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Asstt. Commissioner of Income Tax- 18(2), Room No.115, 1st Floor, Piramal Chambers, Parel, Mumbai-400012 Vs. M/s Vijayraj Properties, 102 Aditi, Shivsena Bhavan Path, Dadar, West, Mumbai-400028.
August, 04th 2014
                      ,                                    ""  

                     AND B.R.BASKARAN (AM)
        , .  ,                               .. ,   

                     ./I.T.A. No.6529/Mum/2012
                   (   / Assessment Year : 2009-10)

 Asstt. Commissioner of Income        /         M/s Vijayraj Properties,
 Tax- 18(2),                          Vs.       102 Aditi,
 Room No.115, 1st Floor,                        Shivsena Bhavan Path,
 Piramal Chambers, Parel,                       Dadar, West,
 Mumbai-400012                                  Mumbai-400028.
        ( /Appellant)                  ..       (    / Respondent)

          . /   . /PAN/GIR No. : AADFV0536F

             / Appellant by                 :   Shri Parmindar Kaur
               /Respondent by :                 Shri K Shivram (Sr.Adv) and
                                                Ms.Neelam Jadhav

              / Date of Hearing
                                                    : 24.7.2014
             /Date of Pronouncement : 31.7.2014

                                   / O R D E R

Per B.R.BASKARAN, Accountant Member:

       The appeal filed by the revenue is directed against the order dated

16.08.2012 passed by Ld CIT(A)-29, Mumbai and it relates to the assessment

year 2009-10.

2.     The solitary issue urged by Revenue is whether the ld. CIT(A) was

justified in deleting the assessment of profit of Rs.36,81,701/- computed by

AO as the gain arising on sale of a flat.

3.    The facts relating thereto are stated in brief. The assessee is engaged in

property development business. The AO noticed that the assessee had 3 unsold
                                         2                   I.T.A. No.6529/Mum/2012

flats at the year end. The AO noticed that the assessee had entered into an

agreement on 27.04.2008 for sale of a flat Numbered as 503 for a consideration

of Rs.90.00 lakhs and has received a sum of Rs.51.00 lakhs by 31.3.2009. He

further noticed that the assessee had shown the same as unsold flat. Hence, the

AO took the view that the assessee cannot treat the same as unsold flat and

accordingly took the view that the profit arising on sale of the above said flat is

assessable in the current assessment year.          Before the AO, the assessee

submitted that the agreement was actually entered on 27.04.2009 and due to

typographical error, it was wrongly mentioned as 27.04.2008 in the agreement.

The AO did not accept the said contentions and hence proceeded to assess an

amount of Rs.36,81,701/- as the profit arising on sale of the flat cited above.

The Ld CIT(A), however, accepted the contentions of the assessee and

accordingly deleted the said addition.       Aggrieved, the revenue has filed this

appeal before us.

4.    We have heard the rival contentions and perused the record. We notice

that the assessee has received advance payment of Rs.51.00 lakhs, only during

February and March, 2009.      Referring to the dates of the receipt of advance

amounts referred above, the Ld A.R contended before us that the assessee could

not have visualized the receipt of above said amount on 27.04.2008, i.e., the

date noted in the agreement. Accordingly, the Ld A.R submitted that the Ld

CIT(A) was justified in accepting the explanation of the assessee that the

agreement was entered on 27.04.2009 and the said date was wrongly mentioned

due to typographical error.    We notice that the Ld CIT(A) has considered this

factual aspect and has further noted that the possession of flat was not given by
                                        3                  I.T.A. No.6529/Mum/2012

31.3.2009. Accordingly, he has directed the AO to delete the impugned addition.

For the sake of convenience, we extract below the relevant observations made

by Ld CIT(A):-

      "5.     I have carefully considered the facts of the case, arguments of the
      Assessing Officer and the written submissions of the Authorized
      Representative of the appellant. It can be seen that the sale proceeds of
      the flat cannot be taxed in AY.2009-10 for the following reasons:

             1.     The date of agreement is 27.4.2009 and not
             27.4.2008,      it is evident from agreement itself. If the
             agreement is on 27.4.2008, then payment made in March, 2009
             cannot find place in the agreement.

             2.     As regards the argument of the Assessing Officer that
             Rs.51,00,000/was received out of sale consideration of
             Rs.90,00,000/-, it can be seen that part advance of sale
             consideration received, does not make the sale complete. First of
             all nearly 45% of the consideration is yet to be received
             during the year. There is no registration and there is no
             possession given. Hence flat being an immovable property, sale of
             the assets is not yet complete.

             (3)     As per AS 9 revenue has to be recognized when there is no
             significant uncertainty regarding measurability and collectibility
             of the income. In this case part consideration is yet to be
             collected. And therefore there is significant uncertainty about

             (4)    The value disclosed in the closing stock is
             Rs.53,18,700/-. This amount itself is more than the advance
             amount. In other words the advance received does not even
             cover the cost of the asset. Hence there was no reason to offer it
             as a completed sale."

We further notice that the factual findings given by the Ld CIT(A) was not

controverted by the revenue by bringing any material on record. Under these

circumstances, we do not find any reason to interfere with his order.
                                            4                   I.T.A. No.6529/Mum/2012

8.        In the result, the appeal filed by the revenue is dismissed.

          The above order was pronounced in the open court on 31st July, 2014.

                31st July, 2014    

     Sd                                              sd

(.  /D. MANMOHAN)                               (..  ,/ B.R. BASKARAN)
             /VICE- PRESIDENT                  /ACCOUNTANT MEMBER

  Mumbai: 31st July,2014.

. ../ SRL , Sr. PS

        /Copy of the Order forwarded to :
1.  / The Appellant
2.  / The Respondent.
3.      () / The CIT(A)- concerned
4.       / CIT concerned
5.       ,     ,                   /
      DR, ITAT, Mumbai concerned
6.      / Guard file.
                                                                  / BY ORDER,
                True copy
                                                          (Asstt. Registrar)
                                           ,  /ITAT, Mumbai
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