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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI JOGINDER SINGH, JM & SHRI RAJESH KUMAR, AM
Date of Hearing : 10/09/2015 Date of Pronouncement : 04/01/2016 आदेश / O R D E R PER RAJESH KUMAR, A. M:
These appeals by the assessee and by the Revenue for two different years directed against the order of Commissioner of Income Tax (Appeals)-20, Mumbai (hereinafter called as the CIT(A)) for assessment year 2004-05 and 2005-06 both dated 22-11-2010. Since both these appeals relate to the same assessee and therefore these are clubbed together, heard together and disposed off by this consolidated order for the sake of brevity and convenience. We shall first take up the appeal of the assessee in for the assessment year 2005-06 in which the assessee has raised the following grounds: “
The Commissioner of Income Tax (A)20, Mumbai in the order dated 22nd November 2010 in Appeal No. CIT(A)-20/9/(3)/I.T.205/2009-10 has erred in the facts and circumstances and in law in-
1. Determining and holding alleged under charge in case of flats sold to the following purchasers a. Harilal Shavji Patel b. Ambalal Premji Patel c. Kanji Dharamshi Patel d. Bharat Nanji Patel
2. Failing to consider relevance of time and terms of payment with reference to each of the registered agreements for sale of flats while comparing the rate of realization from the flats and replacing it by applying a uniform rate for sale at Rs.8,990/- per sq.ft. for the entire project of 12 flats.
3. Holding that any further amount was realized/realizable from sale of flats accounted as per the registered agreement of sale and assuming a flat rate of realization at Rs.8,990/- sq. ft.
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd.
Holing that agreements entered into by the appellant and relied upon do not reflect true rates at which the appellant sold 12 flats in the project Joanna Villa.
Holding that the appellant has not correctly declared or disclosed the consideration received by it on sale of 12 flats in the Joanna Villa Apartment project completed during the year.
Holding and alleging that the entire activity of the appellant was pre-meditated with the only object of understating the profits from the project.
Holding and alleging that the contracts on 28th May 2001 with the four purchasers before the development of the project undertaken by the appellant in or around 14th July 2001 were pre-mediated and ill conceived only for understating the income of the project completed during the year.
8. Confirming that there was suppression of sales value in six out of eight flats sold by the appellant.
Holding that the appellant understated the sales value of all the 12 flats.
10. Holding that the accounts of the appellant are not correct or complete and true profits of the project cannot be determined based on them.
Invoking provision of sec.145(3) and estimating income of the project of Joanna Villa applying best judgement.
Estimating the income of the project of Joanna Villa.
Applying the estimated and derived market rate for sale of flats in place of the actual consideration received by the appellant as declared and disclosed.
14. Adopting market rate of Rs.8,990/- per sq. ft. for estimating income from the project of Joanna Villa.
Determining and holding that there is understatement of sale value of the project of Joanna Villa to the extent of Rs.5,30,80,200/- 16. Each of the above ground is independent of the other.”
The assessee filed concise ground in place of all the grounds taken above in form 36 which is reproduced as under:-
“The Ld CIT(A) was not justified in enhancing the assessment and holding that there is an understatement of sale values in respect of Joanna Villa Project of an amount of Rs. 5,30,80,200/-. The Appellant challenges the said addition. The reasons given by the CIT(A) in this regard are incorrect , erroneous and based on conjectures and surmises.”
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd.
The assessee filed concise ground of appeal objecting the enhancement of assessment by Rs. 5,30,80,200/- on account of suppression of sales in respect of Joanna Villa project. The brief facts of the case are that the assessee was engaged in the business of property development and during the year it had two projects in hand namely, one at Pali, Dr. Ambedkar Road, Bandra, Mumbai and other Goanna Vila, 28th Road, Bandra (W), Mumbai. The assessee was following project completion method for accounting the income from these projects. The project at Pali was started in July 1997 and was said to be in progress since then but there was hardly any activity on the said project whereas Joanna Villa project which was started in financial year 2001-02 was completed during the year. The said project comprised of twelve flats. The assessee accounted for the income from Joanna Villa project during the current year on the basis of project completion method. The work-in-progress as on 31.03.2004 and 31.03.2005 were 6,05,31,118/- and 6,73,63,991/- respectively and gross sales were Rs 7,71,46,062/- thereby showing an income at Rs. 96,76,871/- and after setting off brought forward loss of Rs. 2,00,222/- , returned a total income of Rs. 94,76,650/-.
4. The AO during the course of assessment proceedings of the current year noticed that out of twelve flats constructed in the said project, eight flats were booked in the F.Y. 2003-04 and full sale considerations in respect of seven flats were received during the year. AO further observed on the basis of WIP at the year end vis-à-vis previous year that 89% of the project was completed at the end of the F.Y. 2003-04 and, therefore, came to conclusion that Goanna Villa project was completed in assessment year 2004-05 and not in assessment year 2005-06 as claimed by the assessee. The Ld. AO reopened the assessment proceedings for the A.Y. 2004-05 and framed the assessment by making various additions in that year on account of (A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. suppression of sales by the assessee and also completed the assessment of the current year on the protective basis by adding a sum of Rs. 15,000/- to the total income of the assessee.
5. Being aggrieved by the order of AO, assessee preferred appeals before CIT(A) for both assessment year i.e. 2004-05 and 2005-06. Ld. CIT(A) deleted the addition made by the AO in the assessment year 2004-05 and agreed with the contention of the assessee that the project was completed during the year and the income from the said project was rightly shown by the assessee in the current year as per the method of accounting regularly followed. However, the Ld. CIT(A) disagreed with the methodology of AO of working out suppression of sales and enhanced the assessment of current year by Rs. 5,30,80,200/- as shown in Table C by taking the fair market value in respect of all the twelve flats at the rate of Rs. 8,990/- per sq. ft. while deleting the addition of Rs. 15,000/- made by the AO on protective basis and thus enhanced the assessment on substantive basis.
6. The Ld. AR submitted before us that the addition made by CIT(A) is hypothetical and on estimated basis and the same is not sustainable in law. Ld. Counsel submitted that the Joanna Villa project was owned by Rose Margaret Dorothy Nazareth nee D’souza and Joseph Peter Francis D’souza (hereinafter referred to as original owners) and the said original owners of the property got the plans sanctioned from BMC vide order dated 31.03.2001 whereby the original owners were permitted to construct an additional floor comprising four flats bearing no. 201, 202, 203, & 204 and entered into four separate agreements for sale with Shri Ambalal Premji Patel, Harilal Sabji Patel, Kanji Dharamsi Patel HUF and Nanji Patel (hereinafter referred to as original purchasers) respectively, which were duly
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. registered in the office of Sub-Registrar of assurances, Bandra and the sale rate was agreed at 3,000 per sq. ft. The Ld. Counsel further submitted that it was also stipulated in the said agreements that in case some additional areas were constructed, the four original purchasers had the option to take more area at the same rate. However, the project did not come through and finally a Memorandum of intended agreement for development dated 14.07.2001 was entered into with the assessee by the said original owners under which the rights to develop the said property were transferred to the said assessee for a total consideration of 2.70 crores. As per the MOI, the assessee was to use the balance FSI if any and also to use additional FSI by purchasing the TDR from outside at its own cost and put up additional construction on the existing structure as described before. All the liabilities and the responsibility of the original owners qua the said property including their commitment and liabilities qua four ‘agreements to sell’ were also taken over by the assessee. The Ld. Counsel further submitted that MOI was approved by appropriate authority vide order dated 05.10.2001. Thereafter the assessee got the building plans amended and obtained sanction vide order dated 9.11.2001 to construct five additional floors in place of second floor above the old structure as got approved by the original owners. The Ld. Counsel argued that the CIT(A) has grossly erred in ignoring the fact that the assessee under MOI had undertaken to honour the commitment of original owners made to four persons with whom they had entered into agreements to sell. The counsel further submitted that the assessee entered into separate modificatory agreements for sale with four purchasers. Agreement with Harilal Sabji Patel was entered into on 24.07.2003 and