ACIT 26 (3), MUMBAI vs. M/S SHREE LAXMI DEVELOPERS, MUMBAI

Identical grounds have been raised by the Revenue in both these appeals assailing the findings of the CIT(A), therefore, these appeals are taken up together for adjudication and are decided vide this common order.

Shri Brajendra Kumar representing the department submitted that identical issues are involved in both these appeals. The learned Departmental Representative (DR) submitted that the CIT(A) has deleted the addition of Rs.4,25,73,600/- in assessment year 2007-08 (Rs.5,67,64,800/- for assessment year 2008-09) on account of suppressed sale of basement area during the relevant assessment year. The ld. DR submitted that the assesse is a building contractor and a developer. The assesssee had developed a project “Dream Plaza”, on a plot admeasuring 2864 sq. meters. The permissible built up area on the said plot was 105391 sq. ft. The assesse in its statement has shown saleable area as 73855 sq. ft. The assesse has shown 31536 sq. ft. area less, hence, the assesse has suppressed sale of aforesaid area. During the period, relevant to the assessment year under appeal, the assesse had sold 50% of the project area. The AO thus, divided the supressed area and made addition of Rs.4.57 crores in A.Y. 2007-08 and addition of Rs.5.67 crores in A.Y. 2008-09. The CIT(A) deleted the addition without appreciating the facts on record. The ld. DR prayed for reversing findings of the CIT(A) and confirming the addition made in the assessment orders for the respective assessment years.

We have heard the submissions made by ld. DR and have perused the orders of the authorities below. We find that this is second round of litigation. In the first round, the addition made by AO was deleted by the CIT(A) vide order dated 26/04/2010. The department filed appeal against the said order. The Tribunal vide order dated 19/08/2015 restored the issue to the file of AO with (A.Y.2007-08) /MUM/2019(A.Y.2008-09)

specific directions. The AO on the directions of the Tribunal passed the order dated 29/10/2016. The CIT(A) in the impugned order has observed that the assessment order passed by the AO is not as per the directions of the Tribunal. The CIT(A) examined the issue in detail and thereafter sought remand report from the AO. After considering the remand report dated 16/11/2018, the CIT(A) concluded that the difference between the area disclosed by the appellant and computed by the AO is due to inclusion of basement area admeasuring 18934 sq. ft. by the AO on the pretext that the same has not been included in the saleable area of the project. The CIT(A) after seeking spot inspection report from the Ward Inspector held that the basement is used as parking area which is run on a commercial basis. Parking fee is charged from the vehicles. There is no documentary evidence that the basement area was sold. The CIT(A) deleted the addition after recording the above facts. The Revenue has not rebutted the findings of CIT(A). In the absence of any contrary material, we find no reason to interfere with the reasoned findings of the First Appellate Authority, hence, the same are upheld and the appeals of the Revenue for both the impugned assessment years are dismissed.