DCIT, Jaipur V. M/S GOVERDHAN BUILDERS PVT. LTD., Jaipur

ITA 454/JPR/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2185 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 11-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VARINDAR MEHTA
• Keywords: Capital asset; Cost of acquisition; Date of conversion; Fair market value
• Section: 45(2)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SH. KUL BHARAT, JM & SH. VIKRAM SINGH YADAV , AM VK;DJ VIHY LA- @ ITA NO. 454/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2007-08 THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2, JAIPUR CUKE VS. M/S GOVERDHAN BUILDERS PVT. LTD 232, HIMMAT NAGAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCG 4950 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 455/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2008-09 THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2, JAIPUR CUKE VS. M/S GOVERDHAN BUILDERS PVT. LTD 232, HIMMAT NAGAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCG 4950 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VARINDAR MEHTA (CIT) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/03/2017 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 10/04/2017 ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 2 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M.: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A) CENTRAL, JAIPUR OF EVEN DATE 29/02/2012 FOR A.Y. 2007-08 & 2008-09 RESPECTIVELY. SINCE COMMON I SSUES ARE INVOLVED, BOTH THE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER. THE GROUNDS OF APPEAL TAKEN BY THE R EVENUE ARE AS UNDER:- ITA NO. 454/JP/2012:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE CIT(A) CENTRAL, JAIPUR HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS. 14,55,022/- MADE BY THE AO ON ACCOU NT OF CAPITAL GAIN FOR CONVERSION OF CAPITAL ASSET IN STOCK IN TR ADE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS. 15,00,906/- OUT OF TOTAL ADDITION OF RS. 17, 00,906/- MADE BY THE AO ON ACCOUNT OF TRADING PROFIT. ITA NO. 455/JP/2012:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 23,06,308/- MADE BY THE AO ON ACCOU NT OF CAPITAL GAIN FOR CONVERSION OF CAPITAL ASSET IN STOCK IN TR ADE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS. 30,26,822/- OUT OF TOTAL ADDITION OF RS. 33, 26,822/- MADE BY THE AO ON ACCOUNT OF TRADING PROFIT. ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 3 2. IN THE FIRST GROUND OF APPEAL FOR A.Y 2007-08, T HE REVENUE HAS CHALLENGED THE ACTION OF LD.CIT(A) IN DELETING THE ADDITION OF RS. 14,55,022/- MADE BY THE AO ON ACCOUNT OF CAPITAL GA IN FOR CONVERSION OF CAPITAL ASSET INTO STOCK ENTRY . 2.1. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE ACQUIRED A PIECE OF LAND AT MAUJI COLONY, MALVIYA NAGAR, JAIPUR IN T HE FINANCIAL YEAR 1995-96 AND THEREAFTER, ENTERED INTO A DEVELOPMENT AGREEMENT ON 08.01.2005 WITH A DEVELOPER COMPANY NAMED AS M/S FI NETECH DEVELOPER PRIVATE LIMITED, JAIPUR. AS PER THE ASSES SING OFFICER, THE LAND WAS SHOWN AS CAPITAL ASSET IN THE BALANCE-SHEET AS ON 31 ST MARCH, 2005 AND THE LAND HAS BEEN CONVERTED INTO STOCK-IN-TRADE IN THE SUBSEQUENT FINANCIAL YEAR AS APPARENT FROM THE BALANCE SHEET A S ON 31 ST MARCH 2006. THE AO ACCORDINGLY, APPLIED THE DLC RATE OF RS. 13,000/- TO CALCULATE THE FAIR MARKET VALUE FOR THE PURPOSE OF COMPUTING CAPITAL GAINS IN TERMS OF SECTION 45(2) OF THE ACT. ACCORD ING TO THE ASSESSEE, THE CONVERSION OF CAPITAL ASSET INTO STOCK-IN-TRADE WAS RATIFIED BY BOARD OF DIRECTORS IN ITS MEETING HELD ON 09.04.2005 WHER EIN, THE FOLLOWING BOARD RESOLUTION WAS PASSED: RESOLVED THAT IN ACCORDANCE TO PROVISIONS OF DEVEL OPMENT AGREEMENT MADE WITH M/S FINETECH REAL ESTATE DEVELO PEERS PVT. LTD ON 08-01-2005, THE CONVERSION OF THE LAND AT PLOT N O. E-21, MAUJI COLONY, MALVIYA NAGAR, JAIPUR, FOR WHICH THE ABOVE SAID AGREEMENT ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 4 MADE, INTO STOCK-IN-TRADE IS AND BE HEREBY CONFIRME D AS THE DEVELOPER HAS SUBMITTED THE DRAWINGS FOR CONSTRUCTION TO CONC ERN AUTHORITIES. THE ASSESSEE FURTHER SUBMITTED THAT SUBSEQUENTLY, T HE ACCOUNTING ENTRY WAS PASSED IN THE BOOKS OF ACCOUNTS ON 10.4.2005. ACCORDINGLY, THE DATE OF 10.04.2005 WAS TAKEN AS DATE OF CONVERSION OF THE CAPITAL ASSETS INTO STOCK ENTRY BY THE ASSESSEE. 2.2 THE LD. CIT(A) OBSERVED THAT THE STAND TAKEN BY THE ASSESSING OFFICER WAS NOT CORRECT AND THE FMV OF THE ASSET FO R THE PURPOSES OF SECTION 45(2) IS TO BE TAKEN ON THE DATE OF CONVERS ION OF CAPITAL ASSET INTO STOCK-IN-TRADE AND NOT AS ON THE BALANCE-SHEET DATE WHICH HAS BEEN TAKEN BY THE ASSESSING OFFICER AND THEREAFTER HAS GIVEN HIS FINDING AT PARA 2.5.1 OF ITS ORDER WHICH REPRODUCED AS UNDE R:- THE MOOT ISSUE TO BE DECIDED IS WHETHER THE LAND W AS CONVERTED FROM FIXED ASSET INTO STOCK-IN-TRADE AS ON 31.3.200 6. THE AR HAS RIGHTLY ARGUED THAT THE BALANCE SHEET DATE ONLY REFLECTS TH E POSITION AS ON THE END OF THE FINANCIAL YEAR AND IT DOES NOT MEAN THAT THE LAND HAS BEEN CONVERTED INTO STOCK-IN-TRADE ON 31.3.2006 ONLY. T HIS IS MISCONCEIVED APPROACH OF THE AO. ACCORDINGLY, AOS ACTION OF TA KING THE FMV OF THE LAND AS PER DLC RATE AS ON 31.3.2006 I.E. @ RS. 13, 000/- PER SQ.MT. IS UNJUSTIFIED AND CANNOT BE UPHELD AND THEREFORE THE ADDITION SO MADE BY THE A.O NEEDS TO BE DELETED. IT WAS SUBMITTED THAT THE LAND WAS CONVERTED INTO STOCK-IN-TRADE ON 10.4.2005 IMMEDIAT ELY