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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
Before: MS SUCHITRA KAMBLE & SH. PRASHANT MAHARISHI
ORDER
PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order dated 21/08/2020 passed by CIT (A)-25, New Delhi for assessment year 2012-13.
The grounds of appeal are as under:
“1. Whether the Ld. GIT (A) was justified in upholding the order under section 143(3) even without proper appreciation of the Voluminous evidences on record.
2. Whether the Ld. CIT (A) was justified in upholding the impugned order, without- appreciating the concept of real income and deeming
provision regarding unsold of incomplete house property, u/s 22 even without disputing the bonafide explanation/evidences on record.
3. Whether the Ld. CIT (A) was justified by upholding an impugned assessment order is justified even without pointing out the ground for refusal of explanation on the issue involved.
4. Whether the Ld. CIT (A) was justified by upholding the order of Ld. A.O. on the basis of suo-moto moto drawn adverse inference from the various citations on account of deeming rental income u/s 22 of the I.Tax Act.
5. Whether the Ld. CIT (A) was justified by upholding the additions by way of deeming rental income @2% of the opening stock amounting to Rs.1,04,73,951 made by the Ld.A.O.as the same are unlawful, on surmises and unjustified and based upon his own assumptions and presumptions.
6. That the Ld. CIT (A)/A.Q, has erred in upholding the assessment order in terms of levying of interest as well as direction for initiation of penalty u/s 271(1)(c) of the Act which is contrary to the law.”
The assessee company is engaged in real estate. The assessee Company e-filed return of income for Assessment Year 2012-13 on 20/09/2012 declaring an income of R. 1,17,99,240/-. The assessee has shown property under stock- in-trade value at Rs. 73,49,31,722/- as on 1/4/2011 and at Rs. 87,34,40,831/- as on 31/3/2012. The Assessing Officer made addition of Rs.1,04,73,951/- being the difference of the property A & B to arrive at the value of properties which were appearing on the opening stock and remain with the assessee till the end of the year being presumptive rate calculated at rate of 2% of value of house property representing cost of accusation as appearing in the balance sheet. The Assessing Officer also made addition of Rs. 17,16,800/- advance as loan to Mr. Ankur Arora during the year and held the said amount to be a deemed dividend in the hands of the assessee as per provisions of Section 2(22) (e).
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT (A) dismissed the appeal of the assessee.
The Ld. AR submitted that the Assessing Officer has suo moto invoke Section 22 & on surmise basis added bearing gross rent being 2% of opening stock of property as income from house property without perusing the material on record as well as the nature of business and the basis of chargeability of gross rent. The Ld. AR submitted that the deeming provisions come into picture only if the assessee made investment in property but is not applicable for the dealer of the property particularly with respect to incomplete properties. The Ld. AR relied upon the decision of the Tribunal in case of Ansal Housing (389 ITR 373). The Ld. AR submitted that these are stock in trade and should have not been considered as business income. Therefore, the Ld. AR submitted that the addition may be deleted.
The Ld. DR relied upon the assessment order and the order of the CIT(A). The Ld. DR submitted that from the details given by the assessee in paper book it can be seen that certain properties are with the assessee and certain properties were sold immediately. The assessee has not given details as regards to completion of the properties as well as non completion of property on a definite basis. Therefore, the order of the Assessing Officer be confirmed.
We have heard both the parties and perused the material available on record. It is pertinent to note that the decision relied by the assessee is not relevant in assessee’s own case as the assessee has not shown on record that the assessee is treating the said sale as stock in trade. At the time of hearing, the assessee could not produce non-complete certificate or completion certificate despite giving directions. There was only affidavit which was also not stating the status of the property but was giving the statement that the assessee has not taken any CC from the sale of the buildings. Thus, there is no completion certificate as well as no justification for the non production of no completion certificate. Therefore, the CIT(A) has rightly confirmed the addition and there is no need to interfere with the findings of the CIT(A).