ACIT 18(2), MUMBAI V. VIJAYRAJ PROPERTIES, MUMBAI

ITA 6529/MUM/2012

• Counselvise Citation: 652919914 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDAR KAUR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE HONBLE S/SHRI D. MANMOHAN , VICE-PRESIDENT AND B.R.BASKARAN (AM) , . , . . , ! ./I.T.A. NO.6529/MUM/2012 ( '#$ % / ASSESSMENT YEAR : 2009-10) ASSTT. COMMISSIONER OF INCOME TAX- 18(2), ROOM NO.115, 1ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012 / VS. M/S VIJAYRAJ PROPERTIES, 102 ADITI, SHIVSENA BHAVAN PATH, DADAR, WEST, MUMBAI-400028. ( !&' / APPELLANT) .. ( ()&' / RESPONDENT) & ./ *+ ./PAN/GIR NO. : AADFV0536F !&' , / APPELLANT BY : SHRI PARMINDAR KAUR ()&' - , /RESPONDENT BY : SHRI K SHIVRAM (SR.ADV ) AND MS.NEELAM JADHAV . / - 01 / DATE OF HEARING : 24.7.2014 2 %$ - 01 /DATE OF PRONOUNCEMENT : 31.7.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 16.08.2012 PASSED BY LD CIT(A)-29, MUMBAI AND IT RE LATES TO THE ASSESSMENT YEAR 2009-10. 2. THE SOLITARY ISSUE URGED BY REVENUE IS WHETHER T HE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ASSESSMENT OF PROFIT OF RS.36,81,701/- COMPUTED BY AO AS THE GAIN ARISING ON SALE OF A FLAT. 3. THE FACTS RELATING THERETO ARE STATED IN BRI EF. THE ASSESSEE IS ENGAGED IN PROPERTY DEVELOPMENT BUSINESS. THE AO NOTICED THAT THE ASSESSEE HAD 3 UNSOLD I.T.A. NO.6529/MUM/2012 2 FLATS AT THE YEAR END. THE AO NOTICED THAT THE ASS ESSEE HAD ENTERED INTO AN AGREEMENT ON 27.04.2008 FOR SALE OF A FLAT NUMBERED AS 503 FOR A CONSIDERATION OF RS.90.00 LAKHS AND HAS RECEIVED A SUM OF RS.51.0 0 LAKHS BY 31.3.2009. HE FURTHER NOTICED THAT THE ASSESSEE HAD SHOWN THE SAM E AS UNSOLD FLAT. HENCE, THE AO TOOK THE VIEW THAT THE ASSESSEE CANNOT TREAT THE SAME AS UNSOLD FLAT AND ACCORDINGLY TOOK THE VIEW THAT THE PROFIT ARISING O N SALE OF THE ABOVE SAID FLAT IS ASSESSABLE IN THE CURRENT ASSESSMENT YEAR. BEFORE THE AO, THE ASSESSEE SUBMITTED THAT THE AGREEMENT WAS ACTUALLY ENTERED O N 27.04.2009 AND DUE TO TYPOGRAPHICAL ERROR, IT WAS WRONGLY MENTIONED AS 27 .04.2008 IN THE AGREEMENT. THE AO DID NOT ACCEPT THE SAID CONTENTIONS AND HENC E PROCEEDED TO ASSESS AN AMOUNT OF RS.36,81,701/- AS THE PROFIT ARISING ON S ALE OF THE FLAT CITED ABOVE. THE LD CIT(A), HOWEVER, ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND ACCORDINGLY DELETED THE SAID ADDITION. AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD. WE NOTICE THAT THE ASSESSEE HAS RECEIVED ADVANCE PAYMENT OF R S.51.00 LAKHS, ONLY DURING FEBRUARY AND MARCH, 2009. REFERRING TO THE DATES OF THE RECEIPT OF ADVANCE AMOUNTS REFERRED ABOVE, THE LD A.R CONTENDED BEFORE US THAT THE ASSESSEE COULD NOT HAVE VISUALIZED THE RECEIPT OF ABOVE SAID AMOUN T ON 27.04.2008, I.E., THE DATE NOTED IN THE AGREEMENT. ACCORDINGLY, THE LD A .R SUBMITTED THAT THE LD CIT(A) WAS JUSTIFIED IN ACCEPTING THE EXPLANATION O F THE ASSESSEE THAT THE AGREEMENT WAS ENTERED ON 27.04.2009 AND THE SAID DA TE WAS WRONGLY MENTIONED DUE TO TYPOGRAPHICAL ERROR. WE NOTICE THAT THE LD CIT(A) HAS CONSIDERED THIS FACTUAL ASPECT AND HAS FURTHER NOTED THAT THE POSSE SSION OF FLAT WAS NOT GIVEN BY I.T.A. NO.6529/MUM/2012 3 31.3.2009. ACCORDINGLY, HE HAS DIRECTED THE AO TO DELETE THE IMPUGNED ADDITION. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE R ELEVANT OBSERVATIONS MADE BY LD CIT(A):- 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ARGUMENTS OF THE ASSESSING OFFICER AND THE WRITTEN SUBMISSIONS OF TH E AUTHORIZED REPRESENTATIVE OF THE APPELLANT. IT CAN BE SEEN THA T THE SALE PROCEEDS OF THE FLAT CANNOT BE TAXED IN AY.2009-10 FOR THE FOLL OWING REASONS: 1. THE DATE OF AGREEMENT IS 27.4.2009 AND NOT 27.4.2008, IT IS EVIDENT FROM AGREEMENT ITSELF. IF THE AGREEMENT IS ON 27.4.2008, THEN PAYMENT MADE IN MAR CH, 2009 CANNOT FIND PLACE IN THE AGREEMENT. 2. AS REGARDS THE ARGUMENT OF THE ASSESSING OFFICER TH AT RS.51,00,000/WAS RECEIVED OUT OF SALE CONSIDERATION OF RS.90,00,000/-, IT CAN BE SEEN THAT PART ADVANCE OF SALE CONSIDERATION RECEIVED, DOES NOT MAKE THE SALE COMPLETE. FIRST OF ALL NEARLY 45% OF THE CONSIDERATION IS YET TO BE RE CEIVED DURING THE YEAR. THERE IS NO REGISTRATION AND THERE IS NO POSSESSION GIVEN. HENCE FLAT BEING AN IMMOVABLE PRO PERTY, SALE OF THE ASSETS IS NOT YET COMPLETE. (3) AS PER AS 9 REVENUE HAS TO BE RECOGNIZED WHEN THERE IS NO SIGNIFICANT UNCERTAINTY REGARDING MEASURABILITY AND COLLECTIBILITY OF THE INCOME. IN THIS CASE PART CONSIDERATION IS Y ET TO BE COLLECTED. AND THEREFORE THERE IS SIGNIFICANT UNCER TAINTY ABOUT COLLECTIBILITY. (4) THE VALUE DISCLOSED IN THE CLOSING STOCK IS RS.53,18,700/-. THIS AMOUNT ITSELF IS MORE THAN T HE ADVANCE AMOUNT. IN OTHER WORDS THE ADVANCE RECEIVED DOES NO T EVEN COVER THE COST OF THE ASSET. HENCE THERE WAS NO REASON TO OFFER IT AS A COMPLETED SALE. WE FURTHER NOTICE THAT THE FACTUAL FINDINGS GIVEN B Y THE LD CIT(A) WAS NOT CONTROVERTED BY THE REVENUE BY BRINGING ANY MATERIA L ON RECORD. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFE RE WITH HIS ORDER. I.T.A. NO.6529/MUM/2012 4 8. IN THE RESULT, THE APPEAL FILED BY THE REV ENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 31ST JULY, 2014 . 2 %$ . 3 4 5 6 31ST JULY, 2014 - 7/ 8 SD SD ( . / D. MANMOHAN ) ( . . , / B.R. BASKARAN ) / VICE- PRESIDENT / ACCOUNTANT MEMBER . / MUMBAI: 31ST JULY,2014. . ' . ./ SRL , SR. PS !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. !&' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. . =0 ( ! ) / THE CIT(A)- CONCERNED 4. . =0 / CIT CONCERNED 5. >?7 ('0'@# , !1 !@#$ , . / / DR, ITAT, MUMBAI CONCERNED 6. 7 / / GUARD FILE. A . / BY ORDER, TRUE COPY * (ASSTT. REGISTRAR) !1 !@#$ , . / /ITAT, MUMBAI