DISHA CONSTRUCTION , Mumbai V. JT. CIT RANGE-25(2), Mumbai

ITA 5538/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3011 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 26-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Retrospective amendment; Question of law; Fair market value; Capital Gains; CHAPTER IV
• Section: 43CA; 143(3); 50C; 208; 48

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) 1. ./ I.T.A. NO.5538/MUM/2019 ( / ASSESSMENT YEAR: 2014-15) DISHA CON S TRUCTION 201, SQUARE ONE GULMOHAR ROAD NO. 1 VILE PARLE(W) MUMBAI-400 049 / VS. JT. CIT - 25(2) 220, 2 ND FLOOR, KAUTILYA BHAVAN C-41 TO C-43, G BLOCK BANDRA KURLA COMPLEX BANDRA (E),MUMBAI-400 051 ! ./ ./PAN/GIR NO. AADFD-9171-G ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : WRITTEN SUBMISSIONS DATED 18/03/2021 REVENU E BY : SHRI BHARAT ANDHALE-LD. SR. DR / DATE OF HEARING : 01/06/2021 / DATE OF PRONOUNCEMENT : 17/06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR (AY) 2014-15 CONTEST THE ORDER OF LEARNED COMMISSIONER OF INCOME -TAX (APPEALS)-53, MUMBAI [CIT(A)], DATED 14/06/2019 IN THE MATTER OF ASSESSMENT FRAMED BY LD. ASSESSING OFFICER (AO) U/S 143(3) ON 20/12/2 016. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER:- 1. THE ID. CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN ADDING A SUM OF RS.618000/- U/S 43CA OF THE ACT TO THE CONSIDERATIO N RECEIVED IN RESPECT OF 2 AGREEMENTS TO SALE EXECUTED DURING THE YEAR IN RESP ECT OF REDEVELOPMENT PROJECT UNDER CONSTRUCTION. 1.I. IN DOING SO, THE ID. CIT (A) DID NOT APPRECIA TE THAT THE PRICE IN RESPECT OF THE ADDITIONAL AREA SOLD TO THE EXISTING MEMBERS OVER & ABOVE THE ENTITLED AREA WAS PRE- FIXED HAYING REGARD TO THE DEVELOPMENT AGREEMENT DT . 6.03.2011 WHICH WAS DULY REGISTERED WITH THE SUB-REGISTRAR OF ASSURANCES, MU MBAI AND THE SAID PRICE WAS MORE THAN THE READY RECKONER RATE PREVAILING ON THE DATE OF THE SAID AGREEMENT AND THE PART CONSIDERATION WHEREOF HAS BEEN RECEIVED BY MODE OTHER THAN CASH WHICH IS IN ACCORDANCE WITH SUBSECTIONS 3 & 4 OF SEC.43 CA O F THE ACT AS THEY STOOD FOR THE ASSESSMENT YEAR UNDER APPEAL. 1.II. FURTHER IN DOING SO, THE ID. CIT (A) ERRED IN HOLDING THAT THE APPELLANT HAS NOT FURNISHED ANY EVIDENCE OF THE RATE AT WHICH THE ADD ITIONAL AREA WAS SOLD AND THE DATE ON WHICH SUCH AGREEMENT WAS ENTERED INTO WHICH IS AGAINST THE MATERIAL ON RECORD. 1.III. IN ANY EVENT OF THE MATTER, AS THE STAMP DUT Y VALUE WAS NOT IN EXCESS OF 105% OF THE CONSIDERATION RECEIVED, THE ADDITION UPHELD BY THE ID. CIT(A) WAS NOT JUSTIFIED IN VIEW OF THE INSERTION OF PROVISO TO SUB SEC. 1 T O SEC. 43CA OF THE ACT BY THE FINANCE ACT, 2018 W.E.F. 1.4.19 WHICH AMENDMENT BEI NG PROCEDURAL & CURATIVE IN NATURE HAS RETROSPECTIVE EFFECT. EVEN IF THE SAID A MENDMENT IS CONSIDERED TO BE PROSPECTIVE IN NATURE, STILL NO ADDITION COULD HAVE BEEN MADE AS THE DIFFERENCE BETWEEN THE STAMP DUTY VALUE AND THE CONSIDERATION RECEIVED IS ONLY 2.75% OF THE CONSIDERATION RECEIVED WHICH IS WELL WITHIN THE 15% TOLERANCE LIMIT LAID DOWN BY THE APEX COURT IN THE CASE OF CB GAUTAM [199 ITR 530(SC )]. 