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TMI Blog2014 (3) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee from sale of plots in the return filed for the assessment year and to delete the rest of the addition – Decided partly in favour of Assessee. - ITA No.324/Hyd/2013 - - - Dated:- 12-3-2014 - Shri B. Ramakotaiah And Sri Saktijit Dey,JJ. For the Appellant : Smt. K. Harita For the Respondent : Sri K. V. Chalamaiah ORDER Per Saktijit Dey, J. M:- This appeal filed by the department is directed against the order dated 6-11-2012 of CIT (A)-VI, Hyderabad pertaining to the assessment year 2006-07. 2. There is a delay of eleven days in filing the appeal. Upon considering the submission of the learned DR, we are satisfied that there was a reasonable cause for not filing the appeal in time. Therefore, we are inclined to condone the delay and admit the appeal for hearing on merits. Only issue in the appeal of the department is with regard to the action of the CIT (A) in deleting addition of Rs.1,48,47,787/- made by the Assessing Officer on estimating the profit on sale of plots. 3. Briefly stated the facts are, the assessee HUF filed its return of income for the asst. year under dispute on 15-3-2007 declaring income of Rs.15,40,320/- which included income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 900/- is also required to be deducted. 5. However, the Assessing Officer did not accept the contentions of the assessee. He observed that return of income of partners do not contain acknowledgement numbers. He also observed that though the assessee and its partners sold plotted land of 49,999.60 sq. yards during the relevant financial year but the assessee failed to produce the completed sale deeds so as to arrive at the correct value of sale consideration received by them. The Assessing Officer thereafter proceeded to compute the income of the assessee by applying the rate of Rs.430 per sq. yard to plotted land of 49,999.62 sq. yards to arrive at the total sale consideration of Rs.2,14,99,837 which was treated as receipts from business. The Assessing Officer further held that since out of total extent of land of 343 guntas assessee's share worked out to 236.875 guntas which comes to 69.06%, hence, assessee's share in the sale proceeds will also be 69.06% and not 25% as claimed by the assessee. Accordingly, the Assessing Officer worked out the assessee's share in sale proceeds at Rs.1,48,47,787/- and determined the total income at Rs.1,46,86,477/-. Being aggrieved of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the sale deeds, ECs, and the approval and sanction of KUDA. It was further contended by the assessee that the Assessing Officer was totally mistaken in taking the entire sale consideration in the impugned assessment year as all the 173 plots were not sold during the relevant financial year. It was submitted that whatever amount received for the plots sold was taken into consideration and admitted as income in the returns filed by the assessee for different assessment years. In support of such contention, the assessee also submitted the copies of returns filed for the assessment years 2005-06 to 2010-11. It was therefore contended by the assessee that during the impugned assessment year, the total plots sold was to the extent of 25,562 sq. yards against the total sale consideration of Rs.1,09,66,786/- at the average rate of Rs.430/- per sq. yard. On the aforesaid sale consideration, the assessee's share at 25% works out to Rs.27,41,697 and after deducting the development expenses, the net profit of the assessee for the impugned assessment year works out to Rs.11,28,797/-. The CIT (A) after considering the submissions of the assessee vis v vis the materials available on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06% of the lands contributed, so as to quantify his share of income at same ratio. In this context, it is observed that the A.O has adopted the incorrect figures/statistics as regard to the area of the land contributed and quantification of sale considerations, simultaneously. While adopting the plotted area at 343 guntas, which would be equivalent to 41.503 Sq. yds which is equivalent to 343 Guntas @ 121 Sq. Yds., for gunta, The A.O has taken the sale consideration at Rs. 2,14,99,837/-, calculated on 49,999 Sq. yds. Having taken the land at 343 guntas, the corresponding area of plots for sale would be much less than 49,999 Sq. yds which is in fact equivalent to 690 guntas i.e., 17 Ares 10 guntas, shown to be the total area of plotting. The total. area under development has been worked out as under: 1 V.Raji Reddy 5 Acres 1.5 Guntas 201.5 Guntas -- .--~ 2 M.Surender Reddy 3 Acres 21.5 Guntas 141.5 Guntas 3 Ch. Narsimha Reddy 3 Acres 21.5 Guntas 141.5 Guntas 4 Ch. Pradeep Reddy 3 Acres 21.5 Guntas 141.5 Guntas 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification of income 'Qt'-(he appellant at Rs. 1,48,47,787/- amounted to estimation without any basis and as such quantification as unaccounted income is not justified. Hence, the addition of Rs. 1,48,47,787/- is deleted. Being aggrieved of the aforesaid order of the CIT (A), the department is in appeal before us. 8. We have considered the submissions of the parties and perused the orders of the revenue authorities as well as the relevant materials placed on record. As would be apparent from the facts emanating from record and also the contentions of the parties, the only dispute is with regard to the assessee's share in t he plotted land as well as consequent sale consideration received on sale of those lands. As can be seen in the original assessment order passed u/s 143(3) of the Act, the Assessing Officer has also taken the view that the assessee's share in the land is to the extent of 69.06%. It is further evident from the order passed u/s 263 of the Act that in course of revision proceedings also, the assessee had categorically submitted that the assessee's share in the total lay out area of Ac.17.10 guntas approved by the KUDA is only to the exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch facts and materials on record which clearly indicate that the assessee's share on the plotted area is to the extent of 25%, the Assessing Officer's finding that the assessee will be taxed on 69.06% of the sale consideration is not acceptable. 10. So far as the contention of the department that the CIT (A) ought to have called for a remand report from the Assessing Officer is concerned, we are not convinced with the argument of the learned DR. As reiterated earlier, the learned AR has contended before us that in course of the appeal proceedings before the CIT (A) against the original assessment order, the CIT (A) had called for a remand report from the Assessing Officer. In course of remand proceedings, the assessee had produced all relevant documents before the Assessing Officer to substantiate its claim that assessee's share in the plotted land is only to the extent of 25%. The documents submitted before the Assessing Officer have been clearly mentioned in para 5.4 of the CIT (A)'s order. This contention of the learned AR remains uncontroverted by the department. In aforesaid view of the matter, it cannot be said that opportunity was not given to the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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