THE DCIT, CENTRAL CIRCLE-3, VADODARA vs. M/S. AARYA DEVELOPERS, VADODARA

ITA 973/AHD/2019Status: DisposedITAT Ahmedabad12 January 2024AY 2014-15Bench: SMT. ANNAPURNA GUPTA (Accountant Member), SHRI T.R. SENTHIL KUMAR (Judicial Member)12 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the deletion of additions made by the AO. It found that the AO's additions were based on an inspector's report without rejecting the assessee's books of accounts or obtaining a valuation report. The Tribunal relied on various High Court and Supreme Court judgments stating that additions cannot be made on mere suspicion or surmises without corroborative evidence.

What were the facts?

The assessee, a developer, sold flats and penthouses. The AO made additions to income based on an inspector's report suggesting higher sale prices than declared, treating the difference as unaccounted profit. The assessee contended that prices varied based on quality, facilities, and negotiation.

What were the issues?

Whether additions made by the AO based on an inspector's report, without corroborative evidence or rejection of books, are sustainable. Whether the onus was discharged by the Revenue to prove unaccounted income.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 133A,Section 131(1)

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Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

For Appellant: Shri Sudhendu Das, CIT. DR

Date of hearing : 22 -11-2023 Date of Pronouncement : 12 -01-2024

PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER:

This appeal is filed by the Revenue as against the common appellate order dated 20.03.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad (in short ‘CIT(A)’) arising out of the assessment order passed under Section 143(3) of the Income Tax Act, 1961, (hereinafter referred to as ‘the Act’) relevant to Assessment Year 2014-15. 2. Brief facts of the case is the assessee is a partnership firm engaged in the business of land development work and construction

2 ITA No. 973/Ahd/2019 (DCIT vs. M/s. Aarya Developers) A.Y. 2014-

The order continues below.

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