AFTER THE BOARDS RESOLUTION TO THAT EFFECT WAS PASSED BY THE BOARD OF DIRECTORS OF THE APPELLANT COMPANY ON 9.4.2005. FIRSTLY IT IS S EEN THAT THE APPELLANT COMPANY HAS ENTERED INTO DEVELOPMENT AGREEMENT DATE D 8.1.2005 WITH M/S FINETECH DEVELOPERS PVT LTD TO CONSTRUCT RESIDE NTIAL AND/COMMERCIAL APARTMENTS, FOR WHICH APPELLANT IS ENTITLED TO 18% OF THE SALE PROCEEDS, REMAINING 82% BEING OF DEVELOPER. AS THE BOARDS R ESOLUTION TO THAT EFFECT WAS NOT PASSED BY 31.3.2005 AND REALIZING TH E SAME, IMMEDIATELY LATERON ON 9.4.2005, THE BOARDS RESOLUTION WAS PAS SED. ACCORDINGLY, THE LAND HAS TO BE SHOWN AS FIXED ASSETS AS ON 31.3 .2005. CONSIDERING THESE FACTS AND CIRCUMSTANCES, AND THERE BEING NO C ONTRARY EVIDENCE BROUGHT OUT ON RECORD BY THE AO., THE DATE OF CONVE RSION OF LAND INTO STOCK IN-TRADE IS TO BE TAKEN AS 10.4.2005 CONSIDER ING THE BOARDS RESOLUTION DATED 9.4.2005, AS SHOWN BY THE APPELLAN T. ACCORDINGLY, FMV ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 5 HAS TO BE DETERMINED AS ON 10.4.2005 FOR THE PURPOS E OF SECTION 45(2). THE DLC RATE ON 10.4.2005 WAS RS. 9,000/- PER SQ.MT , WHEREAS THE APPELLANT HAS TAKEN THE FMV @ RS. 9,200/- PER SQ.MT , WHICH IS SLIGHTLY MORE THAN THE DLC RATE. THEREFORE, THERE IS NO JUS TIFICATION TO DISTURB THE FMV OF THE LAND SO SHOWN BY THE APPELLANT. HEN CE, THE ADDITION ON ACCOUNT OF CAPITAL GAIN BY TAKING THE FMV AS ON 31. 3.2006 BY THE AO IS HEREBY DELETED IN BOTH THE YEARS UNDER APPEAL. 2.3. IT IS NOT IN DISPUTE THAT THE CAPITAL ASSET HA S BEEN CONVERTED INTO STOCK-IN-TRADE BY THE ASSESSEE. THE LIMITED ISSUE UNDER DISPUTE RELATES TO THE DATE OF ACTUAL CONVERSION OF CAPITAL ASSET I NTO STOCK-IN-TRADE. THE BALANCE SHEET DATE REFLECTS THE POSITION AS ON THE YEAR-END AND THE SAID DATE CANNOT BE TAKEN AS DATE OF CONVERSION UNLESS T HE CONVERSION OR TREATMENT OF THE CAPITAL ASSET INTO STOCK-IN-TRADE HAS HAPPENED ON THE SAID DATE. THE UNDISPUTED FACTS ARE THAT CONVERSIO N OR TREATMENT OF THE CAPITAL ASSET INTO STOCK-IN-TRADE HAS NOT HAPPENED ON 31.03.2006. THE LD. CIT(A) AFTER INTO CONSIDERATION THE SIGNING OF THE DEVELOPMENT AGREEMENT ON 8.01.2005, BOARD RESOLUTION DATED 9.4. 2005 AND ACCOUNTING ENTRY PASSED BY THE ASSESSEE IN ITS BOOK S OF ACCOUNT ON 10.04.2005 HAS RIGHTLY HELD THAT THE DATE OF CONVER SION OF CAPITAL ASSET INTO STOCK-IN-TRADE SHOULD BE TAKEN AS 10.4.2005. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A ) WHICH IS HEREBY CONFIRMED. ACCORDINGLY, GROUND NO. 1 OF THE REVEN UES APPEAL IS DISMISSED. 3. NOW COMING TO GROUND NO. 2 TAKEN BY THE REVENUE WHEREIN IT HAS CHALLENGED THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 15,00,906/- OUT OF TOTAL ADDITION OF RS. 17,00,906/ - MADE BY THE AO ON ACCOUNT OF TRADING/BUSINESS PROFIT. 3.1. THE ASSESSING OFFICER HAS ALLOWED ONLY 18 % ON THE LAND COST IN THE HANDS OF THE ASSESSEE WHILE CALCULATING THE BUS INESS PROFIT. FURTHER, ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 6 THE ASSESSING OFFICER HAS HELD THAT THE FLATS IN TH E PROJECT HAS BEEN SOLD AT A RATE MUCH LOWER THAN EVEN THE DLC RATE. FURTH ER, THE ASSESSING OFFICER HAS CHALLENGED THE PROFIT SHARING RATIO OF 18:82 AS HAS BEEN WORKED OUT BETWEEN THE ASSESSEE AND THE DEVELOPER I N TERMS OF THE DEVELOPMENT AGREEMENT FOR SHARING THE SALE PROCEEDS OUT OF SALE OF FLATS. 3.2. IN THIS REGARD, THE RELEVANT FINDING LD. CIT(A ) ARE CONTAINED AT PARA 3.4 OF ITS ORDER WHICH IS REPRODUCED AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF LD. AR AND HAV E PERUSED THE MATERIAL ON RECORD. NORMALLY ANY DEVELOPER AGREEME NT BETWEEN THE LAND OWNER AND THE DEVELOPER ENVISAGES CONTRIBUTION OF THE LAND BY THE LAND OWNER LIKE THAT OF APPELLANT AND ALL THE EXPEN SES ON DEVELOPING THE LAND, GETTING THE MAPS ETC APPROVED, GETTING THE PL ANNING DONE AND ON CONSTRUCTION AS WELL AS MARKETING, SELLING ETC IS B ORNE BY DEVELOPER THEN IN BETWEEN THEM THE SALE PROCEEDS RATIO OR PRO FIT SHARING RATIO IS DECIDED CONSIDERING THE VARIOUS FACTORS LIKE COST O F LAND, COST OF CONSTRUCTION, OTHER MISC. COSTS, SELLING PRICE ETC. THIS SHARING RATIO MAY VARY ACCORDING TO FACTS OF THE CASE. THUS THE LAND OWNER GETS ITS SHARE OF THE SALE PROCEEDS AGAINST ITS CONTRIBUTION OF LA ND AND DEVELOPER GETS ITS SHARE OF THE SALE PROCEEDS AGAINST VARIOUS CONS TRUCTION AND OTHER EXPENSES. THUS, AS FAR AS COST OF LAND IS CONCERNE D, IT IS RELATABLE TO/BORNE BY THE LAND OWNER AND CONSTRUCTIONS EXPENS ES ARE CONCERNED, IT IS BORNE BY DEVELOPER. NOWHERE IT IS ENVISAGED THAT THE PROPORTION IN WHICH IN SALE PROCEEDS ARE TO BE DIVIDED, THE LAND COST IS ALSO TO BE DIVIDED IN THE SAME PROPORTION. ACCORDINGLY, ACTIO N OF THE A.O IS TOTALLY UNJUSTIFIED AND AGAINST THE LANGUAGE AS WELL AS THE SPIRIT OF THE DEVELOPMENT AGREEMENT. BUSINESS PROFIT FOR THE APP ELLANT LAND OWNER CANNOT BE WORKED OUT BY JUST ALLOWING 18% OF THE LA ND COST AS ITS EXPENSES. THEREFORE, THE BASIS OF ADDITION MADE BY THE A.O ITSELF BEING TOTALLY AGAINST NOT ONLY THE DEVELOPER AGREEMENT BU T ALSO AGAINST THE ACCOUNTING PRACTICES AND FURTHER AGAINST GENERALLY ACCEPTED PRACTICES, THE ADDITION MADE BY THE A.O CANNOT BE SUSTAINED. HOWEVER, CONSIDERING THE DEFECTS POINTED OUT BY THE A.O THAT THE SALE RATE SHOWN IS QUITE LESS THAN THE DLC RATE AND MOREOVER ALSO T HE DEFECT THAT THE SHARING RATIO OF THE APPELLANT COMPANY IS VERY LOW WHICH IS ALSO NOT VERY JUSTIFIABLE AND CONSIDERING THE APPLICATION OF DECI SION OF HONBLE ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 7 SUPREME COURT IN THE MCDOWELL & CO. LTD VS. CTO LTD 154 ITR 148 AND VARIOUS OTHER DECISIONS CITED BY THE A.O, IT WILL B E APPROPRIATE TO ESTIMATE THE BUSINESS PROFIT OF THE APPELLANT AFTER REJECTING BOOK RESULTS AT RS. 2 LAKH FOR A.Y 2007-08 AND RS. 3 LAKH FOR A. Y 2008-09 AGAINST THE BUSINESS LOSS OF RS. 13,24,168/- AND RS. 15,90,568/ - SHOWN BY THE APPELLANT. 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUE D THE MATERIAL AVAILABLE ON RECORD. IN TERMS OF SECTION 45(2) OF THE ACT, FAIR MARKET VALUE OF THE ASSET CONVERTED INTO STOCK-IN-TRADE IS DEEMED AS FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF DETERMINING TH E CAPITAL GAINS AND THE CAPITAL GAINS ARE COMPUTED AFTER TAKING INTO CO NSIDERATION THE COST OF ACQUISITION OF SUCH ASSETS IN THE HANDS OF THE A SSESSEE. THE NEXT TRANSACTION THAT WILL ARISE IS SALE OF SUCH STOCK-I N-TRADE. THE QUESTION THAT ARISES FOR CONSIDERATION IS HOW WOULD THE PROF IT BE COMPUTED AT A TIME OF SALE OF SUCH STOCK-IN-TRADE. 3.4 IN THIS REGARD, THE LD. CIT(A) HAS HELD THAT IT IS NOT CORRECT TO HOLD THAT THE PROPORTION IN WHICH THE SALE PROCEEDS ARE TO BE DIVIDED BETWEEN THE ASSESSEE AND THE DEVELOPER SHOULD BE CO NSIDERED AND THE LAND COST TO BE DIVIDED IN THE SAME PROPORTION. AC CORDINGLY, THE ACTION OF THE AO WAS HELD NOT JUSTIFIED BY THE LD CIT(A) A ND IT WAS HELD THAT THE BUSINESS PROFIT FOR THE APPELLANT CANNOT BE COM PUTED BY JUST ALLOWING 18% OF THE LAND COST AS ITS EXPENSES. WE AGREE WITH THE SAID FINDINGS OF THE LD. CIT(A) THAT THE PROFIT SHARING RATIO OF THE SALE ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 8 PROCEEDS SHOULD NOT BE A BASIS TO LIMIT THE PROPORT ION OF LAND COST IN THE HANDS OF THE ASSESSEE. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS CONTRIBUTED WHOLE OF ITS LAND WHICH HAS SUBSEQUENTL Y BEEN DEVELOPED BY DEVELOPER WHO IS RESPONSIBLE FOR THE CONSTRUCTIO N AND DEVELOPMENT OF THE PROJECT INCLUDING SALES THEREOF. THE PROFIT S THAT HAS TO BE COMPUTED IN THE HANDS OF THE ASSESSEE SHOULD THEREF ORE TAKE INTO CONSIDERATION THE WHOLE OF LAND COST IN HANDS OF TH E ASSESSEE. 3.5 NOW COMING TO THE SECOND ISSUE REGARDING SUBSTI TUTION OF THE LAND COST BY FAIR MARKET VALUE OF SUCH LAND COST AS ON THE DATE OF CONVERSION FOR THE PURPOSES OF COMPUTING THE BUSINE SS PROFITS. IN THIS REGARD, THE HONBLE SUPREME COURT IN CASE CIT VS. B AI SHIRINBAI K. KOOKA [1962] 46 ITR 86 HAS HELD THAT THE ASSESSABLE PROFIT AS BUSINESS PROFIT WOULD BE THE DIFFERENCE BETWEEN THE SALE PRI CE OF STOCK-IN-TRADE AND FAIR MARKET VALUE SO CONVERTED/TREATED IN/AS ST OCK-IN-TRADE PREVAILING ON THE DATE WHEN SUCH CONVERSION TAKES P LACE. IN INSTANT CASE, WE FIND THAT