with other three purchasers, namely, Shri Ambalal Premji Patel, Harilal Kanji Dharamsi Patel HUF and Nanji Patel were made 23.03.2004 whereby the assessee agreed to sell the area to these buyers at the rates committed by the original owners of the project and also agreed that additional areas as mentioned in the respective agreements would be (A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. sold at the rate of Rs. 6,000 per sq. ft. The Ld. Counsel submitted that the assessee accounted for sales on these flats as per consideration received from the purchasers at the agreed rate and the balance flats were sold at the rate ranging between Rs. 6,750 per sq. ft. to Rs. 7034.22 per sq. ft. and thus showing gross sale from the project at 7,71,46,062/-, however, the Ld. CIT(A) enhanced the sale by applying fair market rate of 8,990 per sq. ft to all the twelve flats and estimated the turnover at Rs. 13,02,26,260/- and thus made the addition of Rs. 5,30,80,200/- on account of suppressed sales on the hypothetical basis. The Ld. Counsel submitted that the fair market value on the basis of stamp duty valuation taken in terms of provisions of section 50C of the Act are not applicable to the assessee business as the said section applies in the case of transfer of capital assets for the purpose of calculation of capital gain and not in the case of the assessee who is dealing in stock in trade. The ld. counsel further brought to our notice that the section 43CA which is special provision for ascertaining the full value of consideration of an assets other than a capital assets is applicable w.e.f. assessment year 20104-15. Thus, the action of CIT(A) in applying the fair market value without any bringing material on records and invoking provisions of section 145(3) of the Act without pointing any defects in the books of accounts and estimating the sales value and consequential enhancement of assessment was not correct. He therefore prayed that the appeal of the assessee be allowed.
7. Ld. DR on the other hand, relied on the order of AO and that prayed that same be restored by setting aside the order of CIT(A).
We have considered the rival submission and perused the relevant material on record. After hearing the ld authorized representative and the departmental representative we find that Mrs. Rose Margaret Dorothy Nazareth nee D'Souza and (A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. Mr. Joseph Peter Francis D'Souza (hereinafter called, 'the original owners’) owned the property called 'Joanna Villa’ situated at 28th Road, off Turner Road, Bandra, Mumbai having a structure on the said property comprising ground floor and an upper floor. The original owners intended to develop the property by putting up additional construction above the existing structure on exterior columns on all sides without demolishing the existing structure. They got plan sanctioned by BMC vide order dt.21-03-2001 permitting them to construct an additional floor, i.e., 2nd Floor comprising 4 flats bearing nos.201, 202, 203 and 204 and renamed the existing building as the 'Joanna Apartments'. The original owners entered into 4 separate agreements for sale on 28-05-2001 with original buyers of the proposed 4 flats which were registered with the Sub-Registrar of Assurances, Bandra, in terms of which the 4 flats were proposed to be sold as under: TABLE -A Flat No. Purchaser Area (carpet) Rate Consideration (sq. ft.) (per sq.ft)
201 Ambalal 752.87 Rs.3,000 Rs.22,58,610 Premji Patel (500) 202 Harilal Shivaji 417.13 Rs. 3,000 Rs.12,51,390 Patel (600) 203 Kanji 447.75 Rs. 3,000 Rs.13,43,250 Dharamshi (600) Patel (HUF) 204 Bharat Nanji 701.12 Rs. 3,000 Rs.21,03,360 Patel (500)
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. Note: Figures in bracket represent entitlement to additional area constructed, if any, at the same rate of Rs.3, 000 per sq. ft. It was also agreed that in the event the owners putting up additional floors by utilizing the FSI if any available in the existing premises or by way of purchase of TDR from outside at any time in future, the purchasers shall have option to take flats on any of the higher floors without the purchasers being liable to pay to the owners any additional consideration and if there is any increase in area in the new construction the purchasers shall be liable to pay to the owner’s additional amount for the said increased area up to 600 sq.ft. or 500 sq.ft., as the case may be, at the same rate at which the owners agreed to sell the said flats.
We find that the project of 2nd floor was through and the original owners 9. entered into a Memorandum of Intended Agreement (MOl) for Development dt.14- 07-2001 with the appellant (called in the agreement as 'the Developer’) transferring the right to develop the said property to the appellant at total consideration of Rs.2.7 crores. In terms of the MOl the appellant was to utilize the balance FSI, if any, available on the said property and also to utilize additional FSI by purchasing TDR from outside at own cost and put up additional construction on the existing structure as described before. The appellant also took over all the responsibilities and the liabilities of the original owners including in respect of the 2nd floor agreements that the original owners had made with 4 original purchasers. This MOl was approved by the Appropriate Authority, Mumbai vide order dt.05-10- 2001. Pursuant thereto, the appellant got the building plans duly amended for construction of 5 additional floors in place of only 2nd floor above the existing structure and also obtained the commencement certificate vide order dt.09-11-2001.The owners entered into regular Agreement for Development on 21-12-2001, with the appellant and transferred the right to develop the said property for a total consideration of Rs.2.70 crores. It was (A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. stipulated that all the flats to be constructed in the said property shall belong to the appellant which shall be entitled to deal with or dispose them off in own ways and also entitled to receive and appropriate the sale proceeds thereof. The appellant, therefore, entered into separate Modificatory Agreements for Sale with the 4 original purchasers. The agreement with Shri Harila Savji Patel was entered on 24-07-2003 and with other three, namely Shri Ambalal Premji Patel, Kanji Dharamshi Patel and Bharat Nanji Patel, on 23-03-2004. In terms of the Modificatory Agreements all the four purchasers opted for change of accommodation and additional space in the new construction. Accordingly the following flats, additional space and the agreed rates were provided for in the modified agreements: TABLE-B Flat No. Purchaser Area (carpet) Rate Consideration (sq. ft.) (per sq.ft) 501 Harilal Shavji Patel Original space 417.13 Rs.3,000 Rs.12,51,390 Add: Additional 600 Rs.3,000 Rs.18,00,000 Space 343.87 Rs.6,000 Rs.20,63,220
Total 1361.00 Rs.50,51,390 502 Ambalal Premji Patel Original space 752.87 Rs.3,000 Rs,22,58,610 Add: Additional 562.13 Rs.3,000 Rs.16,86,390 Space
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd.
Total 1315 Rs.39,45,000 601 Kanji Dharamshi Patel Original space 447.75 Rs.3,000 Rs.13,43,250 Add: Additional 489.53 Rs.3,000 Rs.14,68,590 Space 473.23 Rs.6,000 Rs.11,35,800
Total 1410.50 Rs.39,47,640 602 Bharat Nanji Patel 701.12 Rs.3,000 Rs.21,03,360 Original space 146.65 Rs.3,000 Rs.04,39,950 Add: Additional 529.28* Rs.6,000 Rs.12,70,260 Space
Total 1377.05 Rs.38,13,570 *represents open terrace at 7th floor, value which was valued for only 40% of the terrace area (e.g., for Flat 601 terrace area of 473.23 sq. ft. , the same for valuation was taken at 40%, i.e., 189.30 sq.ft. X Rs. 6, 000 = Rs.11,35,800)
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd.
On completion of the project the appellant accounted for the sales of all the 12 flats constructed in the financial year 2004-05 and furnished the flat wise statement of sales which is summarized as under: TABLE-C Purchaser Date of Area Rate Consideration &Flat No agreement (sq.ft.) (Rs./sq.ft.) (Rs.) Jayesh Desai 18-02-2004 1338.43 6,759.00 90,34,402 201 SS Bagchi 13-04-2005 1315.00 7,224.33 95,00,000 202 Haresh Ballani 12-04-2004 1338.43 7,097.87 95,00,000 301 Mohan T 04-07-2004 1315.00 6,844.11 90,00,000 Bijlani 302 K. Joshi 11-03-2004 1338.43 6,762.40 90,51,000 401 Dinesh Jain 08-07-2004 1315.00 7034.22 92,50,000 402 Harilal Shavji Patel 501 28-05-2001 417.13 Rs.3,000.00 Rs.12,51,390 24-07-2003 600 Rs.3,000.00 Rs.18,00,000 24-07-2003 343.87 Rs.6,000.00 Rs.20,63,220
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. Total 1361.00 Rs.50,51,390 Ambalal Premji Patel 502 28-05-2001 752.87 Rs.3,000.00 28,58,610 23-03-2004 562.13 Rs.3,000.00 16,86,390
Total 1315 39,45,000 Kanji Dharamshi Patel 28-05-2001 447.75 Rs.3,000.00 Rs.13,43,250 601 23-03-2004 489.53 Rs.3,000.00 Rs.14,68,590 23-03-2004 189.30 Rs.6,000.00 Rs.11,35,800
Total 1126.58 Rs.39,47,640 Manish Kanji Patel 601 A 23-03-2004 505.64 6,000.00 30,33,840 Bharat Nanji Patel 602 28-05-2004 701.12 Rs.3,000.00 Rs.21,03,360 23-03-2004 146.65 Rs.3,000.00 Rs.04,39,950 23-03-2004 211.71 Rs.6,000.00 Rs.12,70,260
Total 1059.48 Rs.38,13,570 Dilip Nanji 29-10-2002 556.19 3,516.16 19,56,000 Patel 603
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. Total 7,71,46,062
11. The appellant credited Rs.7,71.46,062 to the P&L A/C as sales from the Joanna Property Project besides other income amounting to Rs.63,684. It debited Rs.6,73,63,996 towards expenses on building construction and Rs.80,717 as other expenses thereby declaring net profit at of Rs.97,65,033. It computed business income at Rs.96,76,871 and after setting off brought forward business loss of Rs.2,00,222 returned total income was Rs.94,76,650. However the AO assessed income from Joanna Villa Project on protective basis in the AY 2005-06. The appellant had another project on hand at Pali, Bandra which was in progress during the year. The AO observed that opening work in progress in respect of Pali Project had gone up from Rs.8,70,477/- to Rs.11,61,727/- at the end of the current year. He was of the view that a part of the other expenses debited to the P&L A/C related to the pending Pali Project. In the absence of project wise details, he ascribed a sum of Rs.15,000/- out of Rs.80,717 to the Pali Project and added to the income from Joanna Villa Project. After allowing set off of brought forward loss of Rs.2,00,222, the AO computed total income at Rs.94,91,650/- as against the retuned income of Rs.94,76,650/- .Thus the only addition made to the returned income of the current year was the sum of Rs.15,000. On appeal before CIT(A) the appellant contested this apart from challenging the validity of protective assessment of income from Joanna Villa Project. The AO in the reassessment proceedings framed the assessment order for the AY 2004-05 by adding of Rs.1,13,62,449/- and Rs.1,37,23,455/- in relation to the above project by computing a total sum of Rs.2,12,26,659 as the sales value of the four flats including the additional space and after adjusting Rs.1,13,62,449 accounted for by the appellant, the AO treated the difference of Rs.1,13,62,449 as suppressed sales value for these 4 flats. Regarding the remaining two flats for which there were (A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. no pre-existing agreements, the AO noted that they were allotted to its directors Manish K Patel (601A) and Dilip N Patel (603), respectively at rates below the market price. Noting that they admeasured 1916.15 sq. ft. and 856.19 sq. ft., respectively, the AO applying the rate of Rs.6,750 worked out total sales value of the two flats at Rs.1,87,13,295. After adjusting the sales of Rs.49,89,840 accounted for by the appellant, he added the difference of Rs.1,37,23,455 as suppressed sales value for these two flats. Thus the AO made total addition of Rs.2,50,85,904 (1,13,62,449 + 1,37,23,455) on account of suppressed sales. We note that the CIT(A) held that the AO was right in forming an opinion that that there was suppression of sales value but he was wrong in calculating the suppression only to 6 flats and not for all the 12 flats. In other words, the accounts of the appellant were not correct or complete and the true profits of the project could not be determined based on them. Accordingly, CIT(A) invoked the power given under section 145(3) and proceeded to estimate income from the project on the basis of best of my judgment by relying in case of CIT v. McMillan and Co 33 ITR 182 (SC) and CIT vs A. Krishnaswami Mudaliar 53 ITR 122 (SC) and Kachwala Gems vs.JCIT 288 ITR 10 (SC)] and estimated sale value as per Table C below and enhanced the asseassment by Rs. 5,30,80,200/- by holding that the market value of the flats sold by the appellant during the period from 30-10- 2002 and 29-03-2004 ranged between Rs.8,583.65 per sq. ft and Rs.8,992.56 per sq.ft. Admittedly, the project was completed on 01-04-2004. The project has to be valued on this date. The CIT(A) observed the market rate nearest to this date was Rs.8,992.56 per sq.ft. CIT(A) thereafter applied at the rate of Rs.8,990 per sq.ft. for estimating income from the project. The same is done below:
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. TABLE C Flat No. Area (sq.ft.) Sales Declared Sales assessed 201 1338.43 90,34,402 1,20,32,485 202 1315.00 95,00,000 1,18,21,850 301 1338.43 95,00,000 1,20,32,485 302 1315.00 90,00,000 1,18,21,850 401 1338.43 90,51,000 1,20,32,485 402 1315.00 92,50,000 1,18,21,850 501 1361.00 50,51,390 1,22,35,390 502 1315.00 39,45,000 1,18,21,850 601 1410.51 39,47,640 1,26,80,485 601A 505.64 30,33,840 0,45,45,700 602 1377.05 30,13,570 1,23,79,680 603 556.19 19,56,000 0,50,00,150 Total 7,71,46,062 13,02,26,260
12. On the basis of completion certificate in respect Joanna Villa Project, we are in agreement with the findings of the CIT(A) that the project was completed in the assessment year 2005-06 and the assessee had rightly accounted for its income on project completion method in the said year and not in AY 2004-05. But the order of CIT(A) enhancing the assessment by Rs. 5,30,80,200/- on the basis of fair market price of Rs. 8,990/-per sq.ft. on estimated basis when the actual sales deeds were on records, appears to be not correct and based on surmises and conjectures. The CIT(A) overlooked the fact that the assessee as per the terms of MOI dated 14.07.2001 took over the liabilities and commitments of the original owners towards the 4 original purchasers to whom the sale of flats were to be made at Rs. 3,000/- per Sq. fts as (A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. referred to in table A. The assessee was under contractual obligation to sell the flats to the original purchasers at the price agreed to by the original owners. Neither the AO nor the CIT(A) brought any materials on records to show that the assessee received more than what had been shown in the sale deeds. The Ld CIT(A) also failed to bring any cogent materials on records for enhancing the assessement. No defects were pointed out in the records maintained by the assessee and therefore the invoking the provisions of section 145(3) of the Act to estimate the income is wrong and the decisions relied on by the CIT(A) are not applicable to the assessee’s case as the guess work in estimation can only be made when there defects in the records maintained by the assessee and it is not possible to arrive at the correct income by the AO on the basis of the said records. Further ,we also find force in the arguments of the ld authorized representative that the provision of section 50C are not applicable for ascertaining the full value of consideration in respect of business assets i.e inventories as the said provisions deals with ascertaining the full value of consideration in case of capital assets for the purpose of capital gain. Further our attention was drawn to the newly inserted section 43CA of the act which deals with ascertaining the full value of consideration in case of assets other than capital assets but the said section is applicable w.e.f. 2014-15. After taking into accounts all the facts, arguments of both the parties and records before us, we are of the considered view that the order passed by the ld.CIT(A) suffered from several infirmities and cannot be sustained. We therefore delete the enhancement of assessment of Rs. 5,30,80,200/- by the CIT(A) by allowing the appeal of the assessee. The AO is directed accordingly.
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd. (Assessment Year 2004-05.) The grounds raised by the Revenue are as under:-
1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in deleting additions aggregating to Rs.3,19,18,777 ignoring the fact that the additions were made based on the finding that nearly 90% of the work in progress was completed during the relevant previous year and that the project of the assessee, who was engaged in civil construction, was completed during the relevant previous year and that the income had accrued to the assessee in A.Y. 2004-05 itself.
2. The appellant prays that the order of the CIT (A) be set aside on the grounds mentioned above and that of the Assessing Officer be restored.
13. The issue raised by the revenue is that since the 90% of the project was completed in the A.Y. 2004-05 and therefore the income of that project should be accounted in that year and not in the A.Y. 2005-06 as held by the CIT(A).We have already decided the issue involved in this appeal by holding that accepting the findings of the CIT(A) that the assessee had rightly shown its income in the AY 2005-06 on the basis of project completion method in respect Joanna Villa Project and in view of our decision in A.Y 2005-06 we dismiss the appeal filed by the revenue. The AO is directed accordingly.
In the result, the assessee’s appeal is allowed and revenue’s appeal is dismissed.
(A.Y.05-06 & 04-05) Swananda Properties Pvt. Ltd.
Order pronounced in the open court on 4th January, 2016