1.IV. FURTHER IN ANY EVENT OF THE MATTER AND WITHOU T PREJUDICE TO THE ABOVE, THE ID. CIT(A) IN CONFIRMING THE ACTION OF THE AO DID NOT A PPRECIATE THAT THE AMOUNT WHICH IF AT ALL CAN BE ADDED TO TOTAL INCOME OF THE YEAR WOU LD ONLY BE RS. 61800/- BEING 10% OF RS. 618000/- BASED ON PROGRESSIVE DECLARATION ME THOD OF ACCOUNTING OF NET PROFIT BEFORE REMUNERATION AT 10% OF AGREEMENTS TO SALE EX ECUTED DURING THE YEAR BEING REGULARLY FOLLOWED BY THE APPELLANT WHICH METHOD OF REVENUE RECOGNITION IS ACCEPTED BY THE DEPTT. NOT ONLY IN THE PAST SCRUTINY ASSESSM ENTS BUT ALSO IN THE YEAR UNDER APPEAL. THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS IN SUPPO RT OF HIS CLAIM WHEREAS LD. DR PLEADED FOR DISMISSAL OF APPEAL. 2.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED IN CONSTRUCTION AND RE-DEVELOPMENT OF RESIDENTIAL AND COMMERCIAL PREMISES WAS ASSESSED FOR THE YEAR U/S 1 43(3) ON 20/12/2016. IT TRANSPIRED THAT THE ASSESSEE ENTERED INTO A REDEVELOPMENT AGREEMENT ON 06/03/2011 WITH MEMBERS OF DATTA RAMANAND CHS LTD FOR RE-DEVELOPING THE SOCIETY PROP ERTY UNDER CONTRACTUAL TERMS. IN TERMS OF THE AGREEMENT, IF AN Y MEMBER WAS DESIROUS OF TAKING ADDITIONAL AREA OVER AND ABOVE T HE AREA AGREED TO BE 3 ALLOTTED TO THEM IN LIEU OF EXISTING FLAT, THE SAME WOULD BE GIVEN TO THEM @RS.15000/- PER SQUARE FEET OF CARPET AREA. THE ADD ITIONAL AREA THAT COULD BE OPTED FOR BY THE MEMBERS AND RATE PER SQUA RE FEET OF THE ADDITIONAL AREA WAS FIXED IN THE REGISTERED DEVELOP MENT AGREEMENT. DURING THIS YEAR, THE ASSESSEE SOLD ADDITIONAL AREA TO 11 MEMBERS FOR AGGREGATE SALE CONSIDERATION OF RS.224.70 LACS. HOW EVER, THE STAMP DUTY VALUE OF THE SAME AGGREGATED TO RS.230.88 LACS WHICH LED LD. AO TO INVOKE THE PROVISIONS OF SEC.43CA AGAINST THE AS SESSEE TO MAKE IMPUGNED ADDITIONS OF DIFFERENTIAL AMOUNT I.E. RS.6 .18 LACS. THE DETAILS OF 11 FLATS SO SOLD DURING THE YEAR HAS BEEN ENUMER ATED IN PARA 5.1 OF THE ORDER. ALL THESE FLATS WERE SITUATED ON 5 TH FLOOR. 2.2 THE ASSESSEE SUBMITTED THAT IT HAD AGREED TO SE LL THE ADDITIONAL AREA IN THE FLATS DURING FINANCIAL YEAR 2010-11. AT THAT TIME, STAMP DUTY RECKONER VALUE WAS RS.9,700/- PER SQUARE FEET WHERE AS THE ADDITIONAL AREA WAS SOLD AT MUCH HIGHER PRICE OF RS.15000/- PE R SQUARE FEET. THE STAMP DUTY VALUATION WOULD VARY FROM YEAR TO YEAR B UT THE AGREEMENT VALUE COULD NOT BE CHANGED. THE PROVISIONS OF SEC.4 3CA AS INSERTED FROM FINANCIAL YEAR (FY) 2013-14 WOULD