ACIT, Cir.-3, Pune V. M/s. Landsquare Associates, Pune

ITA 387/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56616 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPUSTHAMA
• Assessee Lawyers: S N DOSHI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 387/PN/10 (ASSTT. YEAR: 2006-07) ASSTT. COMMISSIONER OF INCOME-TAX, .. APPELLANT CIR.3, PUNE VS. M/S LANDSQUARE ASSOCIATES, .. RESPONDENT JANARDHAN DESHPANDE BUNGLOW, 76/14/, SHANGTI SHEELA SOCIETY, LAW COLLEGE ROAD, ERANDWANE, PUNE PAN AABFL9588L APPELLANT BY: SMT ANN KAPUSTHAMA RESPONDENT BY: SHRI S N DOSHI DATE OF HEARING : 02.12.2011 DATE OF PRONOUNCEMENT : 13.12.2011 ORDER PER G.S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE DATED 14. 12.2009, WHICH IN TURN, HAS ARISEN FROM THE ORDER OF THE ASSESSING OFFICER DATED 3 1.12.2008 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SH ORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED BY THE REVENUE IN THE CAPTIONED AP PEAL IS THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED I N DELETING THE ADDITION OF RS 43,53,787/- MADE BY THE ASSESSING OFFICER TOWARDS ON MONEY RECEIPTS. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A FIRM ENGA GED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED THAT IN THE BUILDING CONTAINING SHOPS AND OFFICES AT F.C ROAD, PUNE, WHICH WERE SOLD BY THE ASSESSEE, THE RATES O F SALE VARIED FROM RS 4,116/- TO RS 8,666/- PER SQ.FT. IN RESPECT OF BOOKING O F SHOPS AND RS 383.75 TO RS 7,088/- PER SQ. FT. IN RESPECT OF BOOKING OF OFFICES. FURTHER IT WAS POINTED OUT 2 THAT FOR OFFICES, RATE FOR BOOKING WAS HIGHEST FOR CORPO RATE CLIENTS AND WAS THE LOWEST WHEN IT WAS FOR INDIVIDUALS. BEFORE THE ASSESSING O FFICER, THE ASSESSEE SUBMITTED BREAK-UP OF SHOP-WISE AND OFFICE-WISE SALES IN A STATEMENT. IT WAS EXPLAINED THAT THE UPPER GROUND FLOOR SHOPS WERE SOLD BETWEEN THE RANGE RS 7741/- TO RS 8667/- PER SQ.FT. THE RATES DEPENDED ON THE LOCATION OF THE SHOPS, WHETHER IT WAS ROAD FACING OR NOT, THE DATE OF SALE AN D ALSO VARIED FROM CUSTOMER TO CUSTOMER. IT WAS FURTHER EXPLAINED THAT ON THE UPPE R GROUND FLOOR THE BACKSIDE SHOP WAS SOLD AT RS 6500/- PER SQ.FT. SINCE IT WAS AT THE B ACKSIDE OF THE COMPLEX. SIMILAR EXPLANATION WAS GIVEN REGARDING THE RATES AT DIFFERENT FLOORS AND COPY OF THE AGREEMENT FOR SALE OF SHOPS AND OFFICE WAS SUBMITT ED BEFORE THE ASSESSING OFFICER. IN RESPECT OF ONE PARTICULAR SALE OF OFFICE TO SHRI DAMODAR SHAH, IT WAS STATED THAT HE WAS ONE OF THE EXISTING TENANTS AND AS PE R SETTLEMENT MADE, HE WAS SOLD OFFICE SPACE OF 275 SQ. FT., AT A NOMINAL RATE O F RS 384/- PER SQ.FT. VIDE AGREEMENT DATED 4.9.2004. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. ACCORDING TO THE ASSESSING OFF ICER, THE FIRST FLOOR FRON SIDE OFFICE WAS SOLD TO THREE INDIVIDUALS AT RS 4,11 6/- PER SQ. FT WHEREAS THIRD FLOOR OFFICE WAS SOLD TO CARRIER LAUNCHER IND. LTD FOR RS 7,521/- PER SQ.FT. THE ASSESSING OFFICER REFERRED TO THE ASSESSMENT ORDER PASSED BY HIM IN THE CASE OF SHRI UTKARSH PITRE FOR THE IMPUGNED ASSESSMENT YEAR WHE REIN A FINDING WAS GIVEN THAT SHRI PITRE HAD UTILISED CASH OF RS 23,71,00 0/- FOR ON MONEY PAYMENT FOR PURCHASE OF A PROPERTY FROM THE PRESENT ASSESSEE, FOR WHICH CONSIDERATION OF RS 1,10,11,000/- WAS SHOWN. ON THIS BASIS, THE ASSESSING OFFI CER PROCEEDED TO COMPUTE ON MONEY COMPONENT OF 17% ON THE TOTAL SALE P ROCEEDS BOOKED IN THE PROFIT & LOSS ACCOUNT, WHICH WAS RS 2,56,10,500/- AND THU S MADE AN ADDITION OF RS 43,53,785/- TO THE ASSESSEES TOTAL INCOME. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). 3. THE COMMISSIONER OF INCOME-TAX (APPEALS) CONSIDERED TH E DETAILED SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM. ACCORDING TO TH E COMMISSIONER OF INCOME-TAX (APPEALS), THERE WAS NO MATERIAL BROUGH T ON RECORD BY THE ASSESSING OFFICER TO INFER THAT ON MONEY PAYMENTS HAD TAKE N PLACE. MERELY BECAUSE RATES OF SALE VARIED FROM FLOOR TO FLOOR, FOR F RONT AND BACK LOCATION, OR AT DIFFERENT DATES OVER THE LONG PERIOD EXCEEDING 3 YEAR S, IT WAS NOT SUFFICIENT TO DRAW A CONCLUSION OF ON-MONEY PAYMENT. SO FAR AS THE F INDING BASED ON THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN THE CASE OF SHRI UTKARSH PITRE IS CONCERNED, THE COMMISSIONER OF INCOME-TAX (APPE ALS) OBSERVED THAT THE ADDITION OF RS 23,71,000/- MADE IN THE CASE OF SHRI U TKARSH PITRE HAS SINCE BEEN DELETED BY HIM VIDE ORDER DATED 10.12.2009 PASSED IN THE SAID CASE. THE COMMISSIONER OF INCOME-TAX (APPEALS) ALSO AGREED WITH T HE CONTENTION OF THE 3 ASSESSEE THAT IN CASE THERE WAS ANY EVIDENCE OF PAYMENT OF ON MONEY BY SHRI UTKARSH PITRE TO THE ASSESSEE, THE ASSESSING OFFICER SHOULD HAVE CONFRONTED THE ASSESSEE WITH IT AND THEN ONLY ANY SUCH ADDITION COULD HAV E BEEN MADE. IN VIEW OF THE DETAILED DISCUSSION MADE BY HIM, THE COMMISSIONER OF INCOME-TAX (APPEALS) HELD THAT THE COMPUTATION OF ON MONEY AT AN AD HOC RATE OF 17% ON THE TOTAL DISCLOSED SALES OF RS 2,56,10,500/- WAS LIABLE TO BE DELETED. HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO DELETE THE IMPUGNED AD DITION OF RS 43,53,785/- AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIV E HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER TO SUPPORT THE CASE OF TH E REVENUE THAT THE ADDITION OF RS 43,53,787/- MADE BY THE ASSESSING OFFICER TOWARDS ON-MONEY RECEIPTS WAS MAINTAINABLE. 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR RESPON DENT-ASSESSEE HAS SUBMITTED THAT NO FAULT CAN BE FOUND WITH THE ORDER O F THE COMMISSIONER OF INCOME-TAX (APPEALS) INASMUCH AS THERE WAS NO MATERIAL TO HOLD THAT THE ASSESSEE HAD RECEIVED ANY ON MONEY AMOUNT OVER AND ABOVE THE STATED CONSIDERATION FROM ITS CUSTOMERS. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN OU R CONSIDERED OPINION THE CONCLUSIONS DRAWN BY THE COMMISSIONER OF INCO ME-TAX (APPEALS) DO NOT MERIT ANY INTERFERENCE, INASMUCH AS THE COMMISSIONE R OF INCOME-TAX (APPEALS) HAS CORRECTLY HELD THAT THERE WAS NO MATERIAL WITH THE ASSESSING OFFICER TO HOLD THAT ASSESSEE HAD RECEIVED ANY ON-MONEY OVER AND ABOVE THE STATED CONSIDERATION AND THAT FOR MAKING SUCH ADDITION, THERE SHOULD BE AN EVIDENCE OF PAYMENT OF ON-MONEY WHICH HAS NOT BEEN BROUGHT ON REC ORD BY THE ASSESSING OFFICER. EVEN WITH REGARD TO THE ALLEGED RECEIPT ON MONEY FROM SHRI UTKARSH PITRE, WE ARE IN AGREEMENT WITH THE VIEW OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT IF THE ASSESSING OFFICER HAD ANY INFORMATION OR EV IDENCE REGARDING PAYMENT OF ON-MONEY OVER AND ABOVE THE STATED PAYMENT OF RS 1 ,15,92,196/-SUCH EVIDENCE SHOULD HAVE BEEN BROUGHT ON RECORD AND THE A SSESSEE SHOULD HAVE BEEN CONFRONTED WITH THE SAME. IN THE APPEAL FILED BY THE REVENUE IN THE CASE OF SHRI UTKARSH K PITRE, IN ITA NO 388/PN/10, VIDE OUR O RDER OF EVEN DATE, WE HAVE AFFIRMED THE DECISION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DELETING THE ADDITION OF RS 23,71,000/- MADE BY THE ASSESSING OFFICE R UNDER SECTION 69B ON THE GROUND OF ALLEGED ON-MONEY PAYMENT TO THE ASSESSEE IN THE PURCHASE OF PROPERTY AT F.C. ROAD, PUNE. IN THIS VIEW OF THE MAT TER, WE FIND NO ERROR IN THE 4 ACTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IN HA VING DELETED THE IMPUGNED ADDITION. RESULTANTLY, REVENUE FAILS ON THIS GROUND. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. DECISION PRONOUNCED IN THE OPEN COURT ON THE 13 TH DAY OF DECEMBER, 2011. SD/- SD/- (I C SUDHIR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE, DATED: 13 TH DECEMBER, 2011 B COPY TO:- 1) APPELLANT 2) RESPONDENT 3) THE CIT (A)-II, PUNE 4) CIT-II, PUNE 5) DR, B BENCH, ITAT, PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS, I.T.A.T., PUNE