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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
This appeal is filed by M/s Shah Realtors (Assessee/ Appellant) for Assessment Year 2013-14 against the order of the Commissioner of income-tax (Appeal)-3, Thane [the learned CIT(A)] dated 10.04.2018.
The only grievance in this appeal is that an addition of Rs.3,59,855/- has been confirmed in the hands of the assessee as suppressed receipts of alleged ‘on-money‘ based on comparison of rate of sale price per square feet of two different shops sold at two different times
“1. The learned CIT(A) erred in confirming the addition of Rs. 3,59,855/- under the pretext of suppressed receipts on account of alleged 'on-money', wherein the Stamp duty value is lower than the amount declared under sale, the addition has been made without any evidence on record or conclusive proof, and merely based on conjectures and surmises, such addition is made. Hence the addition may be deleted.
2. The learned CIT(A) erred in not appreciating that the sale of Shop No. 7 has been done after a period of 8.5 months(approx) and the difference in price was due to various factors like the market conditions, choice of buyer, location of shop, view of each shop, terms of payment with each shop, the side located at, and various other factors. In view of the same, the addition may be deleted.”
The brief facts of the case shows that assessee is a builder and developer partnership firm, who filed its returned of income on 22.09.2013 at a total income of Rs. 1,02,26,107/-. During the year, assessee has two ongoing projects at Vasai East, Palghar. The case of the assessee was picked up for scrutiny.
The learned Assessing Officer found that there is a gap variance between the selling rate of ₹1457/- per sq. ft. therefore, the assessee was asked to show cause that why an addition of ₹3,59,855/- [ Rs 1457/- * 247 square feet ] should not be made in the hands of the assessee for showing less consideration of shop no.2. The assessee submitted detailed reply and objected to the same. However, the learned Assessing Officer following the decision of the co-ordinate Bench in case of Diamond Investment and Properties, made the above addition. Accordingly, the assessment order was passed Under section 143(3) of the Act on 26th November, 2015 determining the total income of assessee at ₹1,05,85,962/- making the above addition of ₹3,59,855/-.
The assessee preferred the appeal before the learned CIT (A), who confirmed the above addition and therefore, assessee is in appeal before us.
The learned Departmental Representative vehemently supported the orders of the lower authorities.
We have carefully considered the rival contentions and perused the orders of the lower authorities. The facts shows that assessee has sold shop no.2 on 26th November, 2012 admeasuring 247 sq. ft for ₹9,90,000/-. After almost 9 months, the assessee sold shop no.7 admeasuring 215 sq. ft. at ₹11,75,000/-. The learned Assessing Officer worked out the average selling price of both the shops and made addition in the hands of the assessee by comparing the higher rates to the area of shops sold at lower rate. On careful examination of the map shown before us by the learned Authorised Representative, it is apparent that shop no.7 is in the middle of the shopping center, whereas shop no.2 is not in the middle but inside and adjacent to a corner shop no 1. Further, there is a time gap of almost 9 months in the sale of both the shops. Naturally, most probably, shop sold in
In the Result, we direct the Assessing Officer to delete the addition of Rs. 3,59,555/- made in the hands of the assessee.
Order pronounced in the open court on03.03.2022.