NOT APPLY TO SALE AGREEMENT ENTERED INTO DURING FY 2010-11. THE DETAILS OF SALE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH RESPECT TO ALL THE FLATS UNDER CONSIDERATION WAS FURNISHED WHICH HAS BEEN EXTRACTED IN PARA 5.4 OF T HE ASSESSMENT ORDER. HOWEVER, NOT CONVINCED, LD. AO ADDED THE DIFFERENCE OF RS.6.18 LACS TO THE INCOME OF THE ASSESSEE U/S 43CA. 3. DURING APPELLATE PROCEEDINGS, THE ASSESSEE REITE RATED THAT AGREEMENT VALUE WAS MUCH HIGHER THAN THE STAMP DUTY VALUE PREVAILING IN THE YEAR OF AGREEMENT. THE RATES WERE FIXED AS P ER THE DEVELOPMENT AGREEMENT AND THE SAME COULD NOT BE ENHANCED AND HI GHER PRICES COULD 4 NOT BE SOUGHT FROM THE MEMBERS. HOWEVER, LD. CIT(A) CHOSE TO CONFIRM THE ACTION OF LD. AO, INTER-ALIA, BY OBSERVING THAT THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE OF THE RATE FOR ADDITIONAL ARE A TO BE PURCHASED BY THE BUYERS AND THE DATE ON WHICH SUCH AGREEMENT WAS ENTERED IN TO NY THE ASSESSEE. FURTHER, THERE WAS NO EVIDENCE THAT A NY PAYMENT WAS MADE IN EARLIER YEARS AS PER THE RATES THEN AGREED. IN THE ABSENCE OF THESE EVIDENCES, THE CONTENTIONS OF THE ASSESSEE CO ULD NOT BE ACCEPTED AND THEREFORE, THE ACTION OF LD. AO WAS UPHELD. AGG RIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. UPON PERUSAL OF IMPUGNED ORDER, WE FIND THAT IT IS THE OBSERVATION OF LD. CIT(A) THAT THE ASSESSEE FAILED TO ADDUCE EV IDENCES IN SUPPORT OF THE PLEA THAT THE ADDITIONAL AREA WAS SOLD PURSUANT TO AGREEMENT EXECUTED IN EARLIER YEARS. THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE OF THE RATE FOR ADDITIONAL AREA TO BE PURCHASED BY THE BUYERS AND THE DATE ON WHICH SUCH AGREEMENT WAS ENTERED IN TO BY T HE ASSESSEE. FURTHER, THERE WAS NO EVIDENCE THAT ANY PAYMENT WAS MADE IN EARLIER YEARS AS PER THE RATES THEN AGREED. IN THE ABSENCE OF THESE EVIDENCES, THE CONTENTIONS OF THE ASSESSEE HAS BEEN REJECTED. 5. WE FIND THAT THE ASSESSEE, ALONG WITH ITS WRITTE N SUBMISSIONS, HAVE PLACED ON RECORD COPY OF DEVELOPMENT AGREEMENT DATE D 06/03/2011 ENTERED IN TO BY THE ASSESSEE WITH THE SOCIETY. AS PER CLAUSE-12 OF THE AGREEMENT, THE ASSESSEE HAS AGREED TO SELL ADDITION AL CARPET AREA OF 12350 SQUARE FEET TO 92 MEMBERS OF THE SOCIETY. THE ADDITIONAL AREA WAS TO BE SOLD AT RS.15000/- PER SQUARE FEET AND TH E SALE CONSIDERATION WAS TO BE PAID BY THE MEMBERS IN VARIOUS TRENCHES A S SPECIFIED IN SUB- CLAUSE (C) OF CLAUSE-12. THUS, QUITE CLEARLY THE AD DITIONAL AREA HAS BEEN SOLD BY THE ASSESSEE PURSUANT TO THE DEVELOPMENT AG REEMENT WHICH HAS 5 BEEN ENTERED INTO BY THE ASSESSEE DURING FINANCIAL YEAR 2010-11 WHICH IS PRIOR TO INTRODUCTION OF SEC.43CA. THE PROVISIONS O F SEC.43CA HAS BEEN INSERTED BY THE LEGISLATURES ONLY WITH EFFECT FROM 01 ST APRIL, 2014 AND THE SAME WOULD NOT APPLY TO ANY SUCH