I.T.O., Ward-1(2), Gwalior V. Shri Shashikant Chavan, Gwalior

ITA 476/AGR/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60166 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K JAIN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 476/AGRA/2010 ASSTT. YEAR : 2006-07 INCOME-TAX OFFICER, VS. SHRI SHASHIKANT CHAVAN, WARD 1(2), GWALIOR. MANIK PLAZA, JINSI NALA NO. 1, GWALIOR (PAN : AEJPC 1602 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.K. JAIN, JR. D.R. RESPONDENT BY : SHRI RAJENDRA SHARMA, ADVOCATE. DATE OF HEARING : 06.06.2012 DATE OF PRONOUNCEMENT OF ORDER : 22.06.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 07.10.2010 FOR THE ASSESSMENT YEAR 20 06-07, CHALLENGING THE DELETION OF ADDITION OF RS.14,48,880/- ON ACCOUNT O F UNDISCLOSED CAPITAL GAINS FROM SALE OF SHOP. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO M ADE THE ABOVE ADDITION ON ACCOUNT OF PROFIT EARNED FROM SALE OF SHOP WHICH HA S NOT BEEN DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT ADDITION WAS U NJUSTIFIED, WHICH IS ON ACCOUNT ITA NO.476/AGRA/2010 2 OF NET SALE OF THREE SHOPS, WHICH WERE ALREADY ENTE RED IN THE BOOKS OF BUILDER, M/S. LAXMI BUILDERS IN TERMS OF AGREEMENT EXECUTED ON 24 .11.2003 AND THE ASSESSEE HAS RECEIVED THE LAND SHARE VALUE IN THE SAME ON COMPLE TION OF THE PROJECT, WHEREAS THE ACCOUNTS OF THE CONTRACTOR FIRM, M/S. LAXMI BUILDER S, WERE ACCEPTED BY THE AO WHILE MAKING ASSESSMENT U/S. 143(3) ON 24.07.2008 A ND OTHERWISE ALSO, THE SAID ADDITION IS CONTRARY TO THE BASIS OF ACCOUNTING PRI NCIPLES AND, THEREFORE, DESERVES TO BE DELETED. IT WAS SUBMITTED THAT SALE PROCEEDS OF THE SHOPS WERE ALREADY ACCOUNTED FOR IN THE BOOKS OF BUILDER, M/S. LAXMI BUILDERS IN TERMS OF MOU, WHO HAD MADE PAYMENT TO SUB-CONTRACTORS AND TO NAGRIK SAHKARI BA NK FOR REPAYING LOAN AND INTEREST ETC. TAKEN THROUGH THE ASSESSEE. AS A MATT ER OF FACT, IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2006-07 UNDER APPEAL, T HE SMALL PROJECT WAS NOT COMPLETED AND THE ASSESSEE HAS ACCOUNTED FOR AND CO NSIDERED THE SHARE VALUE OF LAND ON PROJECT COMPLETION METHOD IN THE SUBSEQUENT YEAR. THE ACCOUNTS OF M/S. LAXMI BUILDERS, GWALIOR, IN WHICH THE SALE OF SHOPS WERE ALREADY SHOWN, HAVE BEEN ACCEPTED BY THE AO IN THE ASSESSMENT ORDER DAT ED 24.07.2008. THEREFORE, IT WOULD AMOUNT TO DOUBLE TAXATION. IT WAS, THEREFORE, SUBMITTED THAT THE ADDITION IS UNJUSTIFIED. IT WAS ALSO SUBMITTED THAT THE SALE PR OCEEDS IN THE CASE OF PUSHPA TIBREWAL HAS BEEN WRONGLY TAKEN AS HIGHER VALUE, WH O WAS THE OLD TENANT. THE LD. CIT(A) FOUND THE CONTENTION OF THE ASSESSEE TO BE A CCEPTABLE. FURTHER AS PER THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2008 -09, THE ASSESSEE HAS DECLARED LONG-TERM CAPITAL GAINS OF RS.11,98,821/- ON THE SA LE CONSIDERATION OF ITA NO.476/AGRA/2010 3 RS.1,00,50,000/- ON MANIK PLAZA WHEN THE PROJECT UN DERTAKEN AS PER MOU HAS BEEN COMPLETED. DURING THE ASSESSMENT YEAR, THE ASS ESSEE HAS RECEIVED LAND SHARE VALUE AND SALE MADE BY THE BUILDER HAS BEEN ACCEPTE D BY THE AO IN THE PROCEEDINGS U/S. 143(3) OF THE IT ACT. THE LD. CIT(A), THEREFOR E, HELD THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION AGAINST THE ASSESS EE. THE ADDITION WAS ACCORDINGLY DELETED. 3. THE LD. DR RELIED UPON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO MOU FILED IN THE PAPER BOOK A ND THE ASSESSMENT ORDER IN THE CASE OF M/S. LAXMI BUILDERS AND THE COMPUTATION OF INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09, IN WHICH THE ASSES SEE HAS DECLARED LONG-TERM CAPITAL GAINS ON COMPLETION OF THE PROJECT. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS AND PE RUSAL OF THE IMPUGNED ORDER AND DOCUMENTS ON RECORD, WE DO NOT FIND ANY MERIT I N THE DEPARTMENTAL APPEAL. THE ASSESSEE ENTERED INTO MOU / AGREEMENT WITH M/S. LAX MI BUILDERS AND DEVELOPERS FOR COMPLETION OF PROJECT BECAUSE OF THE FINANCIAL CONSTRAINTS. WHATEVER SALE WAS SHOWN BY THE BUILDER HAVE BEEN SHOWN IN THE BOOKS O F ACCOUNT, WHICH HAS BEEN ACCEPTED BY THE AO IN THE ASSESSMENT ORDER U/S. 143 (3) DATED 24.07.2008. WHEN THE ASSESSEE FOUND THAT THE PROJECT IS COMPLETE AND PAYMENTS HAVE BEEN RECEIVED ITA NO.476/AGRA/2010 4 TOWARDS THE MOU, THE ASSESSEE HAS SHOWN LONG-TERM C APITAL GAINS IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2008-09, COPIE S OF THE SAME ARE FILED IN THE PAPER BOOK TO SHOW THAT THE ASSESSEE HAS CORRECTLY SHOWN LONG-TERM CAPITAL GAINS IN THE SUBSEQUENT YEAR ON COMPLETION OF THE PROJECT. T HE LD. CIT(A) ON PROPER APPRECIATION OF FACTS AND THE MATERIAL ON RECORD AN D CONSIDERING THE STAND TAKEN BY THE REVENUE DEPARTMENT IN THE CASE OF THE BUILDER, RIGHTLY DELETED THE ADDITION IN THE CASE OF ASSESSEE FOR THE ASSESSMENT YEAR UNDER APPEAL. NO INFIRMITY HAS BEEN POINTED OUT IN THE ORDER OF THE LD. CIT(A). ACCORDI NGLY, THE DEPARTMENTAL APPEAL FAILS AND IS DISMISSED. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY