2020 (1) TMI 698 - HC - Income Tax

Suppressed sale consideration - unit sold by the assessee at a lower rate than the other flats in the same building - CIT-A allowed the Appeal after considering the difference of sale transaction and holding that the sale was not under valued also upheld by Tribunal - HELD THAT - Both, the Commissioner of Income Tax (Appeals) and Tribunal, have assessed the facts on record. The finding of fact is that Unit No. 302 suffers structural and locational disadvantage from the units which were taken into consideration as comparable units. The Tribunal also took into consideration that the price for sale consideration for Unit No. 302 was higher than the ready reckoner prepared by the State of Maharashtra for the stamp duty valuation. There is thus a finding of fact rendered by two authorities concurrently. The issue being one of the fact after assessment of evidence and the approach of the authorities in assessing the evidence is not having been found perverse, the Appeal does not give any rise to any substantial question of law.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal regarding suppressed sale consideration for a unit sold at a lower rate compared to other units in the same building.

Analysis:
The appellant, Revenue, challenged the Income Tax Appellate Tribunal's order dated 12 August 2016 concerning the Assessment Year 2010-2011. The primary issue revolved around the addition of ?4.16 crore to the income of the assessee due to alleged suppressed sale consideration for a unit sold at a lower rate than other units in the same building. The appellant framed substantial questions of law questioning the Tribunal's deletion of the addition and its failure to uphold the addition based on previous judgments. The Respondent, an assessee firm engaged in real estate projects, claimed that the sale price discrepancy was justified, citing market value variations and design disadvantages for the unit in question.

The Assessing Officer rejected the assessee's justifications, asserting that the sale price discrepancy was significant and added ?4.16 crore as unaccounted income from the sale of the unit. The Commissioner of Income Tax (Appeals) allowed the assessee's appeal, concluding that the sale was not undervalued. Subsequently, the Tribunal upheld the Commissioner's decision, considering the structural and locational disadvantages of the unit in question compared to other units. The Tribunal also noted that the sale price exceeded the stamp duty valuation prepared by the State of Maharashtra.

Both the Commissioner of Income Tax (Appeals) and the Tribunal analyzed the facts and found that the unit in question had valid reasons for the lower sale price, including structural and locational disadvantages. The Tribunal's decision was based on factual assessments and not deemed as perverse. Consequently, no substantial question of law arose from the appeal, leading to its dismissal.