JUKSHAN CONSTRUCTION PVT. LTD.,GORAKHPUR V. ACIT, RANGE - 1, GORAKHPUR

ITA 105/VNS/2023

AI Insights

Jukshan Construction Pvt. Ltd. appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs.2,44,97,850 under Section 43CA(1) of the Income Tax Act for the Assessment Year 2015-16. The addition was based on the discrepancy between the sale value of flats and their stamp value. The Tribunal noted that the assessee had not provided sufficient details to substantiate the lower sale value compared to the stamp value. The matter was remanded back to the AO to allow the assessee to demonstrate the valuation difference and to possibly refer the matter to the District Valuation Officer (DVO) if necessary.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473603 (ITAT-VARANASI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 27-10-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMALENDU NATH MISHRA
• Assessee Lawyers: ARVIND SIKARIA
• Keywords: Set aside; Valuation report
• Section: 143(3); 43CA

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, VARANASI BEFORE: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.105/VNS/2023 (Assessment Year :2015-16) Jukshan Construction Private Limited Shop No.F-11, K.D.Complex, Rapti Nagar Chowk, Gorakhpur-273 001 Vs. Asstt. Commissioner of Income Tax, Range-1 Gorakhpur PAN/GIR No.AABCJ9010H (Appellant) .. (Respondent) Assessee by Shri Arvind Sikaria and Shri D.D.Srivastava Revenue by Shri Amalendu Nath Mishra, CIT DR Date of Hearing 12/09/2024 Date of Pronouncement 02/12/2024 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 11/09/2023 passed by NFAC Delhi for the quantum of the assessment passed u/s 143(3) for the Assessment Year 2015-16. 2. In various grounds of appeal assessee has challenged the addition of Rs.2,44,97,850/- made u/s.43CA(1). ITA No.105/VNS/2023 Jukshan Construction Pvt. Ltd. 2 3. The brief facts are that assessee company is in the business of real estate and has filed its return of income for Rs.30,26,670/- on 01/10/2015. The case was selected for limited scrutiny for the reason that assessee had real estate business with high closing stock and to verify whether assessee has adopted Percentage Completion Method. The ld. AO noted that in most of the cases the sale value of the flats was much less than the stamp value, the details of which has been given in the impugned assessment order at pages 2 & 3. Thus, he noted that against sale value of Rs.3,00,01,150/-, the stamp value of different plots sold was Rs.5,14,74,000/-. Thus, there was a difference of Rs.2,14,97,850/-. In response to the notice assessee did not file any reply and accordingly, ld. AO made addition u/s.43CA. The ld. CIT (A) has confirmed the said addition holding that that by the Finance Act 2013, Section 43CA has been brought in the statute which is applicable in the case of the assessee for the present assessment year and accordingly AO is justified in adding the difference. 4. After hearing both the parties and on perusal of the relevant finding given in the impugned order, it is seen that assessee has merely challenged the scope of limited scrutiny before us. Once assessment has been picked up for limited scrutiny to examine the high value of the closing stock and the profits disclosed by the assessee, then it includes the sale value declared by the assessee including the applicability of Section 43CA. However, on merits, ld. Counsel has stated that assessee had offered to take ITA No.105/VNS/2023 Jukshan Construction Pvt. Ltd. 3 the valuation report by the DVO before the ld. AO, but the same was not accepted. Since assessee had not filed any details as to how the value of plots sold is less than stamp value, therefore, in the interest of justice, this issue is set aside to the file of ld. AO and assessee has to demonstrate and substantiate that the value on which it has shown the sales is less than the stamp value and assessee can demonstrate the factors of difference in value. Ld. AO if deemed necessary and if he feels satisfied, he can then refer the matter to the DVO to ascertain the correct value. In case the difference in valuation is less than 10%, then no disallowance should be made u/s.43CA. Accordingly, appeal of the assessee is allowed for statistical purposes. 5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on 02/12/2024. Sd/- (B.R. BASKARAN) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Varanasi; Dated 02/12/2024 KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A), Varanasi. 4. CIT 5. DR, ITAT, Varanasi 6. Guard file. //True Copy// ITA No.105/VNS/2023 Jukshan Construction Pvt. Ltd. 4 BY ORDER, (Asstt. Registrar) ITAT, Varanasi "