AGREEMENTS AS ENTE RED INTO BY THE ASSESSEE IN EARLIER YEARS AS HELD BY HONBLE BOMBAY HIGH COURT IN PR. CIT V/S SWANANDA PROPERTIES (P.) LTD. {2019 111 TAX MANN.COM 94 (BOMBAY) DATED 09/09/2019} . THE HONBLE COURT DECLINED TO ADMIT THE QUESTION OF LAW AS RAISED BY THE REVENUE WITH FOLLO WING OBSERVATIONS: - RE. QUESTION (B) 12. THE RESPONDENT- ASSESSEE IS A DEVELOPER. HE IS IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. THE FLATS SOLD BY THE RESPONDEN T- ASSESSEE ARE STOCK-IN-TRADE. THE CIT (A) BY HIS ORDER PASSED THE BEST JUDGMENT A SSESSMENT AND NOTED THAT THE SALE CONSIDERATION OF TWELVE FLATS IN THE PROJECT H AS BEEN SUPPRESSED. ACCORDING TO HIM, THE MARKET RATE NEAREST TO THAT DATE IS RS.8,9 92/- PER SQ.FT. AND, THUS, REASSESSED THE SALE OF EACH OF THE TWELVE FLATS. TH IS BASIS OF THE NEAREST MARKET RATE IS NOT FOUND IN HIS ORDER. THEREFORE, ON THIS BASIS ITSELF THE ASSESSMENT IS BAD. IN ANY CASE, MR. SHARMA, THE LEARNED COUNSEL FOR THE REVEN UE SUBMITS THAT THE MARKET RATE IS THE STAMP DUTY RATE OF REGISTRATION. THEREF ORE, THE STAMP DUTY RATE IS USED AS A MEANS TO CONSIDER PROPER SALES VALUE OF TRANSFER OF THE FLATS. AT THE RELEVANT TIME I.E. FOR THE ASSESSMENT YEAR 2005-06, THE ONLY PROV ISION FOR APPLICATION OF DEEMED VALUE FOR CONSIDERATION WAS FOUND UNDER SECTION 50C OF THE ACT RELATING TO CAPITAL ASSETS. AT THE RELEVANT TIME THERE WAS NO PROVISION IN THE ACT FOR DEEMING THE CONSIDERATION RECEIVED ON SALE OF GOODS/ASSETS OTHE R THAN CAPITAL ASSETS ON THE BASIS OF STAMP DUTY VALUATION. HOWEVER, THIS PROVIS ION IN THE FORM OF SECTION 43CA OF THE ACT HAS BEEN INTRODUCED WITH EFFECT FROM 1 A PRIL 2014. THE PRESENT CASE PERTAINS TO THE ASSESSMENT YEAR 2005-06. THEREFORE, SECTION 43CA OF THE ACT WILL HAVE NO APPLICATION FOR THE SUBJECT ASSESSMENT YEAR . 13. IN THE CASE OF CIT V. NEELKAMAL REALTORS & ERECTORS INDIA (P.) LTD. [2017] 79 TAXMANN.COM 238/246 TAXMAN 274, THE DIVISION BENCH OF THIS COURT HAD AN OCCASION TO CONSIDER THE VALUE OF THE FLAT IN CASE OF SALE BY THE DEVELOPER IN THE CONTEXT OF SECTION 50C AND SECTION 56(2)(VII)(B)(II ) OF THE ACT. THE DIVISION BENCH OBSERVED THUS: '3. REGARDING QUESTION NO. (I): ** ** ** ( F ) IT IS SELF EVIDENT FROM READING OF SECTION 50C OF THE ACT IT WOULD NOT HAVE ANY APPLICATION WHILE DETERMINING 'PROFITS AND GAIN S OF BUSINESS OR PROFESSION'. THIS IS SO AS ITS APPLICATION IS ONLY LIMITED TO COMPUTATION OF INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' AS IS EVIDENT FROM SPECIFIC REFERENCE IN SUB-SECTION (1) OF SECTION 50 OF THE A CT TO SECTION 48 OF THE ACT I.E. MODE OF COMPUTATION OF CAPITAL GAINS. IN FACT SECTION 50C OF THE ACT AS OBSERVED BY THE IMPUGNED ORDER IS PLACED AS PART OF THE CHAPTER IV-E UNDER 6 THE HEAD 'CAPITAL GAINS', IT CAN ONLY GOVERN THE VA LUATION OF THE PROPERTY TO DETERMINE CAPITAL GAINS AND CANNOT GOVERN VALUATION OF TRANSFER OF ASSETS (OTHER THAN A CAPITAL ASSET) I.E. STOCK IN TRADE. T HIS VIEW IS FURTHER STRENGTHENED BY THE FACT THAT SECTION 43CA HAS BEEN INTRODUCED INTO THE ACT W.E.F. 1ST APRIL, 2014 WHICH GOVERNS TAKING OF FULL VALUE OF CONSIDERATION FOR TRANSFER OF ASSETS OTHER THAN CAPITAL ASSETS ON THE BASIS OF STAMP DUTY VALUATION. THIS SECTION 43CA OF THE ACT FINDS A PLA CE AS A PART OF CHAPTER IV- D - PROFITS AND GAINS OF BUSINESS OR PROFESSION. TH EREFORE, WITH EFFECT FROM 1ST APRIL 2014 THE STAMP DUTY VALUATION OF ASSETS SOLD COULD BE TAKEN AS VALUE OF CONSIDERATION. OUR ABOVE VIEW THAT SECTION 50C OF T HE ACT HAS NO APPLICATION TO VALUE STOCK IN TRADE IS ALSO A VIEW TAKEN BY ALL AHABAD HIGH COURT IN COMMISSIONER OF INCOME TAX V. KEN CONSTRUCTION AND COLONIZERS (P.) LTD. (2012) 208 TAXMAN 478/20 TAXMAN.COM 381. SIMILARLY THE MADRAS HIGH COURT IN CIT V. THIRUVENGADAM INVESTMENTS (P.) LTD. (2010) 320 ITR 345 HAS ALSO HELD THAT SECTION 50C OF THE ACT CANNOT BE INV OKED TO ARRIVE AT FULL CONSIDERATION OF SALE OF BUSINESS ASSET. WE SEE NO REASON NOT TO ADOPT THE VIEWS OF THE ABOVE TWO HIGH COURTS TO THE PRESENT F ACTS.' (EMPHASIS SUPPLIED) THEREFORE, SECTION 43CA CANNOT BE MADE APPLICABLE T O THE FACTS OF THE PRESENT CASE. BY THE PLAIN LANGUAGE OF THIS PROVISION IT IS NOT R ETROSPECTIVE. THUS, THERE IS NO STATUTORY PROVISION BASED ON WHICH THE STAMP DUTY V ALUATION COULD HAVE BEEN MADE A BASIS IN THE PRESENT CASE. 14. THE DIVISION BENCH OF THIS COURT IN THE CASE OF ZAIN CONSTRUCTIONS V. ITO [2019] 107 TAXMANN.COM 300/265 TAXMAN 82 (MAG.) HAS CONCLUSIVELY DECIDED THE ISSUE AS UNDER: '8. IN OUR OPINION, THE ENTIRE APPROACH OF THE ASSE SSING OFFICER IS WHOLLY INCORRECT. AS IS WELL KNOWN, SECTION 50C OF THE ACT WOULD ENAB LE THE REVENUE TO BRING TO TAX BY WAY OF DEEMED CAPITAL GAIN DIFFERENCE BETWEEN TH E STAMP VALUATION AND THE SALE PRICE OF A CAPITAL ASSET. FOR OBVIOUS REASONS, THIS PROVISION WOULD NOT APPLY IN CASE OF A BUILDER FOR WHOM SUCH IMMOVABLE PROPER TY IS IN NATURE OF STOCK IN TRADE AND NOT CAPITAL ASSET. TO OVERCOME THIS DIFFI CULTY THE LEGISLATURE HAD INSERTED SECTION 43CA UNDER FINANCE ACT, 2013 W.E.F 1.4.2014 . THIS PROVISION WOULD ENABLE THE REVENUE TO TAX THE INCOME ARISING OUT OF SALE OF STOCK BY A DEEMING FICTION WHERE SUBJECT TO CERTAIN CONDITIONS, STAMP VALUATION OF SUCH STOCK WOULD SUBSTITUTE THE ACTUAL RECEIPT THEREOF. IN ABSENCE O F ANY SUCH STATUTORY PROVISIONS, GIVING RISE TO THE DEEMING FICTION, THE REVENUE CAN NOT TAX ANY AMOUNT WHICH HAS NOT BEEN RECEIVED BY A SELLER OF AN IMMOVABLE PROPE RTY AT THE TIME OF SALE.' (EMPHASIS SUPPLIED) NO CONTRARY DECISION IS SHOWN. 15. AS REGARDS THE DECISION IN THE CASE OF ASSOCIATED BUILDERS RELIED UPON BY THE APPELLANT- REVENUE, IT AROSE IN THE CONTEXT OF VALU ATION OF ASSETS INCLUDING STOCK IN TRADE ON DISSOLUTION OF A PARTNERSHIP FIRM. THIS CO URT WAS CONCERNED WITH THE ISSUE WHETHER, WHEN THE ASSET WAS VALUED ON THE BASIS OF BOOK VALUE AS PROVIDED IN THE CONTRACT BETWEEN THE PARTIES, IS IT OPEN TO THE ASS ESSING OFFICER TO IGNORE IT AND ASCERTAIN WHETHER THE VALUATION DONE DOES REPRESENT THE FAIR VALUE OF THE ASSET. THIS THE COURT ANSWERED IN THE AFFIRMATIVE BY HOLDING TH AT THE CONTRACT BETWEEN THE PARTIES WILL NOT BIND THE REVENUE, WHILE DETERMININ G THE FAIR MARKET VALUE OF THE ASSETS OF THE PARTNERSHIP FIRM. IN THE PRESENT CASE , WE ARE NOT DEALING WITH THE VALUATION OF ASSETS ON DISSOLUTION OF A FIRM. IN CA SE OF DISSOLUTION, THERE IS NO SALE AS IN THE CASE OF RUNNING BUSINESS. THUS, THE DECISION IN THE CASE OF ASSOCIATED 7 BUILDERS IS IN DIFFERENT FACTS AND CIRCUMSTANCES AN D WOULD HAVE NO APPLICATION TO THE PRESENT FACTS. 16. IT IS TO BE NOTED THAT THE REVENUE HAS NOT MADE A NY REFERENCE EVEN REMOTELY THAT THE RESPONDENT HAD RECEIVED AMOUNTS IN EXCESS OF THAT SHOWN IN THE AGREEMENTS IN RESPECT OF TWELVE FLATS WHICH IS NOT BEING ACCEPTED. THE ENTIRE CASE OF THE REVENUE IS MERELY ON SUSPICION. IT IS NOT THE C ASE OF THE REVENUE THAT THE RESPONDENT MADE SECRET PROFITS OUT OF SALE OF THE T WELVE FLATS. 17. THE SUPREME COURT HAS OBSERVED IN THE CASE OF CIT V. A. RAMAN & CO. [1968] 67 ITR 11 THAT THE LAW DOES NOT OBLIGE A TRA DER TO MAKE MAXIMUM PROFIT, HE CAN MAKE, OUT OF HIS TRADING ACTIVITY. INCOME ON WH ICH HE CAN BE TAXED IS ONLY THE INCOME HE HAS EARNED. SO ALSO RECENTLY, THE SUPREME COURT IN THE CASE OF S.A. BUILDERS V. CIT [2007] 158 TAXMAN 74/288 ITR 1 HAS OBSERVED THAT NO BUSINESSMAN CAN BE COMPELLED TO MAXIMIZE HIS PROFITS. THEREFORE , IN VIEW OF THE ABOVE, THIS QUESTION AS PROPOSED ALSO DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS NOT ENTERTAINED. 18. THE APPEAL IS DISMISSED. THE HONBLE COURT HAS HELD THAT THE PROVISIONS OF S EC.43CA WOULD NOT HAVE RETROSPECTIVE APPLICATION AND ACCORDINGLY, DO NOT APPLY TO AGREEMENT EXECUTED PRIOR TO ITS INTRODUCTION. THE R ATIO OF THIS DECISION IS SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. TH EREFORE, THE IMPUGNED ADDITIONS COULD NOT BE SUSTAINED IN THE EY ES OF LAW ON THIS POINT ALONE. WE ORDER SO. CONSEQUENTLY, THE OTHER A RGUMENTS MADE BY THE ASSESSEE HAS BECOME MERELY ACADEMIC IN NATURE. 6. THE APPEAL STAND PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 17 TH JUNE, 2021 SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 17/06/2021 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. -.$'/ , / , / DR, ITAT, MUMBAI 6. .012 / GUARD FILE 8 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.