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
IN THE INCOME TAX APPELLATE TRIBUNAL "F" BENCH, MUMBAI
BEFORE HON'BLE S/SHRI D. MANMOHAN , VICE-PRESIDENT
AND B.R.BASKARAN (AM)
, . , .. ,
( / 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,
( /Appellant) .. ( / Respondent)
. / . /PAN/GIR No. : AADFV0536F
/ Appellant by : Shri Parmindar Kaur
/Respondent by : Shri K Shivram (Sr.Adv) and
/ Date of Hearing
/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
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
(. /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,
, /ITAT, Mumbai