9911796707
TMI Blog2014 (2) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... thereby confirming the addition of Rs.1.70 crores made by AO. 1.2 The appellant submits that considering that facts and circumstances of the case and the law prevailing on the subject it can not be said that there is an understatement of the selling price and the stand taken by AO in this regard is incorrect, illegal and erroneous and the CIT(A) ought to have held as such. 1.3 The appellant submits that AO be directed to delete the addition so made by him and to recomputed its total income accordingly." 2. Briefly stated, the assessee is a builder and developer and has offered income at Rs.33,92,948/- on the basis of percentage completion method. In the year under consideration entire profit of the project was worked out and deferential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ways on real income and not notional or hypothetical income, but on actually earned income by the assessee. There is no iota of evidence of any sort with AO which suggests remotely that the assessee has earned more income from sale of flats than disclosed in sale agreement. Further, it was contended that the assessee follows percentage completion method, whereby profit was offered according to the percentage of work completed in the year and since project was not complete, no such addition can be made on account of difference of sale price. In support of the contention ld.AR has placed his reliance in the case of K.P. Varghese vs. ITO (131 ITR 597(SC); CIT vs. Shoorji Vallabhdas & Co.(1962) (46 ITR 144)(SC); Godhra Electricity Co. Ltd. vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment and has agreed to pay whatever price demanded by the assessee. In view of that, he concluded that difference in price as adopted by AO is correct. 5. Drawing our attention to the paper book and additional evidence placed on record in terms of Rule 18(4) of the ITAT Rules, the ld. Counsel submitted that Shri N.R. Murthy has a sentimental association to this apartment and so he was not inclined to accept the development proposal in the first instance. Therefore, the builder had to separately negotiate with Shri N.R. Murthy and accept his terms which included completion within one year and penal clauses if it gets delayed. In view of specific requirement/requisition, standard of quality and requirements which were demanded and agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR however, relief on the orders of AO and ld. CIT(A) to submit the facts. 7. We have considered the issue and examined the paper book placed on record and additional evidence. As seen from AO's order AO has arrived at the difference in price by his brief order which is as under :- "6. On perusal of various details filed, it is noticed that the firm has sold three identical flats at various rates the details of which are mentioned herein in the table below. The Authorised Representative was asked to explain why the same identical flats were sold at different rates and was also asked to show cause why the maximum rate at which the flat have been sold shall not be applied to the other two flats. The details of the said flats are as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a good reason to obtain a different and higher price. There was a a clear view from the apartment being higher in elevation all around. Not only that, as can be seen from the MOU and other documents placed on record, the agreement was entered much before the project has started and terms are such that there are stiff conditions on the builder for completion with penalty clauses. Therefore, it can be safely considered that price paid by Shri N.R. Murthy is special price, not only for the floor which he has selected but also for all the facilities provided to him. It was also submitted in the course of argument that this flat was kept for sentimental reasons and this apartment was hardly occupied by Shri N.R. Murthy even as of now. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence is admitted, Assessing Officer has to examine these, as they are not placed before Assessing Officer in the course of assessment proceedings. Further, assessee's contentions were also not examined as can be seen from the order of Assessing Officer which is very brief and cursory. In view of this, we are of the opinion that the addition can not be sustained on the basis of the reasoning taken by AO. Since the additional evidence was not placed before Assessing Officer, in the interest of justice, we set aside the order and restore the issue to the file of Assessing Officer to consider the above additional evidence and complete the assessment as per law and facts. We make it clear that it is for AO to establish that there is under state ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
