NAINI RESORTS & FLORICULTURE PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

This appeal has been filed by the assessee against the order of the CIT(A) dated 14.08.2014 by taking the following affective ground of appeal :- “

The Assessing Officer was of the view that the assessee has created these documents to increase cost of acquisition and reducing the capital gain. He noted from the fixed assets schedule of the balance sheet total value of the land and building as under ; land 28,90,003 building 6763526. The assessing officer treated the cost of construction incurred by the assessee to be false as according to him the verbal agreement of the sale of the property was made in June, 2009 as the assessee has received a sum of Rs. 1,50,00,000/- vide cheque no. 27927 on 24.6.2009. He was of the view that no seller will spend the money in construction once, he has agreed for the sale of the property. When questioned in this regard, the assessee submitted that the construction over the plot was carried out from 2000-01 to 2009-10 and it is a general practice of the building material supplier to keep on supplying material from time to time and raise the bill at certain periodicity. Maxmimim bricks were consumed on terrace for parapet wall. The assessing officer rejected the claim of the assessee as in his opinion. This was to avoid the tax and made the addition on account of undisclosed capital gain amount into Rs. 1,06,08,738/- .

When the matter went before the CIT(A), the CIT(A) confirmed the order of the assessing officer. We heard the rival submission and carefully considered the same along with the order of the tax authorities below, we noted the addition of Rs. 1,06,08,738/- has been reduced by the CIT(A) to Rs. 1,00,77,656/-. Therefore the issue before us relate to the sustenance of the addition of Rs. 1,00,77,656/- not Rs. 1,06,08,738. We noted this is a case where the assessee has engaged contractor M/s Axiom Buildwell Pvt. Ltd. to whom a sum of Rs. 85,00,000/- was paid the assessing officer sought the confirmation from the contractor M/s. Axium Buildwell Pvt. Ltd. by issuing the notice u/s 133(6) which was received by them on 26.3.2013. The assessing officer completed the assessment on 25.3.2013 the contractor subsequently submitted his reply and confirmed the fact even it is not a case where the assessee has not only shown cost of construction in his books of account. From page 73 to 81 of the paper book, it is an apparent that M/s. Axiom buildwell Pvt. Ltd. has duly replied along with the copy of the bill raised by them in favour of the assessee. The copy of which is available at page 78 and also the copy of TDS Certificate available at page 80 and 81 of the paper book. Not only this, M/s. Axiom buildwell Pvt. Ltd. (Now, Atya Contracts Pvt. Ltd.) vide his letter dated 30th March, 2013 available at page 73 duly confirmed before the assessing officer by submitting its profit and loss account, bank account and the copy of the income tax return that they have carried out the work and received a sum of Rs. 85,00,000/-. Not only this, we noted that the assessing officer has duly submitted the bills of M/s. Ganesh Carrier, M/s. Virender Singh, M/s. Swami Traders and Axiom water bill showing the expenses incurred on rodi N. sand etc. from the month of June and in July. The assessing officer or revenue did not brought on record any evidence proving that bills are not genuine or bogus even no confirmation except Axiom Buildwell Pvt. Ltd. was asked for. The assessing officer simply treated the expenses incurred by the assessee on the construction to be bogus. This is a settled law in view of the decision of the Hon’ble Supreme court in the case of Daulat Ram Rawatmull 87 ITR 349 that onus is on the party which alleges that apparent is not real. No cogent material or evidence is brought to our knowledge by the ld. DR which may prove that the expenditure incurred by the assessee were bogus, not only this, we noted from the copy of the balance sheet audited balance sheet of the assessee along with schedule of the fixed assets available at page 67 that the assessee has duly shown the addition in the building at Noida amounting to Rs. 1,06,08,738/-. The assessing officer in correctly mentioned in the assessment order that in the schedule of the fixed assets cost of the building has been shown only at Rs. 6763526/-.

In view of this fact, we set aside the order of the CIT(A) and delete the addition made by the assessing officer confirmed by the CIT(A) which was just based on the assumption and the presumptions without bringing any evidence on record.

In the result, appeal filed by the assessee is allowed. (Order Pronounced in the Open Court on 11/12/2017)