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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI M BALAGANESH & SHRI PAVAN KUMAR GADALE
05/02/2021 सुनवाई क" तार"ख / Date of Hearing घोषणा क" तार"ख /Date of Pronouncement 03/05/2021 आदेश / O R D E R
PER PAVAN KUMAR GADALE - JM:
The assessee has filed the appeal against the order of Principle Commissioner of Income Tax (Pr. CIT)-20, Mumbai passed u/s. 263 of the Income Tax Act, 1961. The assessee has raised the following grounds of appeal:
“1. The Hon’ble Principal Commissioner of Income Tax had erred in law and fact in setting aside the assessment M/s. Anant Enterprises, Mumbai. and referring back the same to the Ld. A.O to conduct a fresh assessment on the basis that the order passed u/s 143(3) of the Act by the A.O is deemed to be erroneous in so far as it is prejudicial to the interest of revenue”. 2.The Brief facts of the case are that the assessee is a partnership firm and carrying on business as builder and developer. The assessee has filed the return of income on 30.11.2014 with total income of Rs.1,06,030/-and the return of income was processed u/s 143(1) of the Act, subsequently the case was selected for scrutiny and notice U/sec 143(2) and 142(1) of the Act are issued. In compliance, the Ld. AR of the assessee appeared from time to time and filed the details. The A.O observed that the assessee is carrying on business as builder and developer and during the said financial year the assessee has disclosed the sale of shop at Khargar project for Rs. 50 Lacs and sale of flats at Karjat Project for Rs. 72.97 Lacs. The A.O has considered the submissions and accepted the income as per the return of income filed and passed the order u/s 143(3) of the Act on 26.12.2016 with the total income of Rs1,06,030/-. Subsequently, the Pr.CIT found that A.O has failed to conduct appropriate enquiries relevant to the /Mum/2019 M/s. Anant Enterprises, Mumbai. assessable income and therefore observed that the assessment order is erroneous and prejudicial to the interest of revenue and issued the notice u/s 263 of the Act to the assessee on 30.01.2019. The Pr.CIT finds that assessee has paid stamp duty on 07.05.2013 in respect of sale of flats and not on 28.03.2013 and the aggregate value which the stamp valuation authority has adopted is Rs.1,38,55,000/.- The Ld.AR of the assessee attended and explained the case. The Pr.CIT found that as per the assessment record, the assessee has sold flats on 07.05.2013 for Rs.61,31,706/-and reflected in the profit and loss account. Whereas, the stamp valuation adopted for sale of flats is Rs. 1,38,55,000/-as per the registered deed dated 07.05.2013.The assessee has adopted the incorrect sale value in the books of accounts and therefore the difference in sale value has to be added as per the provisions of Sec.43CA of the Act. The assessee has filed reply in the course of revisionary proceedings explaining that the flats were booked in the financial year 2009-10 and the allotments were issued in the F.Y 2010-11, therefore, the assessee has offered the income for taxation in the F.Y 2012-13 M/s. Anant Enterprises, Mumbai. relevant to A.Y 2013-14. During the financial year 2013-14 only agreements were registered and no income has been earned by the assessee, since the bookings and allotment were offered in the relevant assessment year hence the provisions of Sec. 43CA of the Act shall not be applicable. Whereas, the Pr. CIT considered the facts, dealt on the issues, the AIR information and the provisions of Sec. 43CA of the Act and observes that the order of the A.O is erroneous and prejudicial to the interest of the revenue. The Pr.CIT find that the applications for bookings of flats filed in the course of hearing does not give the complete details of the sale consideration in respect of the flats booked. Further, the Ld.Pr.CIT found that the assessee has not provided complete details of payments and the provisions of Sec. 43CA of the Act are applicable from A.Y 2014-15 . The assessee also has failed to produce any letter of allotment of flat specifying the area of the flat and relevant details. The Pr. CIT observed that that the A.O has not undertaken any enquiry in respect of the sale consideration of the flats as claimed by the assessee. Therefore, the order passed by the A.O is erroneous M/s. Anant Enterprises, Mumbai. and prejudicial to the interest of the revenue and the order is set aside. The disputed issues are restored to the file of the A.O for examining the value of the flats and evidences filed and to conduct the enquiry and order u/s 263 of the Act was passed on 18.03.2019. Aggrieved by the order of the Pr. CIT, the assessee has filed an appeal before the Honble Tribunal.
At the time of hearing, the Ld. AR of the assessee submitted that the Pr.CIT has erred in considering the order passed by the A.O as erroneous and prejudicial to the interest of the revenue irrespective of the fact that the assessee has provided the complete details before the A.O in the assessment proceedings. The A.O on verification of details has accepted the return of income. The Ld. AR further referred to the paper book in respect of applications made for the allotment of flat and the bank statements of the firm disclosing the amount received from the applicants and also the agreement of sale and submitted that the A.O has made enquiry and took a possible view, therefore the provisions of Sec.43CA of the Act shall not be applicable to current year and the assessee has disclosed the income in the A.Y.2013-14 and M/s. Anant Enterprises, Mumbai. supported his arguments with judicial decisions and paper book and prayed for allowing the appeal.
Contra, the Ld. DR supported the order of the Pr. CIT and submitted that the provisions of Sec. 43CA(3) of the Act are very much applicable to the assessee and prayed for dismissal of the appeal.
We heard the rival submissions and perused the material on record. The sole crux of the disputed issue is with respect to revision order passed by the Ld.Pr.CIT as the A.O has not made enquiries on the sale consideration of flats. The Ld.ARs contentions are that the provisions of Sec43CA of the Act are not applicable as the assessee firm has made the bookings for flats in the year 2010 and received the amounts over a period of time. Finally the flats were registered and income has been offered in the Assessment Year 2013-14. The Ld. AR referred to the applications in respect of flats at page 10 to 12 of the paper book and bank statements reflecting the credits at page 16 of the paper book,the Ld.AR further highlighted that the stamp duty was paid and for some reasons the agreements could not be registered M/s. Anant Enterprises, Mumbai. on that particular date and finally were registered on 07.06.2013. The Ld. AR also referred to the agreement of sale at page 50 of the paper book which was entered on 07.05.2013 in respect of applications made in 2010-11. The contentions of the Ld. AR that the provisions of Sec.43CA(3) shall not be applicable to the current year and the assessee has offered the income on the flats in the earlier years. The observations of the Pr. CIT that the A.O has not conducted enquiries is devoid of merits as the A.O has passed the scrutiny assessment order after verifying the documents and information filed in the course of assessment proceedings.
Whereas, the Ld.DR submitted that the agreement of sale was entered on 07.05.2013 and the transaction falls in the A.Y 2014-15 therefore the provisions of sec 43CA of the Act shall mandatorily applicable and the A.O. has not applied his mind.
We find on perusal of the facts and the material papers filed, in respect of the application referred by the Ld.AR at page 8 to 10, it was only made on 26.03.2010 with the details of cheques in respect of M/s. Anant Enterprises, Mumbai. the flats. We also find that the assessee has filed the details referred at page 4 to 35 of the paper book before the A.O on 14.12.2016 in compliance to the notice issued u/sec142(1) of the Act which cannot be disputed. The assessee has filed the requisite details in respect of flats which includes name of flat owner, date of booking, stamp duty payment dates, date of registration , agreement value and also market value as on the date of registration. Further the agreements of sale referred at page 36 to 223 of the paper book were filed in the course of hearing before the A.O. On perusal of the assessment order at page 1 Para 3 the assessing officer has made observations that in respect of the projects, the assesses has furnished the relevant details.
The revenue is disputing on non conduct of enquiry, but we find the assessee firm has discharged its burden of proof on submitting the vital requisite details called for by the assessing officer by issue of statutory notice U/sec142(1) of the Act along with the questioner which cannot be over looked. Since the information was available with the A.O in the course of the assessment, the A.O. has considered the facts, M/s. Anant Enterprises, Mumbai. submissions and evidences filed and took a view. In the assessment proceedings the assessee has responded to the clarifications / quires raised by the A.O. and after verification and satisfaction of claims, the assessing officer has passed the order U/sec143(3) of the Act.
Further, the assessee firm has offered income on the sale transactions in the Asst Year 2013-14, and these facts are filed before the assessing officer and was accepted by the revenue. The payment of stamp duty and income on flats was offered in AY 2013-14 but only registrations happened on 7/05/2013 which falls in the Asst year 2014-15, Hence there is no loss of revenue to the Income tax department and the provisions of Sec 43CA of the Act are not applicable.
We considering the facts, circumstances and the provisions of law are of the considered view that the Assessing officer order passed u/sec143(3) of the Act does not satisfy the twin conditions of erroneous and prejudicial to the interest of revenue and Accordingly, the revision order passed by the Ld.Pr.CIT is M/s. Anant Enterprises, Mumbai. quashed and allow the grounds of appeal of the Assesses.
In the result, the appeal filed by the assessee is allowed.