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TMI Blog2019 (9) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent had received amounts in excess of that shown in the agreements in respect of twelve flats which is not being accepted. The entire case of the Revenue is merely on suspicion. It is not the case of the Revenue that the Respondent made secret profits out of sale of the twelve flats. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2005-06 was assessed on protective basis. 6. In the order for assessment year 2004-05, the Assessing Officer found there was suppression of sales value in respect of six flats. Thus the Assessing Officer made an addition of ₹ 2,50,85,904/- because of suppressed sales value in respect of six flats while making the assessment for the assessment year 2004-05. 7. Being aggrieved by the assessment order for the assessment year 2005-06 the Respondent filed an appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. On appeal, the CIT(A) by order dated 22 November 2010 partly allowed assessee's appeal holding that the project was completed in the assessment year 2005-06 and not in the assessment year 2004-05. However, the CIT(A) rejected the Books of Account under Section 145(3) of the Act and completed the assessment on best judgment basis. Moreover, CIT(A) in his order held that there is an understatement of sales value in respect of all twelve flats as there was suppression of value in all the twelve flats of the project, as the market rate then was ₹ 8,992/- per sq.ft. for the Assessment Year 2005-06. Thus, the above rate of ₹ 8,992/- per sq. ft. was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o substantial question of law arises. Thus not entertained. Re. Question (b) 12. The Respondent- Assessee is a Developer. He is in the business of real estate development. The flats sold by the Respondent- assessee are stock-in-trade. The CIT(A) by his order passed the best judgment assessment and noted that the sale consideration of twelve flats in the project has been suppressed. According to him, the market rate nearest to that date is ₹ 8,992/- per sq.ft. and, thus, reassessed the sale of each of the twelve flats. This basis of the nearest market rate is not found in his order. Therefore, on this basis itself the assessment is bad. In any case, Mr. Sharma, the learned Counsel for the Revenue submits that the market rate is the stamp duty rate of registration. Therefore, the stamp duty rate is used as a means to consider proper sales value of transfer of the flats. At the relevant time i.e. for the assessment year 2005-06, the only provision for application of deemed value for consideration was found under Section 50C of the Act relating to capital assets. At the relevant time there was no provision in the Act for deeming the consideration received on sale of goods/asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act cannot be invoked to arrive at full consideration of sale of business asset. We see no reason not to adopt the views of the above two High Courts to the present facts." (emphasis supplied) Therefore, section 43CA cannot be made applicable to the facts of the present case. By the plain language of this provision it is not retrospective. Thus, there is no statutory provision based on which the stamp duty valuation could have been made a basis in the present case. 14. The Division Bench of this Court in the case of M/s. Zain Constructions v. The Income Tax Officer 67 ITR 11 has conclusively decided the issue as under: "8. In our opinion, the entire approach of the Assessing Officer is wholly incorrect. As is well known, Section 50C of the Act would enable the Revenue to bring to tax by way of deemed capital gain difference between the stamp valuation and the sale price of a capital asset. For obvious reasons, this provision would not apply in case of a builder for whom such immovable property is in nature of stock in trade and not capital asset. To overcome this difficulty, the legislature had inserted Section 43CA under Finance Act, 2013 w.e.f. 1.4.2014. This provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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