DY COMMISSIONER OF INCOME TAX , PANVEL vs. BALAJI REALTORS , PANVEL

PER SATBEER SINGH GODARA, J.M. :

This Revenue’s appeal for assessment year 2015-

2016, arises against the National Faceless Appeal Centre [in

short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/

250/2023-24/1052356158(1), dated 26.04.2023, in

proceedings u/s.143(3) of the Income Tax Act, 1961 (in short

“the Act”).

Heard both the parties. Case file perused.

grounds in the instant appeal :

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law, the CIT(A) erred in deleting the addition of

Rs.3,76,62,000/- by not appreciating that the addition

was made on account of enhanced sales consideration

u/s. 43CA of the Act as per valuation of stamp duty

authority.

law, the CIT(A) erred in holding that the AO should have

referred the case to the DVO u/s.55A of the Act when the

impugned Valuation Report was never part of any

submissions of assessee made during assessment

proceedings. 3. On the facts and in the circumstances of the case and in

law, the CIT(A) erred in considering the area of sold

property as 7314 sq. mtrs. When the actual area as per

Sale Deed is 10020 sq. mtrs.

law, the CIT(A) erred in deleting the addition of

Rs.7,50,000/- made on account of brokerage expenses

without appreciating that there was one common partner

in the assessee firm and the buyer firm and hence the

payment of brokerage was not justified.”

Sec.43CA addition amounting to Rs.3,76,62,000/- made in the

course of assessment and deleted in the lower appellate

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discussion. We make it clear that there is no dispute between

the parties inter alia on the relevant facts that the assessee

had indeed sold the land in question in the relevant previous

year involving actual sale consideration of Rs.9 crore which

carried stamp value of Rs.12,76,62,000/-. Faced with this

situation, learned assessing authority invoked sec.43CA of the

Act to make the impugned addition of Rs.3,76,62,000/-.

vide following detailed discussion :

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This leaves the Revenue aggrieved.

respective stands during the course of hearing before us. The

assessee has vehemently supported the CIT(A)-NFAC’s above

extracted discussion that the land in question in fact involves

an area admeasuring 7814.210 sq. metre than that taken by

the Assessing Officer of 10020 sq. metres. Mr. Gujarati sought

to clarify that the actual area herein is to the extent of above

former measurement(s) only and therefore, the lower appellate

findings have rightly granted the relief herein to that taxpayer.

He further stated that the Assessing Officer had not taken into

consideration all these clinching facts indicating various

distressing factors regarding that land sold in the relevant

previous year. He lastly buttresses the point that the assessee

had filed registered valuer’s report as well as it’s Architect’s

certificate duly proving the land as not usable to the extent of

difference between the measurements quoted in the sale

agreement deed vis-à-vis the actual area in question.

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concurrence in principle. It prima facie emerges from the

relevant tabulation in para-5.2.2 of the lower appellate

discussion that the CIT(A)-NFAC has treated the entire sale

consideration of Rs.9 crores for the above reduced area of

7814.2 square metres only whereas the transaction reveals the

said price as pertaining to the entire parcel of the land

admeasuring 10020 sq. metres (supra). He has not reduced

the said consideration proportionately in other words. There is

further no material before us that the learned CIT(A)-NFAC

had obtained any remand report from the field authorities

regarding the variation in the actual area hereinabove (supra).

Faced with this situation, we are of the considered view that

the Revenue’s instant first and former substantive ground

deserves to be restored to the assessing authority for it’s

afresh appropriate adjudication as per law, preferably within

three effective opportunities of hearing.

6.1. Learned counsel at this stage reiterated the fact that

no DVO had been appointed going by the mandates of

sec.43CA (2) and (3) of the Act. We find force in the assessee’s

instant plea in light of Sunil Kumar Agarwal vs. CIT [2015]

372 ITR 83 (Cal.) (HC) wherein their lordships’ hold in the

context of sec.50C, applicable mutatis mutandis herein, that

such a reference is indeed mandatory even if the assessee

concerned does not raise any such plea before the

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departmental authorities. We thus direct the learned assessing

authority to make a statutory reference to the DVO in very

terms to be followed by further consequential proceedings as

per law. This Revenue’s former substantive grounds is allowed

for statistical purposes. Ordered accordingly.

grounds seeking to restore brokerage expenditure disallowance

of Rs.7,50,000/- for the reason that there was a common

partner between the taxpayer and the recipient firm. The lower

appellate discussion in question has granted the impugned

relief to the assessee as under :

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assessee had raised it’s claim of Rs.18 lakhs which stands

accepted only to the tune of Rs.7.5 lakhs in question. Learned

CIT(A)-NFAC is found to have given due consideration to all

these relevant facts in the lower appellate discussion. Faced

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with this situation, we find no reason to accept the Revenue’s

instant latter arguments seeking to disallow brokerage

expenditure in real estate development activity being in the

nature of routine business expenditure. Rejected accordingly.

statistical purposes in above terms.

Order pronounced in the open Court on 29.07.2024.

Sd/- Sd/- [INTURI RAMA RAO] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER

Pune, Dated 29th July, 2024

VBP/-

Copy to

//By Order//

//True Copy //

Sr. Private Secretary, ITAT, Pune Benches, Pune.