THE AO WHILE COMPUTING THE BUSIN ESS PROFITS HAS NOT CONSIDERED SUCH FAIR MARKET VALUE ON THE DATE OF CO NVERSION AND FURTHER, HAS ALLOWED ONLY 18% OF THE COST OF THE LA ND (CONSIDERED WHILE COMPUTING THE CAPITAL GAINS U/S 45(2)) IN COMPUTING THE BUSINESS PROFIT OF THE ASSESSEE COMPANY. REGARDING SUBSTITUTION OF SUCH ACTUAL LAND COST IN HIS HANDS OF THE ASSESSEE BY THE FULL VALUE OF CONSIDERATION AS ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 9 CONTEMPLATED U/S 45(2) OF THE ACT, THERE IS NO FIND ING GIVEN BY THE LD. CIT(A) IN THIS REGARD AND WE ARE UNABLE TO COMMENT ON THE SAME. THE ISSUE THEREFORE NEEDS TO BE SET ASIDE TO THE FILE OF THE LD.CIT(A) TO DECIDE THE SAME AFRESH TAKING INTO CONSIDERATION TH E DECISION OF THE HONBLE SUPREME COURT IN CASE OF BAI SHIRINBAI K. K OOKA. 3.6. FURTHER, FROM PERUSAL OF THE RECORDS, IT IS UN CLEAR HOW THE SALE PROCEEDS HAVE BEEN DETERMINED BY THE ASSESSEE AND W HAT WAS THE CORRESPONDING DLC RATE PREVAILING AT THAT POINT OF TIME AND THE REASONS FOR THE VARIANCE. IT IS ALSO UNCLEAR HOW THE PROFIT SHARING RATIO OF 18:82 HAS BEEN DETERMINED BETWEEN THE ASSESSEE AND THE DE VELOPER IN TERMS OF THE DEVELOPMENT AGREEMENT EXECUTED ON 8.1.2005. FURTHER, IT IS UNCLEAR HOW THE LD. CIT(A) WHILE UPHOLDING THE OBSE RVATIONS OF THE AO REGARDING THE SALES REALIZATION AND PROFIT SHARING RATIO HAS ESTIMATED THE BUSINESS PROFIT AT RS. 2 LACS FOR AY 2007-08. IN O UR VIEW, THE MATTER REQUIRES A FRESH EXAMINATION AND WE DEEM IT FIT TO RESTORE IT BACK TO THE FILE OF THE LD. CIT(A) TO EXAMINE THE SAME AFRESH T AKING INTO CONSIDERATION THE ABOVE DISCUSSIONS. IN THE RESULT , GROUND NO. 2 OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, APPEAL OF THE REVENUE IS PARTY ALLO WED FOR STATISTICAL PURPOSES. ITA NO. 454 & 455/JP/2012 THE DEPU TY COMMISSIONER OF INCOME-TAX VS M/S GOVERDHAN BUILDERS PVT. LTD 10 ITA NO. 455/JP/2012 4. BOTH THE GROUNDS OF APPEAL ARE PARI-MATERIA TO T HE GROUNDS OF APPEAL AND THE FACTS OF THE CASE IN ITA NO. 454/JP/ 2012. THE FINDING AND DIRECTION CONTAINED IN ITA NO. 455/JP/2012 SHAL L APPLY MUTATIS MUTANDIS TO THIS APPEAL. THUS THE APPEAL OF REVENUE IN ITA NO. 455/JP/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPO SES. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10/04/201 7. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 10/04 /2017 *GANESH VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DEPUTY COMMISSIONER OF INCOME-TAX 2. IZR;FKHZ@ THE RESPONDENT- M/S GOVERDHAN BUILDERS PVT. LTD 3. VK;DJ VK;QDR@ CIT TDS, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-III, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.454 & 455 /JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR