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TMI Blog2023 (3) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption and conjectures without bringing corroborative material documantary evidence on record to rebuttal of the submissions of the assessee appellant. Merely, estimating the income even without quoting a specific instance of circumstantial evidence, partly confirming the addition to meet the ends of justice in this case by restricting addition to 10% as against 20% of the total addition made by the AO in respect of sale of flats in respect of commercial space is held to be perverse to the fact on record. Neither the AO nor the Ld. CIT(A) have brought on record any direct evidence to prove that extra consideration has been received by the appellant over and above the consideration as per sale agreement. CIT(A) failed to rebut the contention of the Ld. AR on the issue of determination of value of sale consideration for the purpose of capital gains u/s 50C of the Act. Therefore, the addition made on the basis of presumption, assumption and conjecture would not be sustained under the law. We hold that the decision of the Ld. CIT(A) that the ends of justice would be made, if the addition in this case is restricted to 10% of the total addition made by the AO in respect of sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income tax, (Appeals)-5, Ludhiana passed order Under section 250(6) of the Income tax Act, 1961 merely on assumptions, presumptions, surmises and conjectures, without appreciating the factual, legal and statutory position of the Law and facts of the case. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming 10% of the total addition made by the Ld. AO in respect of sale of flats and the addition in respect of Commercial spaced has also been confirmed to 10% instead of 20% made by the ld. AO without citing any reason for the same. 3. The appellant craves leave to add, amend, alter or otherwise raise any other ground of appeal. 5. There was a short delay of 34 days, in filing these appeals before the Tribunal. Considering the bonafide reason and no objection by the Ld. DR, the short delay is condoned and appeals are admitted on merits. 6. There is sole issue challenged by the appellant regarding confirmation of 10 % of the addition made by AO in respect of the sale of Flats and 10 % as against the 20% disallowance by AO in respect of the commercial open space on presumption and assumptions on identical facts in all the three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tively and for Portion B C, the residential flats will be shared in the ratio of 30:70. As per the AO, vide reply dated 21.08.2017, the assessee furnished the details of the parties to whom the flats have been sold along with the photocopy of the sale deeds and tabulated the details, Tower-wise number of flats sold, total amount and the share of the assessee as per agreement, at Rs. 3,22,91,579/-. Similarly, the share in sale of the Palm Island and multiplex cinema hall was also mentioned at Rs. 53,25,600/-. As per the AO, the assessee was required to furnished and produced the papers regarding the land on which the flats were constructed, revenue records, books of accounts, method adopted for valuation of each flat sold/commercial area along with the valuation report and variation in super area sold tower-wise/flat-wise. The reply filed by the assessee is reproduced in the assessment order and the AO mentioned that from the reply, it was revealed that the payments have been received as per the agreement. It is also mentioned that the query raised with regard to the valuation of the properties/valuation report, the variation in the selling price and the books of accounts were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken to arrive at per square feet value on the sale of flats. The AO gave examples of the cases where different values for same area were shown. The AO then tabulated the details of tower-wise flats sold and by adopting the highest value per square feet shown by the assessee as per the sale deed, the difference in respect of assessee's share has been calculated at Rs. 24,83,082.36 for Tower-A, Rs. 53,01,131.43 for Tower-B, Rs. 87,30,779/- for Tower-C and Rs. 16,61,219/- for Tower-M. The different for Palm Island was calculated by the AO by taking the value @120% (20% increase over the value taken by the assessee) which appeared reasonable keeping in mind the prevailing rate in the same area and the difference was calculated at Rs. 10,65,380/-. Accordingly, the income of the assessee for the year was assessed at Rs. 6,42,74,781/- as against returned income of Rs. 4,50,33,190/- by making addition of the above amounts. The facts of the case, basis of addition by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that during the course of assessment, the appellant filed copies of sale agreements registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... got the valuation done at the time of sale from the registered/Approved Valuer who determined the total value of the commercial property at Rs. 2,01,87,500/- vide valuation report dated 21.04.2014. The AR submitted that in the present case, the sale consideration of the commercial property was much more than the value determined by the Registered Valuer for the purpose of Stamp Duty Act and the stamp duty had been paid on the sale consideration of Rs. 9,51,00,000/- and filed the copies of the sale deed along with the valuation report. The AR argued that the assessee has taken the sale consideration at a higher value than the price fixed as per the Stamp Duty Act and hence, the AO arbitrarily enhanced the sale consideration without any basis. There is some merit in the contention of the AR regarding the price of different flats and in the real life market situation, it is very uncommon that any two flats/properties, will have identical sale value even in the same location/locality/tower. It is more so in the case of the flats where the price depend upon the floor, size, facing of the flat, position of the lift/stairs and the surroundings and the location of the flats in the ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice for similar size flat at same floor and same locations/situations indicate that such things (i.e. the cash payment) were involved in this case. The evidence for higher price than the price shown by the assessee are the sale deeds of the flats of the assessee sold at higher rate in the same tower which are good evidence for comparing the rates of different flats sold by the assessee since all the flats are located in the same project having similar type of external facility like electricity, security, lift and other facility etc. The AR made reference to the provisions of section 50C and here it is relevant to mention that as per the provision of section 50C, if the assessee shows less value than the stamp duty valuation, then the sale consideration/value has to be taken as per stamp duty valuation but there is no restriction on adopting a higher value than the stamp duty valuation. The AO has also referred to the clause in the agreement as per which, it was revealed that income derived from the facilities like electricity, water, lifts, and escalators, open spaces, parking places, space for advertisement and holding including any other vacant space in the Commercial Comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He pleaded that such estimated additions may be deleted. 9. Per contra, the Ld DR although supported the impugned order, however, he has not filed any rebuttal to the contention raised by the counsel. 10. Heard rival contentions, perused the material on record, impugned order, written submissions and case law cited before us. Admittedly, the sale deeds were supported by valuation report of the Registered Valuer for the purpose of Stamp Duty Act. The AR argued that the AO failed to bring on record any evidence to prove that any extra consideration is received by the appellant over and above the agreement amount in support of adopting the rate of finished flat for unfinished flats also and thus, he made huge addition in sale consideration purely on surmises and conjectures. The AR further argued that there is no provision in the Act permitting the AO to enhance the sale consideration except u/s 50C of the Income Tax Act, 1961 which provides that where the consideration declared is less than the value adopted or assessed by any authority of the state for stamp valuation for the purpose of stamp duty, then the valuation so adopted or assessed shall be deemed to be the full value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebut the contention of the Ld. AR on the issue of determination of value of sale consideration for the purpose of capital gains u/s 50C of the Act. Therefore, the addition made on the basis of presumption, assumption and conjecture would not be sustained under the law. 14. In view of the above discussion we hold that the decision of the Ld. CIT(A) that the ends of justice would be made, if the addition in this case is restricted to 10% of the total addition made by the AO in respect of sale of flats and the addition in respect of commercial space is also restricted to 10% instead of 20% made by the AO is infirm and perverse to the facts on record and against the law. Accordingly, the estimated addition of Rs. 18,17,621/- in respect of flats, and Rs. 5,32,690/- respect of commercial space of Palm Island, (18,17,621/- + 5,32,690/- = 23,50,311/-) is deleted. 15. in view of identical facts, our observation and findings given in I.T.A. No.34/ASR/2022 in respect of the Assessment Year 1015-16 shall apply to the appeals in ITA No. 35 and 36/Asr/2022 in respect of Assessment Year 2016-17 and 2017-18 in mutatis mutandis . 16. In the result, the subject appeals of the assessee ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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