9911796707
TMI Blog2014 (3) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain of Rs.15,33,587. In course of the scrutiny assessment proceeding the Assessing Officer noted that the assessee along with three others has carried out real estate business by contributing their lands. He noted that out of total extent of land of 343 guntas assessee's share being 236.875 guntas which is equal to 69.06%, the share of the assessee in total sale proceeds received should be 69.06% and not 25% as shown by the assessee. Accordingly, the Assessing Officer passed the assessment order u/s 143(3) of the Act. However, the CIT exercising his powers u/s 263 of the Act set aside the assessment order and directed the Assessing Officer to redo the assessment after verifying the copies of the sale deeds and encumbrance certificates by verifying the correct rates registered therein and to bring it to tax. 4. In pursuance to the order passed u/s 263 of the Act, the Assessing Officer took up the assessment proceedings again. The Assessing Officer issued summons u/s 131 of the Act to the three persons with whom the assessee had joined together for selling the plotted lands. As noted by the Assessing Officer in the assessment order despite summons u/s 131 no one appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arasimha Reddy, M. Surrender Reddy and Ch. Pradeep Reddy had purchased vacant lands to the extent of 19 acres 3 guntas at Waddepally and obtained lay out sanction from KUDA for plotting them into 173 plots of varying sizes after set off for roads and open spaces as per KUDA norms for purpose of sale. It was submitted that the landed area in respect of 173 plots worked out to 49,999.62 sq. yards. So far as assessee's share in the aforesaid plotted area of 49,999.62 sq. yards is concerned, the assessee submitted that it had only 25% of the share of the plotted area and not 69.06% as held by the Assessing Officer. It was submitted by the assessee that, on its own the assessee had purchased 5 acres 01.5 guntas of land and 3 acres 21.5 guntas along with other three persons and the other three persons have individually bought 3 acres 21- 1/5 guntas each. Thus, the total land available for plotting was to the extent of 19 acres 3 guntas. However, only 17 acres 23 and 1/2 guntas have been utilised for plotting as 1 acre 20 guntas of land purchased by the assessee is a hill lock hence, could not be plotted. The proceedings of KUDA dated 21-2-2004 also show that the survey number 823 whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l sale consideration received for the impugned assessment year. He further held that the Assessing Officer was wrong in concluding that the entire sale of plots has taken place in the impugned assessment year. On the aforesaid basis, the CIT (A) deleted the addition of Rs.1,48,47,787/- with the following observation:- "5.8 The total sale consideration received on account of sale of plots was no doubt stands at Rs. 2,14,99,837/- being the average rate of Rs. 490/- per Sq. Yd. However, the question remains here is that whether the consideration was received in the single year as presumed by the A.O. As per the returns of income filed by the appellant, the following are the details of sales made in the relevant and respective asst. Years, on the basis of registration of plots:- SI. No. A.Y. No. of plots Area in sq. yards. 1 2005-06 52 15,289 2 2006-07 90 25,562 3 2007-08 26 7,400 4 2008-09 5 534 5 2009-10 - 269 6 2010-11 - 752 Total 173 49,806 Since, the appellant furnished the Return of Income incorporating the profits arisen from sale of plots in respective Asst. Years to the extent of his share, it appears, there is no ground for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rked out based on the assumption that total area contributed is 343 guntas and assessee's share shown at 236.875 guntas. Accordingly, there is no basis for allocating / determination of profit of Rs. 1,48,47,787/- to the share of the appellant out of the total sale consideration of Rs. 2,14,99,837/- as quantified by the A.O for the assessment year under reference. 5.11 Regarding the share of incomes offered by the other three partners/co-owners, the information brought on record indicate that they have filed their returns of income, incorporating their share of profits from the projects, and the copies of the returns of income filed indicate the acknowledgment of filing of returns on the back side of the ITR and proves the fact to the extent. Even otherwise, the non filing of returns of income by other partners/co-owners, will not make the assessee under reference liable for such incomes. The said information brought on the record absolves the appellant, from being responsible for others' share of incomes. The Assessing Officer is free to cause enquiries and come to the conclusion accordingly. Thus, based on the facts it is held that the basis adopted by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Ac.17.27 guntas or 707.05 guntas. From the aforesaid Ac.17.27 guntas after set off of area towards open space and roads, the balance area remaining for plotting is 49,999 sq. yards which is as per the KUDA approved lay out and there cannot be any dispute about this factual position. Hence, it becomes clear that the assessee's share in the total land as per the approved lay out of 17.10 acres is to the extent of 4.12 acres which is roughly 25% of the total extent of land as per the lay out. In aforesaid view of the matter, the finding of the Assessing Officer that assessee's share in the total land is 69.06% is contrary to the materials on record hence, cannot be accepted. That apart, the Assessing Officer is also unjustified in inferring that 173 plots were sold during the impugned assessment year. It is a fact on record that the assessee has filed returns of income disclosing sale of plots for the assessment years 2005-06 to 2008-09. Even the other co-owners have also filed their returns of income admitting income from sale of plots which is clearly proved from the return copies submitted in the paper book. On perusal of copies of sale deed and ECs as well as approval l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the impugned assessment year, a copy of which is at page-7 of the paper book, it can be seen that the assessee himself had shown short term capital gains of Rs.15,33,587.19. Even during the assessment proceedings as well as before the first appellate authority, the assessee has admitted that his share of income for the impugned assessment year is Rs.27,41,697 and after allowing development expenses of Rs.7,62,900 and cost of land etc., the net profit would work out to Rs.11,28,797/-. Therefore, it becomes clear that the sale consideration considered by the Assessing Officer at the hands of the assessee at Rs.1,48,47,787 also includes the amount admitted by the assessee in the return of income. Hence, profit to that extent has to be considered at the hands of the assessee for the impugned assessment year. Whereas the CIT (A) has deleted the entire sale consideration of Rs.1,48,47,787/- which also includes the amount declared by the assessee in the return of income. In the aforesaid circumstances, we direct the Assessing Officer to retain the income offered by the assessee from sale of plots in the return filed for the impugned assessment year and delete the rest of the addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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