INCOME TAX OFFICER, WARD 9(3)(4), MUMBAI V. M/S. RADHE RAJ DEVELOPERS P.LTD., MUMBAI

ITA 3731/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8870 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 15-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 09-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MAYANK PRIYADARSHI
• Keywords: Income from undisclosed sources; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.3731/MUM/2009 A.Y 2005-06 INCOME TAX OFFICER, WARD 9 (3) (4), MUMBAI. VS. M/S RADHA RAJ DEVELOPERS P. LTD., SHOP NO.1, ALKA BUILDING, JAMNADAS ADUKIA ROAD, KANDIVALI (WEST), MUMBAI 400 067. PAN: AABCR 6087 Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAYANK PRIYADARSHI. RESPONDENT BY : SHRI RAJESH SHAH. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GR OUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT[A] ERRED IN ALLOWING DEDUCTION FOR MMC CHAR GES OF ` `` ` .6,86,241/- AND PROFESSIONAL CHARGES FOR LRS.75,900 /- WITHOUT APPRECIATING THE FACT THAT THE SAID EXPENSES PERTAI NED TO EARLIER YEARS AND IN VIEW OF THE HON'BLE SUPREME COURT DECI SION IN THE CASE OF KEDAR NATH JUTE MFG. CO. LTD. VS. CIT 8 ITR 263 [S.C] THE SAID EXPENSES WERE NOT ALLOWABLE AS DEDUCTION F ROM THE TOTAL INCOME OF THE ASSESSEE DURING THE A.Y 2005-06 . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT[A] ERRED IN DELETING THE ADDITION OF ` `` ` .15,73,250/- BEING DIFFERENCE BETWEEN MARKET VALUE AND TRANSFER VALUE AS PER BOOKS OF SCHOOL PLOT CTS 102 WITHOUT APPRECIATING T HAT THE ASSESSEE SOLD/TRANSFERRED PART OF PLOT AT A CONSIDE RABLY LOWER PRICE IN SPITE OF THE FACT THAT THE PREVAILING MARK ET RATE OF THE PLOT WAS MUCH HIGHER THAN THE TRANSFER PRICE SHOWN IN THE BOOKS. 2. GROUND NO.1 : AFTER HEARING BOTH THE PARTIES, WE FIND THAT DURI NG THE ASSESSMENT PROCEEDINGS AO NOTICED THAT ASSESSEE HAS SHOWN SALE OF MALAD PLOT AT ` `` ` .15,25,000/- AGAINST VARIOUS EXPENSES WERE CLAIMED. 2 ON VERIFICATION OF THE DETAILS FILED BY THE ASSESSE E IT WAS NOTED BY THE AO THAT FOLLOWING EXPENSES PERTAINED TO THE PREVIOU S YEAR: I. M.M.C. CHARGES (PERMANENT WATER FOR SHREE KRISHNA SOCIETY CONNECTION) ` `` ` .6,86,241/- II. BROKERAGE AKASH ESTATE AGENCY ` `` ` . 12,651/- III. PROFESSIONAL CHARGES ; B.M.BHUPATI ` `` ` . 75,900 ` `` ` .7,75,792/- IT WAS HELD BY THE AO THAT EXPENSES IN RESPECT OF S HREE KRISHNA PROJECT PERTAINED TO EARLIER YEAR AND, THEREFORE, SAME WAS NOT ALLOWABLE. 3. BEFORE THE CIT[A] IT WAS CLAIMED THAT ASSESSEE H AD APPLIED FOR OCCUPATION CERTIFICATE ON COMPLETION OF SHREE KRISH NA PROJECT AND MUNICIPAL CORPORATION HAD CARRIED OUT AN INSPECTION AND RAISED A DEMAND OF ` `` ` .5,60,150/- UNDER VARIOUS HEADS SUCH AS AMENDED PLA N, DEVELOPMENT CHARGES, OPEN SPACE, DEFICIENCIES ETC. THE CERTIFICATE WAS ISSUED ONLY WHEN THE PAYMENT WAS MADE ON 4-9-2002. IN RESPECT OF ` `` ` .90,970/- IT WAS STATED THAT THIS PERTAINS TO THE P AYMENT OF PROPERTY TAX FOR THE PERIOD 1-10-2004 TO 31-3-2005. THE TOTA L PROPERTY TAX DEMAND RAISED BY THE BMC WAS ` `` ` .2,91,763/- OUT OF WHICH ONLY ` `` ` .90,970/- WAS THE LIABILITY OF THE ASSESSEE AND THE BALANCE WAS TO BE PAID BY SHREE KRISHNA CO-OPERATIVE HSG. SOCIETY. IT WAS SUBMITTED THAT IT WAS THE RESPONSIBILITY OF THE ASSESSEE TO PAY TH E MUNICIPAL DUES TILL THE MANAGEMENT OF THE BUILDING WAS HANDED OVER TO T HE COOPERATIVE SOCIETY. IN RESPECT OF PAYMENT OF ` `` ` .34,560/-, IT WAS STATED THAT THE SAME WAS PAID TO MUNICIPAL CORPORATION AS MMC CHARG ES. IN RESPECT OF PAYMENT OF ` `` ` .75,900/- IT WAS EXPLAINED THAT SAME WAS MADE TO 3 ADVOCATE SHRI B.M.BHUTANI IN RESPECT OF AN APPLICAT ION FOR REGISTRATION OF SHREE KRISHNA CO-OPERATIVE HSG. SOCIETY UNDER SO CIETY REGULATION ACT AND THESE EXPENSES HAVE BEEN INCURRED DURING TH E YEAR. IN RESPECT OF SUM OF ` `` ` .12,651/- IT WAS EXPLAINED THAT SAME RELATES TO SER VICE TAX AGAINST THE BILL PERTAINING TO AKASH ESTATE AGENCY. SINCE THE BILL WAS TAKEN IN THE BOOKS OF ACCOUNTS AT ` `` ` .1,24,030/- AS AMOUNT OF SERVICE TAX, BY MISTAKE IT WAS NOT INCLUDED AND, THEREFORE, SAME COULD ALSO BE ALLOWED. 4. THE LD. CIT[A] AFTER CONSIDERING THESE SUBMISSIO NS, ALLOWED ALL THE EXPENSES EXCEPT FOR THE ITEM OF ` `` ` .12,651/- VIDE PARA-6 OF HIS ORDER WHICH IS AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE REASONING OF TH E AO AS WELL AS SUBMISSION OF THE APPELLANT. THE AO HAS MERELY DISA LLOWED THE EXPENDITURE SIMPLY ON ONE REASON THAT THE EXPENSE P ERTAINS TO EARLIER YEARS AS THE PROJECT WORK IN RESPECT OF SHREE KRISH AN PROJECT HAD BEEN COMPLETED IN THE EARLIER ACCOUNTING PERIOD. THE AO HAS NOT DISCUSSED THE FACTUAL ASPECTS AS BROUGHT BEFORE HIM BY THE AP PELLANT. THE APPELLANT IS IN THE BUSINESS OF CONSTRUCTION AND DE VELOPERS AND THE APPELLANT HAS INCURRED EXPENDITURE IN MUNICIPAL COR PORATION IN RESPECT OF THE PROJECTS UNDERTAKEN BY IT SINCE THE NATURE O F EXPENSES ARE NOT DISPUTED BY THE AO, I AM OF THE CONSIDERED VIEW THA T INTO ACCOUNT THE NATURE OF EXPENSES AS STATED BY THE APPELLANT IN IT S SUBMISSION THEY CANNOT BE HELD AS EXPENSES PERTAINING TO EARLIER YE ARS AND THEY ARE VERY MUCH PART OF THE BUSINESS ACTIVITIES AS CARRIED ON BY THE APPELLANT AND THEY HAVE BEEN INCURRED BY THE APPELLANT IN THE YEA R UNDER APPEAL AND AS SUCH THEY ARE ALLOWABLE EXPENDITURE. HOWEVER FRO M THE SUBMISSION AS FILED BY THE APPELLANT IT IS OBSERVED THAT THE EXPENSES OF ` `` ` .12,651/- AS SERVICE TAX PERTAINING TO BROKERAGE PAYMENT TO M /S AKASH ESTATE AGENCY THE EXPENDITURE IS CLEARLY OF PRIOR PERIOD I N NATURE. IT IS THE MISTAKE OF THE APPELLANT WHERE IT HAD NOT TAKEN INT O ACCOUNT THE SERVICE TAX IN ITS BOOKS OF ACCOUNTS WHEREAS EXPENDITURE HA S BEEN TAKEN INTO ACCOUNT BY IT IN THE EARLIER ASSESSMENT YEAR 2003-0 4 AND AS SUCH THE ABOVE EXPENDITURE ON ACCOUNT OF SERVICE TAX IS CLEA RLY FALLS IN THE EARLIER ASSESSMENT YEAR AND AS SUCH THE SAME IS NOT ALLOWABLE IN THE YEAR UNDER APPEAL. THEREFORE OUT OF THE TOTAL DISAL LOWANCE OF ` `` ` .7,74,792/- BARRING ` `` ` .12,651/- THE REMAINING AMOUNT OF ` `` ` .7,62,141/- 4 CONSIDERED AS ALLOWABLE AND THE DISALLOWANCE MADE I S HEREBY DELETED. THE APPELLANT GETS PART RELIEF ON THE ABOVE GROUND OF APPEAL. 5. BEFORE US LD. DR SUBMITTED THAT THE AO HAD GIVEN A CATEGORICAL FINDING THAT THE IMPUGNED EXPENSES WERE NOT INCURRE D DURING THE YEAR. BEFORE THE CIT[A] GENERAL EXPLANATION WAS GIVEN AND THE RELIEF HAS BEEN ALLOWED WITHOUT ANY VERIFICATION WHETHER EXPEN SES WERE INCURRED DURING THE YEAR OR NOT. NO MATERIAL WAS PRODUCED BE FORE THE CIT[A] THAT THE EXPENDITURE WAS REALLY INCURRED DURING THE YEAR. 6. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE R EFERRED TO PAGE-7 OF THE PAPER BOOK, WHICH IS A COPY OF THE LE TTER WRITTEN BY THE ASSESSEE TO M/S A. R. MEHTA & ASSOCIATES WHO WERE A RCHITECTS, WHEREIN DETAILS REGARDING VARIOUS DEMANDS RAISED BY THE MUNICIPAL CORPORATION HAVE BEEN MENTIONED AND THE ARCHITECT W AS REQUESTED TO OBTAIN THE OCCUPATION CERTIFICATE. THIS LETTER ALSO STATES THAT A DEMAND DRAFT IS BEING ENCLOSED. THEN HE REFERRED TO PAGE 8 OF THE PAPER BOOK WHICH IS A COPY OF THE RECEIPT ISSUED BY THE BMC WH ICH CLEARLY SHOWS THAT MONEY WAS PAID TOWARDS GOVERNMENT CHARGES FOR VARIOUS DEFICIENCIES. THEN HE REFERRED TO PAGE 12 OF THE PA PER BOOK WHICH IS A COPY OF THE TEST CERTIFICATE IN RESPECT OF WATER ME TER. HE ALSO REFERRED TO PAGE 13 OF THE PAPER BOOK WHICH IS A COPY OF THE SANCTION OF WATER CONNECTION. HE BASICALLY SUBMITTED THAT THE EXPENSE S WERE THOUGH RELATED TO SHREE KRISHNA PROJECT, BUT THEY WERE INC URRED DURING THE YEAR. THE BENCH PUT A SPECIFIC QUERY WHETHER ANY BI LL WAS RAISED BY THE BMC AND HE SUBMITTED THAT THE BILL WAS THERE BUT NO COPY WAS 5 FURNISHED BEFORE US. IN RESPECT OF PROPERTY TAX NO ARGUMENTS WERE MADE BEFORE US. IN RESPECT OF THE SUM OF ` `` ` .75,900/- PAID TO THE ADVOCATE FOR REGISTRATION OF SHREE KRISHNA CO-OPERA TIVE HSG. SOCIETY UNDER SOCIETY REGISTRATION ACT, IT WAS SUBMITTED TH AT IT IS THE DUTY OF THE BUILDER TO GET THE SOCIETY REGISTERED AND BILL IN THIS RESPECT WAS RAISED ON 8-7-2005, COPY OF WHICH IS AVAILABLE AT P AGE 17 AND THAT IS WHY LIABILITY OF THIS EXPENDITURE WAS CLAIMED IN TH IS YEAR. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT AO HAS DISALLOWED THE EXPENSES MAINLY BECAUSE THE E XPENDITURE RELATED TO THE PREVIOUS YEAR IN RESPECT OF THE SHRE E KRISHNA PROJECT WHICH IT SEEMS MUST HAVE BEEN COMPLETED EARLIER. TH E LD. CIT[A] HAS MAINLY GIVEN RELIEF BY HOLDING THAT ASSESSEE IS IN A CONSTRUCTION BUSINESS AND THE EXPENDITURE HAS BEEN INCURRED IN T HIS YEAR. HOWEVER, LD. CIT[A] HAS FAILED TO GIVE ANY SPECIFIC FINDING AS TO WHEN THAT EXPENDITURE WAS INCURRED. IF WE LOOK AT THE LETTER DATED 24-4-2004 WHICH HAS BEEN ADDRESSED BY THE ASSESSEE COMPANY TO ITS ARCHITECT AND READS AS UNDER: TO, M/S A.R.MEHTA & ASSOCIATES, SAIDEEP BUILDING, DAULAT NAGAR, BORIVALI (WEST). ---------------------------------------------- DATE: 23/04/ 04 REF:- FILE NO. CHE/A 0708 BP (WS) AR . DEAR SIR, 6 WE ARE SENDING HERWITH D.D. OF ` `` ` .5,60,150/- [RUPEES FIVE LACS SIXTY THOUSAND ONE HUNDRED FIFTY ONLY] BEARING D.D.NO. 56 0297 DT. 23/04/04 DRAWN FROM BANK OF BARODA, THE DETAILS OF THE PAYMENT ARE AS UNDER: 1) AMENDED PLAN FEES ` `` ` . 9,250/- 2) BALCONY ENCLOSURE ` `` ` . 27,000/- 3) IOD DEPOSIT ` `` ` . 3,550/- 4) STAIRCASE PREMIUM ` `` ` . 71,600/- 5) DEVELOPMENT CHARGES ` `` ` . 32,650/- 6) OPEN SPACE DEFICIENCY ` `` ` .1,24,700/- 7) REFIXING OF GUTTER PIPE LINE ` `` ` .2,44,100/- 8) REVALIDATION FEES ` `` ` . 7,000/- 9) CARRIAGE ENTRANCE FEES ` `` ` . 3,000/- 10) OCCUPATION CHARGES ` `` ` . 37,300/- ` `` ` .5,60,150/- ====== ====== ====== ====== THIS LETTER ITSELF SHOWS THAT DDS GOT PREPARED ON 2 4-4-04 WHICH FURTHER SHOWS THAT BILL BY THE BMC MUST HAVE BEEN RAISED ON THE ASSESSEE MUCH EARLIER. THOUGH LD. COUNSEL OF THE ASSESSEE IN VITED OUR ATTENTION TO THE RECEIPT [COPY OF WHICH IS PLACED AT PAGE 8 O F THE PAPER BOOK AND WHICH IS DATED 30-4-04] BUT DESPITE OUR QUERY, HE D ID NOT FURNISH COPY OF THE BILL, WHICH ONLY LEADS TO THE INFERENCE THAT BILL MUST BE DATED PRIOR TO 31-3-04. SINCE ASSESSEE IS FOLLOWING THE M ERCANTILE SYSTEM OF ACCOUNTING, IT WAS REQUIRED TO PROVIDE FOR ANY EXPE NSES ON ACCRUAL BASIS. IN THE CASE OF GOVERNMENT DUES, THE LAW IS S ETTLED THAT LIABILITY WOULD STAND CRYSTALISED ON THE DATE WHEN DEMAND IS RAISED, WHICH MUST HAVE BEEN PRIOR TO 31-3-2004 AND, ACCORDINGLY, THIS ITEM OF EXPENDITURE COULD NOT BE ALLOWED. 8. AS FAR AS BILL OF ADVOCATE IS CONCERNED, THE SAM E IS AVAILABLE AT PAGE 17 OF THE PAPER BOOK AND THE SERVICES RENDERED SHOWN ARE REGISTRATION OF SHREE KRISHNA CO-OPERATIVE HSG. SOC IETY. THE BILL IS 7 DATED 8-7-2005 WHICH MEANS THE EXPENDITURE WAS INCU RRED ONLY IN THIS YEAR BECAUSE ASSESSEE CANNOT ACCOUNT FOR THE BILL U NLESS AND UNTIL THE SAME IS RECEIVED. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT[A] TO THE EXTENT THAT EXPENDITURE FOR VARIOUS EXPENSES CL AIMED BY THE ASSESSEE WHICH WERE HELD BY THE AO TO BE RELATING T O PREVIOUS YEAR, ARE NOT ALLOWABLE, EXCEPT THE ITEM OF ADVOCATES BI LL OF ` `` ` .75,900/- WHICH IS ALLOWABLE IN THIS YEAR BECAUSE THE EXPENDI TURE WAS INCURRED DURING THE YEAR ONLY. THEREFORE, THIS GROUND IS PAR TLY ALLOWED. 9. GROUND NO.2 : AFTER HEARING BOTH THE PARTIES, WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS AO NOTICED THAT ASSESSEE HAS SHOWN AGAINST LOANS AND ADVANCES IN THE BALANCE-SHEET AS ON 31-3- 2004 THE VALUE OF THE SCHOOL PLOT BEARING CST NO.102 AT ` `` ` .48,74,700/-. IT WAS FURTHER SEEN THAT VALUE OF THE SAID PLOT AS ON 31-3-2005 WA S SHOWN AT ` `` ` .29,47,929/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE DIFFERENCE. IT WAS EXPLAINED THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH SHREE SAINATH ENTERPRISES TO ACQUIRE THE PLOT WHICH WAS RESERVED FOR SCHOOL. SINCE THE PLOT WAS REQUIRED TO BE ACQUIRED ONLY IN THE NAME OF THE TRUST THE AMOUNT PAID BY THE ASSESSEE WAS TO BE ADJUSTED TO THE TRUSTEES ACCOUNT OF SHRI PRATAP VED WHO WAS THE DI RECTOR OF THE COMPANY AS WELL AS THE TRUSTEE OF NARANDAS VASANJI VED EDUCATION TRUST. AFTER VERIFYING THE DETAILS, AO OBSERVED THA T IT IS CRYSTAL CLEAR THAT ASSESSEE HAS SOLD/TRANSFERRED THE SCHOOL PLOT IN THE NAME OF SHRI PRATAP VED DIRECTOR OF THE COMPANY TO THE TUNE OF ` `` ` .19,26,771/-. HE ULTIMATELY WORKED OUT THE ADDITION AS UNDER: 8 THE PROPORTIONATE MARKET VALUE WORKS OUT IN THE FO LLOWING MANNER:- TOTAL COST AS PER BALANCE SHEET AS ON 31-3-2004 ` `` ` .48,74,700/- MARKET VALUE AS PER AGREEMENT DATED 27-2-2004 ` `` ` .88,55,000/- SALE/TRANSFER VALUE AS PER BOOKS ` `` ` .19,26,771/- THEREFORE, PROPORTIONATE MARKET VALUE IS 88,55,000 X 19,26,771 = ` `` ` .35,00,021/- 48,74,700 THUS, CONSIDERING ALL THE FACTORS NAMELY, THE DIFFE RENCE MARKET VALUE OF THE SAID SCHOOL PLOT AS WORKED OUT ABOVE A ND THE VALUE AS PER BOOKS OF ACCOUNTS WHICH IS WORKED OUT AT ` `` ` .15,73,250/- [I.E. ` `` ` .35,00,021 19,26,771]. THUS FROM THIS FACT, IT IS AMPLY CLEAR THAT ASSESSEE HAS SOLD/TRANSFER, THE PART OF PLOT AT A C ONSIDERABLE LOWER PRICE, IN SPITE OF THE FACT THAT THE PREVAILING MARKET RAT E OF THE SAID PLOT IS MUCH HIGHER, FOR THE REASONS BEST KNOWN TO HIM. THE REFORE, THIS DIFFERENCE IN THE VALUE OF THE SAID PLOT ARISES OF ` `` ` .15,73,250/-, IS BEING TREATED AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME IS BEING ADDED TO THE TOTAL INCOME. SIMULTANEOUSLY, PENALTY PROCEEDINGS U/S.271[1][C] ARE INITIATED SEPARATELY FOR CONCEALM ENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. I N ORDER TO STRENGTHEN THE ARGUMENT PLACED ABOVE, IT IS FELT SIGNIFICANT T O MENTION HERE THAT THE LD. CIT[A] HAS CONFIRMED THE ADDITION ON THE SIMILA R ISSUE OF DIFFERENCE IN MARKET VALUE AND THE SALE VALUE VIDE HIS APPELLATE ORDER BEARING NO. CIT[A]/IX/9(3)/I.T.709/2996-07 DA TED 30-9- 2007. 10. BEFORE THE CIT[A] IT WAS MAINLY SUBMITTED THAT ASSESSEE HAS PAID AN ADVANCE ON BEHALF OF THE TRUST AMOUNTING TO ` `` ` .19,26,771/- WHICH WAS SHOWN AS ADVANCE AND THE AGREEMENT WAS MA DE DIRECTLY IN THE NAME OF THE TRUST. THIS PROPERTY WAS REQUIRED T O BE PURCHASED ONLY BY A TRUST BECAUSE THE PLOT WAS RESERVED FOR SCHOOL AND COULD BE AS PER THE CONDITIONS OF THE BMC WAS PURCHASED BY THE EDUCATION TRUST. THERE WAS NO TRANSFER OF THE PROPERTY AND THE AO ON LY ASKED FOR THE COPY OF AGREEMENT DATED 27-2-2004 WHICH WAS FURNISH ED BUT NO QUESTION HAD BEEN ASKED AND AO MERELY BY MISTAKING THE CERTAIN FACTS 9 MADE THE ADDITION OF ` `` ` .15,73,250/-. THE LD. CIT[A] AFTER GOING THROUGH THE DETAILED SUBMISSIONS DELETED THE ADDITION. 11. BEFORE US, LD. DR STRONGLY RELIED ON THE ORDER OF THE AO. 12. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE REFERRED TO PAGE 24 OF THE PAPER BOOK WHICH IS A COPY OF THE SCHEDUL E SHOWING LOANS AND ADVANCES. HE POINTED OUT THAT, IN FACT, THERE A RE TWO ADVANCES SHOWN FOR THE SCHOOL PLOT, ONE IS OF ` `` ` .29,47,929/- WHICH WAS OUTSTANDING IN THE LAST YEAR AS WELL AS THIS YEAR. THE OTHER ADVANCE OF ` `` ` .19,26,771/- WHICH WAS OUTSTANDING IN THE LAST YEAR BUT THE SAME WAS NOT OUTSTANDING IN THIS YEAR. HE SUBMITTED THAT AO HAS CONFUSED THESE TWO FIGURES BECAUSE ADVANCE OF ` `` ` .29,47,929/- IS FOR A DIFFERENT PLOT. AS FAR AS THE SUM OF ` `` ` .19,26,771/- IS CONCERNED, HE AGAIN REFERRED TO PAGES 29 TO 46 OF THE PAPER BOOK, WHICH IS A COPY O F THE AGREEMENT FOR DEVELOPMENT. HE SUBMITTED THAT THIS AGREEMENT W AS SIGNED BY THE ASSESSEE ALONG WITH NARANDAS VASANJI VED EDUCATION TRUST WHICH IS CLEARLY MENTIONED AT PAGE 1 OF THE PAPER BOOK. THIS AGREEMENT WAS ENTERED ON 27-2-2004 BY WHICH THE SCHOOL PLOT WAS P URCHASED BY THE TRUST AND THE SAME WAS RESERVED FOR SCHOOL WHICH BE COMES CLEAR FROM PAGE 32 OF THE PAPER BOOK. FURTHER, CLAUSE 15(H) AL SO SHOWS THAT THE PLOT IS RESERVED FOR SCHOOL. THEN, HE REFERRED TO P AGE 45 OF THE AGREEMENT AND SUBMITTED THAT THE AGREEMENT HAS BEEN SIGNED BY THE ASSESSEE AS WELL AS ON BEHALF OF THE NARANDAS VASAN JI VED EDUCATION TRUST. HE FURTHER SUBMITTED THAT, IN FACT, SHRI PRA TAP VED WAS DIRECTOR OF THE COMPANY AS WELL AS TRUSTEE OF NARANDAS VASAN JI VED EDUCATION 10 TRUST. HE FURTHER HAD CREDIT BALANCES IN THE BOOKS OF THE ASSESSEE COMPANY AND, THEREFORE, PURCHASE OF PLOT SHOULD HAV E BEEN DEBITED TO HIS ACCOUNT BUT BY MISTAKE THE SAME WAS SHOWN AS AN ADVANCE TOWARDS THE PLOT, AND THAT IS WHY THE WHOLE CONFUSI ON HAS ARISEN. IN ANY CASE, AO DID NOT HAVE ANY SALE AGREEMENT BEFORE HIM IN CONCLUDING THAT THE ASSESSEE HAS SOLD THE SCHOOL PL OT DURING THE YEAR. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND FIND THAT APPARENTLY THE SUBMISSIONS OF THE LD. COUNSEL OF TH E ASSESSEE SEEM TO BE CORRECT. BUT IT IS NOT CLEAR WHETHER THE TRUSTEE S PURCHASED THE PLOT VIDE AGREEMENT DATED 27-2-2004 BECAUSE THE TITLE OF THE AGREEMENT STATES AGREEMENT FOR DEVELOPMENT. FURTHER, WHETHER THERE WAS ANY CREDIT BALANCE AVAILABLE IN THE ACCOUNT OF TRUSTEES OR NOT ALSO REQUIRES VERIFICATION. THEREFORE, IN THE INTERESTS OF JUSTIC E, WE SET ASIDE THE ORDER OF THE LD. CIT[A] AND REMIT THE MATTER BACK T O THE FILE OF THE AO WITH A DIRECTION TO RE-EXAMINE THE ISSUE AFTER GIVI NG ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 14. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF JANUARY, 2011. SD/- SD/- (N.V.VASUDEVAN) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 21 ST JANUARY, 2011. P/-*