED CIT(A) HAS NOTED THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CHATURBHUJ DWARDKADAS KAPADIA VS. CIT, 260 ITR 491 AND HAS NOTED CERTAIN CRITERION FOR THE PURPOSE OF INVOKING THE P ROVISIONS OF SECTION 2(47)(V). HE HAS ALSO NOTED THAT THERE SHOULD BE A CONTRACT FOR CONSIDERATION, IT SHOULD BE IN WRITING AND IT SHOUL D BE SIGNED BY THE TRANSFEROR AND PERTAINED TO TRANSFER OF IMMOVABLE P ROPERTIES AND SHOULD HAVE TAKEN THE POSSESSION OF THE PROPERTY, A ND LASTLY, THE TRANSFEREE SHOULD BE READY AND WILLING TO PERFORM H IS PART OF THE CONTRACT. THE LEARNED CIT(A) HAS NOTED AT PAGE 23 OF HIS ORDER THAT AS PER THE NOTING IN THE DIARIES, THE SHAILJA LAND WAS AGREED TO BE PURCHASED IN JUNE, 2007 AND AS PER THE ASSESSEE, IT WAS AGREED TO BE SOLD IMMEDIATELY WITHIN A SHORT TIME. HE HAS FURTH ER NOTED THAT AS PER THE NOTING, 15% PAYMENTS WERE RECEIVED FROM THE BUY ER IN THAT YEAR ITA. NOS.1739 AND 1740/AHD/2012 -9- AND THEN 10% WAS RECEIVED IN JUNE, 2008. HE HAS AL SO NOTED THAT NO FURTHER PAYMENT WAS RECEIVED FOR THE SALE OF THIS L AND AS PER NOTING IN DAIRY TILL THE DATE OF SURVEY, AND HENCE, AS PER TH E LEARNED CIT(A), AT THE MOST, 15% OF THE PROFIT OF THIS LAND CAN BE TAX ED IN A.Y.2008- 2009 AND FURTHER 10% IN A.Y.2009-2010 AND IT IS NOT THE CASE OF THE REVENUE THAT, THE ASSESSEE HAS NOT OFFERED EVEN TO THIS EXTENT. THERE IS NO FINDING OF THE AO THAT WHOSE LAND IN QUESTION WAS TAKEN BY THE ASSESSEE IN THE RELEVANT YEARS, AND THE POSSESSION WAS HANDED OVER TO THE ULTIMATE BUYERS IN THESE RESPECTIVE YEARS I.E. SHAILJA LAND IN A.Y.2008-2009 AND LIMBODIWADI LAND IN A.Y.2009-10. REGARDING LIMBODIWADI LAND, IT WAS NOTED BY THE LEARNED CIT(A ) THAT ONLY RS.5 LAKHS HAVE BEEN RECEIVED IN A.Y.2010-11, AND ENTIRE BALANCE AMOUNT WAS RECEIVED AFTER THAT. HENCE, AS PER THE LEARNED CIT(A), THERE IS NO PART-PERFORMANCE OF THE CONTRACT OF THE NATURE REFE RRED TO IN SECTION 53A OF THE T.P. ACT, AND THEREFORE THE PROVISION OF SECTION 2(47)(V) OF THE IT ACT ARE NOT APPLICABLE IN RESPECT OF BOTH TH ESE LAND IN THESE TWO YEARS. THE LEARNED CIT(A) HAS WORKED OUT PROFIT ON PERCENTAGE COMPLETION METHOD AND HAS GIVEN A FINDING THAT THE PROFIT DECLARED BY THE AO IN THESE TWO YEARS, IS MORE THAN THE PROFIT TO BE DECLARED AS PER THE PERCENTAGE COMPLETION METHOD. HE HAS ALSO GIVE N A FINDING THAT TOTAL PROFIT DECLARED BY THE ASSESSEE IN THE COURSE OF SURVEY FOR THE ASSESSMENT YEARS 2008-2009 TO 2010-11 IS OF RS.6,29 ,65,650/- BEING THE TOTAL OF RS.1,03,23,900/- FOR A.Y.2008-2009, RS .1,96,43,500/- FOR A.Y.2009-2010 AND RS.3,29,98,650/- IN A.Y.2010-11. THIS FINDING OF LD. CIT(A) THAT THE PROVISIONS OF SECTION 2(47)IV) ARE NOT APPLICABLE IN THESE TWO YEARS COULD NOT BE CONTROVERTED BY LD. D.R. OF THE REVENUE. HENCE, IN FACT, NO PART OF PROFIT IN RESP ECT OF THESE LANDS IS TAXABLE IN THESE TWO YEARS AND ENTIRE PROFIT IS TAX ABLE IN ASSESSMENT ITA. NOS.1739 AND 1740/AHD/2012 -10- YEAR 2010-11 BUT SINCE THE ASSESSEE HAS SUO-MOTO DE CLARED THIS MUCH PROFIT IN THESE TWO YEAS AND THERE IS NO APPEAL OF THE ASSESSEE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD . CIT(A) BECAUSE IN THE ABSENCE OF SALE OF PROPERTY OR PART PERFORMANCE OF CONTRACT, NO PROFIT IS IN FACT TAXABLE IN THESE TWO YEAS AND IN THAT SITUATION, WHATEVER IS SUO-MOTO DECLARED BY THE ASSESSEE, CANN OT BE INCREASED IN THESE YEARS AND THE BALANCE PROFIT CAN BE TAXED ONL Y IN ASSESSMENT YEAR 2010-11 I.E. IN THE YEAR OF SALE. WE, THEREFO RE, DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE . THIS GROUND IS REJECTED IN BOTH THE YEARS. 8. NOW, WE TAKE UP GROUND NO.2 OF APPEAL IN ASSESSM ENT YEAR 2008-09 WHICH READS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION MADE BY THE A.O. FOR RS.1,35,050/- MADE ON ACCOUNT OF INTEREST LOSS OF HOUSE PROPERTY INCOME, DEDUCTIO N OF LIC EXPENSES & MEDI CLAIM. 9. LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHO RITIES BELOW. WE FIND THAT THIS ISSUE WAS DECIDED BY LD. CIT(A) AS P ER PARA 13.3 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF RE ADY REFERENCE: I HAVE CONSIDERED SUBMISSIONS OF THE APPELLANT, AS SESSMENT ORDER, FACTS OF THE CASE AND EVIDENCES FURNISHED BY THE APPELLANT, IT IS SEEN THAT THE APPELLANT HA OFFERED INCOMES OF RS.65,00,000/- IN THE ASSESSMENT YEAR 20008-09, THE REFORE, ON A CONSIDERATION OF THE FACTS ON RECORDS, THE CONTENTI ONS MADE BY THE APPELLANT AND AS PER PROVISIONS OF THE ACT, I A M OF THE OPINION THAT THE INTEREST LOSS OF HOUSE PROPERTY IS DEDUCTIBLE FROM OTHER INCOMES AND DEDUCTION OF LIC AND MEDI-CL AIM ARE DEDUCTIBLE FROM GROSS TOTAL INCOME AS PER PROVISION OF THE INCOME TAX ACT, 1961. ACCORDINGLY, THE A.O. IS DIR ECTED TO ITA. NOS.1739 AND 1740/AHD/2012 -11- ALLOW BOTH THE CLAIMS AND ADDITION OF/RS.1,35,050/- IS DELETED. THE GROUND IS ALLOWED. 11. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT THERE IS INTEREST LOSS ON HOUSE PROPERTY DEDUCTIBL E FROM OTHER INCOME AND DEDUCTION ON ACCOUNT OF LIC PAYMENT AND MEDI-CL AIM ARE DEDUCTED FROM GROSS TOTAL INCOME AS PER THE PROVISI ONS OF THE INCOME TAX ACT, 1961. WE DO NOT FIND ANY MISTAKE IN THE F INDING OF LD. CIT(A) AND HENCE, WE DECLINE TO INTERFERE IN HIS OR DER ON THIS ISSUE ALSO. THIS GROUND IS ALSO REJECTED. 12. NOW, WE TAKE UP GROUND NO.2 OF THE REVENUES AP PEAL FOR ASSESSMENT YEAR 1009-10 WHICH READS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION MADE BY THE A.O. OF RS.3,18,373/- MADE ON THE BASIS OF AMOUNT REFLECTED IN TDS CERTIFICATES. 13. LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHO RITIES BELOW. WE FIND THAT THIS ISSUE WAS DECIDED BY LD. CIT(A) AS P ER PARA 14.3 OF HIS ORDER WHICH READS AS UNDER: I HAVE CONSIDERED SUBMISSIONS OF THE APPELLANT, AS SESSMENT ORDER, FACTS OF THE CASE AND EVIDENCES FURNISHED BY THE APPELLANT, IT IS SEEN THAT THE APPELLANT HAS OFFERE D INCOME FROM CONTRACT OF RS.2,65,137/- (TOTALLY MISSED BY THE AO ) AND BANK INTEREST OF RS.10,596/- IN PROFIT & LOSS ACCOUNT AS WELL AS INCOME TAX RETURN OF A.Y. 2009-10. AS PER THE PROVI SIONS OF SECTION 44AD, INCOME FROM CONTRACT WORK CANNOT BE L ESS THAN 8% OF THE RECEIPTS, WHEREAS THE APPELLANT HAS SHOWN 8.35%, THEREFORE, I AM OF THE OPINION THAT THE APPELLANT H AS OFFERED BOTH THE INCOMES PROPERLY. ACCORDINGLY, THE AO IS DIRECT ED TO DELETE ESTIMATED ADDITION OF RS.3,18,373/-. THE GROUND IS ALLOWED. ITA. NOS.1739 AND 1740/AHD/2012 -12- 15. FROM THE ABOVE PARA O THE ORDER OF LD. CIT(A) W E FIND THAT A CLEAR FINDING IS GIVEN BY LD. CIT(A) THAT THE ASSES SEE HAS OFFERED INCOME FROM CONTRACT OF RS.2,65,137/- WHICH IS TOTA LLY MISSED BY THE A.O. AND BANK INTEREST OF RS.10,596/- WAS ALSO OFFE RED BY THE ASSESSEE IN THE P & L ACCOUNT AS WELL AS IN INCOME TAX RETUR N FOR THIS YEAR. HE HAS ALSO GIVEN FINDING THAT AS PER THE PROVISION OF SECTION 44AD, INCOME FROM CONTRACT WORK CANNOT BE LESS THAN 8% OF THE RECEIPT BUT THE ASSESSEE HAS SHOWN INCOME @ 8.35%. THESE FINDI NGS OF LD. CIT(A) COULD NOT BE CONTROVERTED BY THE LD. D.R. AN D THEREFORE, WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE ALSO. THIS GROUND IS ALSO REJECTED. 16. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. 17. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENT IONED HEREINABOVE. SD./- SD./- ( $ %& $ %& $ %& $ %& /KUL BHARAT) ' ' ' ' /JUDICIAL MEMBER VIJAY/SP. ( . .. . . .. . /A.K. GARODIA) ! ' ! ' ! ' ! ' /ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD ITA. NOS.1739 AND 1740/AHD/2012 -13- 1. DATE OF DICTATION : 08-02-2013 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER. : 11/12-02- 2013/20.02.2013 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT. : 28/02/2013 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 28/02/2013 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 28/02/2013 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER :