BUILD EARTH DEVELOPERS,SILIGURI vs. ITO, WARD 1(2),, SILIGURI

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ITA 2153/KOL/2025Status: DisposedITAT Kolkata16 July 2026AY 2018-20194 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO made the addition by misconstruing the facts, as the Rs. 79,00,000/- was for stamp duty on Joint Development Agreements and not an amount to be accounted for in the books. The assessee, as a developer, had incurred work-in-progress expenditure.

What were the facts?

The assessee's case was selected for limited scrutiny regarding investment in immovable property. The AO added Rs. 79,00,000/- as unexplained investment under Section 68, considering it as undisclosed in the books, while the assessee argued it was for stamp duty on Joint Development Agreements.

What were the issues?

Whether the addition of Rs. 79,00,000/- as unexplained investment under Section 68 was justified when it represented stamp duty on Joint Development Agreements and not an undisclosed amount in the assessee's books. Whether the addition was outside the scope of limited scrutiny.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri Sunil Surana, FCA
For Respondent: Shri Sallong Yaden, CIT-DR
Hearing: 08.07.2026Pronounced: 16.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.2153/KOL/2025 Assessment Year:(2018-19) Build Earth Developers, ITO, H. No. 65/23/09, Ward No.11, Hill Vs. Ward – 1(2), Card Road, 1st Floor, Meghdoot Siliguri Cinema Hall Building, Siliguri – 734001, West Bengal [PAN: AARFB2301G] (Appellant) .. (Respondent) Appellant by : Shri Sunil Surana, FCA Respondent by: Shri Sallong Yaden, CIT-DR Date of Hearing 08.07.2026 Date of Pronouncement 16.07.2026 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: This appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals),National Faceless Appeal Centre (hereinafter referred to as the “ld.CIT(A)”], dated 28.04.2025 for the Assessment Year (AY) 2018-19.

2.

At the outset, we observe from the appeal folder that the appeal is filed late by 84 days by the assessee for the affidavit along with the condonation petition is filed. After perusal of the condonation petition/affidavit, we find the reasons for the delay to bonafide and genuine and accordingly, the delay is condoned and appeal is admitted for adjudication.

ITA No.2153/Kol/2025/A.Y. 2018-19 Build Earth Developers vs. ITO 3. At the time of hearing, learned Authorized Representative (ld. AR) of the assessee did not wish to press Ground Nos. 1, therefore, we dismiss this ground as not pressed.

4.

The issues raised in Ground Nos.2, 3 and 4 relates to confirming the addition of Rs.79,00,000/- made u/s 69 of the Income-tax Act, 1961 (In short, ‘the Act’ when the issue was outside the scope of limited scrutiny which was selected to examine investment in immovable property.

5.

The facts of the case in brief are that the case was selected for limited scrutiny assessment under the E-assessment Scheme, 2019 for examining of investment in immovable property. Accordingly, notices u/s 143(2) and 142(1) of the Act along with questionnaire were issued which were duly replied by assessee. The assessee submitted before the Assessing Officer (In short, ‘the AO’) that there is no sale/purchase transactions during the financial year under consideration. In fact, the Joint Development Agreements for development of property were executed. The assessee also produced before the AO the registered deeds of both the transactions. Thereafter, the AO noted that the vale on the Joint Development Agreements by the stamp authority was stated at Rs.79,00,000/- which is more than work-in-progress of Rs.42,92,465/- which according to the AO has not been accounted for in the assessee’s books of account. The AO, thereafter, issued show cause notice as to why the said amount which was not disclosed in the books of account of Rs.79,00,000/- should not be treated as unexplained investment u/s 68 of the Act. The AO noted that since the assessee has offered no explanation, the same was added to the income in the assessment framed u/s 143(3) r.w.s. 143(3A) & 143(3B) of the Act, dated 23.03.2021.

6.

In the appellate proceedings, the ld. CIT(A) confirmed the order of AO.

ITA No.2153/Kol/2025/A.Y. 2018-19 Build Earth Developers vs. ITO 7. After hearing rival submissions and perusing the materials available on record including the facts as placed before us, we note that assessee’s case was selected for limited scrutiny on the issue of examination of investment in immovable property. We note that during the year, the assessee has entered into the Joint Development Agreements with two parties, namely, first party comprising of Abhijit Roy, Shila Roy and Munmun Roy and second Goutam Roy. We note that the AO has made the addition in respect of unexplained investment of Rs.79,00,000/- by misconstruing the facts that the assessee has not disclosed the said amount in the books of accounts whereas as a matter of fact, the said amount is only for the purpose of registration of Joint Development Agreement as the assessee needs not account for the said amount at all. We note that the assessee is a developer and started of execution of the Joint Development Agreement and also incurred expenditure of Rs.42,92,465/-, which were shown under the head of ‘work-in-progress’. Therefore, the very basis of the order passed by the AO is wrong and cannot be sustained. Similarly, the ld. CIT(A) has wrongly upheld the order of AO without going into the merits of the case. Consequently, we set-aside the order of ld. CIT(A) and direct the AO to delete the addition. Hence, Ground Nos. 2, 3 and 4 are hereby allowed.

8.

In the result, the appeal of the assessee is allowed.

The order is pronounced in the open Court on 16/07/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated: 16/07/2026 SAMANTA

ITA No.2153/Kol/2025/A.Y. 2018-19 Build Earth Developers vs. ITO आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 3. 4. आयकर] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[ फाईल/ Guard file.

BY ORDER, // TRUE COPY // Asstt.Registrar, ITAT, Kolkata

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