The ACIT, Circle-5, RAJKOT-GUJARAT V. M/s. Chandraprabha Builders Pvt. Ltd., RAJKOT-GUJARAT

ITA 285/RJT/2011

• Counselvise Citation: 28524914 RSA 2011
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 21-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K PRABHAKAR
• Assessee Lawyers: RM MANEK
• Keywords: Sale consideration of property below Jantri Value; Business income
• Section: 69C; 143(3); 50C; 80IB; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.285/RJT/2011 (ASSESSMENT YEAR 2004-05) ACIT, CIR.5 VS M/S CHANDRAPRABHA BUILDERS RAJKOT PVT LTD, NILKANTH PARK B/H NILKANTH CINEMA RAJKOT PAN : AAACC8583F (APPELLANT) (RESPONDENT) DATE OF HEARING : 01-12-2011 DATE OF PRONOUNCEMENT : 02-12-2011 APPELLANT BY : SHRI K PRABHAKAR RESPONDENT BY: RM MANEK O R D E R PER T.K. SHARMA (JM) THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DA TED 07-03-2011 PASSED BY THE CIT(A)-XXI, RAJKOT FOR THE ASSESSMENT YEAR 2 004-05. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION ACTIVITIES AS WELL AS LAND DEVELOPER. FOR THE ASSESSMENT YEAR UNDER APPEAL IT FILED THE RETURN OF INCOME DECLARING INCOME AT NIL AFTER CLAIMING DEDUCTION U/S 80IB(10) AMOUNTING TO RS.8,04,524. THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 143(3) ON 18-12-2006 WHEREIN HE MADE ADDITION OF RS.6,70,538 U/S 50C OF THE I.T. AC T, AS UNDER: 4. VALUATION U/S 50C OF THE I.T. ACT, 1961 DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SOLD CERTAIN PROPERTIES. IN THIS CONNECTION VIDE THIS O FFICE SUMMONS U/S ITA NO.285/RJT/2011 2 133(6) DTD. 20-11-2006, THE DEPUTY COLLECTOR, STAMP DUTY DEPARTMENT, RAJKOT WAS REQUESTED TO FURNISH THE VAL UATION MADE FOR THE PURPOSE OF DETERMINATION OF STAMP DUTY. THE DE PUTY COLLECTOR, STAMP DUTY DEPARTMENT, RAJKOT VIDE LETTER DTD. 1-12 -2006 HAS PROVIDED THE DETAILS. THE SAME ARE GIVEN AS UNDER: SR. NO. REGIST RATION NO. NAME OF PURCHASER VALUE REGISTERED DOCUMENT VALUE DETERMINE D BY THE DY.COLLECT OR DIFF. 1 2791 VALLABHBHAI DEVSHIBHAI GADHIA 128266/- 552294/- 374028 2 4417 PANKAJBHAI CHAVDA 350000/- 478910/- 128910/- 3 3083 RAMJIBHAI NATHUBHAI THUMAR 300000/- 467600/- (BY SUB REGISTRAR) 167600/- TOTAL 670538/- 3. ON APPEAL BEFORE THE LD.CIT(A) DIRECTED THE ASSE SSING OFFICER TO TREAT THE INCOME OF RS.6,70,538 AS REGULAR BUSINESS INCOME AN D ALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE I.T. ACT, 1961. AGGR IEVED WITH THE ORDER OF LD.CIT(A) THE REVENUE IS IN APPEAL BEFORE THE TRIBU NAL ON THE FOLLOWING GROUND: 1. THE LD.CIT(A)-XXI, AHMEDABAD HAS ERRED IN LAW A ND ON FACTS IN DIRECTING THE AO TO TAX THE AMOUNT FO RS.6 70538/- UNDER THE HEAD CAPITAL GAIN U/S 50C OF THE ACT, INSTEAD OF UN ACCOUNTED INCOME U/S 69C OF THE ACT AS HELD BY THE AO, WITHOU T APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICE R. 4. AT THE TIME OF HEARING, SHRI K PRABHAKAR, THE LD .DR RELIED UPON THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER AND CONTENDED THAT IN RESPECT OF ADDITION MADE U/S 50C, THE ASSES SEE IS NOT ENTITLED TO DEDUCTION CLAIMED U/S 80IB OF THE I.T. ACT,1961. ITA NO.285/RJT/2011 3 5. AS AGAINST THIS, SHRI RM MANEK APPEARED ON BEHAL F OF THE ASSESSEE POINTED OUT THAT NO SUCH GROUND HAS BEEN TAKEN BY T HE REVENUE IN ITS APPEAL. HE FURTHER SUBMITTED THAT THE ASSESSEE IS IN THE BUSIN ESS OF LAND DEVELOPER AND ITS ENTIRE INCOME IS EXEMPT U/S 80IB OF THE ACT. THERE FORE, THE VIEW TAKEN BY THE LD.CIT*(A) BE UPHELD. 6. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF AUTH ORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE ASSESSMENT THE ASSESS ING OFFICER HIMSELF HAS MENTIONED THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF CONSTRUCTION ACTIVITY AND ITS ENTIRE INCOME IS EXEMPT U/S 80IB OF THE I.T . ACT, 1961. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HIMSELF HAS TREATED THE ENTIRE INCOME DECLARED AS EXEMPT U/S 80IB OF THE ACT. THEREFORE, THE ADDITIO N OF RS.6,70,538 MADE IN THE ASSESSMENT ORDER IS ALSO NOTHING BUT BUSINESS INCOM E WHICH IS EXEMPT U/S 80IB OF THE ACT, 1961. IN THIS VIEW OF THE MATTER, WE D O NOT FIND ANY INFIRMITY WITH THE VIEW TAKEN BY THE LD.CIT(A) WHEREBY HE DIRECTED THE ASSESSING OFFICER TO TREAT THE INCOME OF RS.6,70,538 AS REGULAR BUSINESS INCOME AN D ALLOW CLAIM OF DEDUCTION U/S 80IB OF THE I.T. ACT, 1961. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER HAS BEEN PRONOUNCED ON THE DATE AS MENTI ONED ABOVE. SD/- SD/- (A.L. GEHLOT) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 02 ND DECEMBER, 2011 PK/- ITA NO.285/RJT/2011 4 COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-XXI, RAJKOT 4. THE CIT-III, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT