ASHA REAL ESTATES AND DEVELOPERS PRIVATE LTD.,KOLKATA vs. ITO, WARD-9(1), KOLKATA, KOLKATA

आयकर अपील�य अधीकरण, �यायपीठ – “C” कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH “C” KOLKATA Before Shri S.S.Godara, Judicial Member and Dr. A.L. Saini, Accountant Member ITA No.1967/Kol/2016 Assessment Year :2011-12 Asha Real Estates And V/s. Income Tax Officer, Developers Pvt. Ltd., Ward-9(1), Kolkata RoomNo.210, 2nd Floor, 163, Rabindra Sarani, Kolkata-69 [PAN No.AAECA 4266 F] .. अपीलाथ� /Appellant ��यथ�/Respondent Shri Rajiv Kumar Mahajan, FCA अपीलाथ� क� ओर से/By Appellant Shri Saurabh Kumar, Addl. CIT-SR-DR ��यथ� क� ओर से/By Respondent 12-07-2018 सुनवाई क� तार�ख/Date of Hearing 24-08-2018 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R PER S.S.Godara, Judicial Member:- This assessee’s appeal for assessment year 2011-12 arises from the Commissioner of Income Tax (Appeals)-16 Kolkata’s order dated 08.08.2016, passed in case No.594/CIT(A)-16/Kol/2015-16/W-991), upholding the Assessing Officer’s action adding an amount of ₹14,92,918/- as representing under valuation of sale consideration and making u/s 40(a)(ia) disallowance ₹44,00,968/-; respectively in assessment order dated 31.03.2014 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

ITA No.1967/Kol/2016 A.Y. 2011-12 Asha Real Estates & Developers Pvt Ltd. Vs. ITO Ward-9(1), Kol. Page 2 the two flats and 2B on second floor and 3A and 3B on third floor at different rates. The assessee’s case before the Assessing Officer was that said sale prices were an instance of distress sale being in dire need of immediate payment for making corresponding payments to suppliers as well as fresh land purchases. All this failed to impress upon the Assessing Officer who added the impugned under valuation qua the two flats in question 2B ad 3A to the tune of ₹1,40,182 and ₹13,52,736/-; respectively totaling to ₹14,92,918/- in question. The CIT(A) upholds the Assessing Officer’s action as follows:- “4 Grounds No. 3, 4 and 5 are addition on account of under valuation of sales in flats. During the course of assessment it was found that the assessee had sold flats 2B and 3A at less than the market value or stamp duty value of the flats. The AO same to the conclusion that since the deed value is less than the stamp duty value or the market value, the cash component is definitely there and hence made an addition of Rs.14,92,918/-. Before me, the AR has made submission that the assessee was in need of funds, and hence flat were sold less that the market value. Reliance has been also drawn towards the judgments of Nariman Land Developers Private Limited vs. Department of Income Tax vide ITA No.365/3695/Mum/2009, which it has been held that some materials should be found to dispute the contention of the assessee. Here in this case, this judgment is not applicable because the flats have been sold less the stamp value and less the market value of the flats. Hence, the order of the AO is confirmed and the appeal of the assessee is dismissed on grounds 3, 4 and 5.” 3. Both the Learned Representatives reiterate their respective stands. The Revenue is very particular in vehemently contending that the assessee had shown impugned actual sale consideration to be much less than both stamp value or the market value as clarified in the CIT(A)’s findings herein. We find no merit in the instant arguments as neither of the lower authorities has indicated as to what was the actual market price or the stamp price of the two flats taken as the fair market value of the asset in question. We find that the tribunal co-ordinate bench’s decision (supra) decided the identical issue against the Revenue in absence of any material on record indicating under valuation of sale consideration. Neither of the lower authority has referred to any material on record indicative of any cash component involved in sale price

ITA No.1967/Kol/2016 A.Y. 2011-12 Asha Real Estates & Developers Pvt Ltd. Vs. ITO Ward-9(1), Kol. Page 3 of the above two flats. We therefore accept assessee’s instant former substantive ground. The impugned addition of ₹14,92,918/- stands deleted accordingly.

ITA No.1967/Kol/2016 A.Y. 2011-12 Asha Real Estates & Developers Pvt Ltd. Vs. ITO Ward-9(1), Kol. Page 4 enterity without examining each payee’s case since going by the solitary instance of Mr. Mondal (supra) only. We therefore restore 40(a)(ia) issue back to the Assessing Officer for afresh adjudication as per law after affording adequate hearing to the taxpayer.