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TMI Blog2024 (9) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. Addition made u/s. 43CA - AO observed that the sales of 136 flats in the complex were made at rates below the circle rate and, therefore, the difference between the actual sale consideration and the circle rate had to be brought to tax as unaccounted income of the Assessee - HELD THAT:- We observe that the circle rate for the project of the assessee was not available at the time of completion of the assessment order and it was made available only during the appellate proceedings. The same was submitted before ld CIT(A) and ld CIT(A) having co terminus power, could have remitted the issue back to AO for verification or he can take call to complete the assessment by himself. He chose to complete the same after due verification. No reason to remit the issue once again back to the file of AO, since the ld CIT(A) has remitted the issue back to AO for giving effect after due verification of the facts on record. AO may verify the information submitted by the assessee and pass the relevant order on giving effect to the order of ld CIT(A).There is no need to remit this issue once again to the AO. Accordingly, the grounds raised by the revenue are dismissed. Addition u/s 68 on non provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing common for a decision in the appeal are that the assessee company is engaged in the business of real estate development. During the year under consideration, it was continued to run the construction project in collaboration with M/s Gopal Das Estates and Housing P. Ltd. and M/s Ardee Mechanical Industries Delhi P. Ltd. The project for development is located in Ardee City at Gurugram. All the parties, namely, M/s Gopal Das Estates and Housing P. Ltd. and M/s Ardee Mechanical Industries Delhi P. Ltd. had pooled their land for the purpose with the understanding that the profit sharing ratio would be as under:- i. M/s Gopal Das Estates and Housing P. Ltd. 84.32% ii. M/s Ardee Mechanical Industries Delhi P. Ltd. 7.89% iii. M/s Ardee Infrastructure P. Ltd. 7.79% 4. In the pursuit of above collaboration, the assessee entered into a Secondary Agreement on 17.05.2006 with M/s R.D. Varma Co. P. Ltd. for the construction of flats known as Palm Grove Heights in Gurugram. As per this Secondary Agreement, 85% of the sales proceeds were earmarked for the developer and the remaining 15% was to be shared by the assessee with M/s Gopal Das Estates and Housing P. Ltd. and M/s Ardee Mechanical Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me per acre rate of land under development. In its reply the assessee has stated that it has received a sum of Rs,4, 35,75,250/- from various flat buyers and out of this amount of Rs. 2,55,36,111/- has been paid to HUDA and balance amount of Rs. 1,80,39,139/- has been booked as expenditure. A glance at the table of work in progress would show that this amount of Rs. 1,80,39,139/- has not lead to any increase in the value of WIP and on the contrary the value of WIP as on 01.04.2016 at Rs. 85,58,9 1,624/- has been brought down to Rs. 81,78,52,485/-. Thus the Unpaid receipt of Rs. 1,80, 39, 139/- instead of being shown as revenue in the profit and loss account has been reduced from the value of WIP. As stated above this is against the established accounting consequence as well as provisions of the income fax law. Therefore the amount of Rs. 1,80,39, 139/- is added to the turnover and returned income of the year. I am satisfied that assessee has misreported its income and therefore penalty proceedings u/s 270A of the Income Tax Act are hereby initiated for under-reporting of income which is in consequence of misreporting thereof. (Addition: Rs. 1,80,39,139/-) 6. Aggrieved with the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al estate and joint owner of the project sharing the profit at the ratio of 85:15. He submitted that the assessee has collected EDC as per the agreement from the flat owners and charged directly to the WIP account without routing thru the profit and loss account. He submitted and relied on the orders of AO and also relied on the decision of Vipul Ltd, (2022) 197 ITD 556 and Greater Mohali Area Development Authority (P H) (2018) 93 taxmann.com 441. He submitted that in the above cases, similar issue of EDC was decided in favour of the revenue. 10. On the other hand, ld AR submitted that having been done after a rational and pragmatic consideration of the facts of the case, ld. CIT (A) order on this issue qualifies conformation by the Hon'ble Tribunal. He objected to the submissions of the ld DR and submitted that during the hearing the Ld. CIT-DR has relied upon the ratio of the decision of the Punjab Haryana High Court in Greater Mohali Area Development Authority vs. DCIT (2018) 93 Taxmann.com 441 (P H) to support the stance of the AO. That case as cited is totally distinguishable, in as much as, the project in question in that case was not ongoing at the relevant time but had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no profit element. Therefore, it cannot be form part of Profit and loss Account. Therefore, the findings of ld CIT(A) are just and proper. Therefore, the case law relied by the ld DR also distinguishable. Hence, the grounds raised by the revenue are dismissed. 13. With regard to the second ground as raised in this appeal is with reference to the deletion of the addition made u/s. 43CA of the Act in a sum of Rs. 6,29,30,146/-, the relevant facts are, AO observed that the sales of 136 flats in the complex were made at rates below the circle rate and, therefore, the difference between the actual sale consideration and the circle rate in a sum of Rs. 6,29,30,146/- had to be brought to tax as unaccounted income of the Assessee. The findings and observations of the AO in this regard are at pages 6 to 16 of the assessment order in para 5.2 therein. The circle rate chart was not readily available during the course of assessment proceedings with the assessee and the assessment which were to get time barred on 31.12.2019. The assessment was completed with the available information. Since, this could be obtained only subsequently. The same was submitted before ld CIT(A), when those rates w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was remitted to the AO for verification and orders. No error in that direction of the NFAC being perceptible the order as passed in this behalf by NFAC merits to be confirmed. The Ld. CT-DR had however argued that this issue ought to be verified by the AO. It is submitted that since the NFAC had remitted the matter to the AO for the correct determination of the addition and that the AO verified the fact while granting appeal effect the issue on merits to be given a quietus. 19. Considered the rival submissions and material placed on record. We observe that the circle rate for the project of the assessee was not available at the time of completion of the assessment order and it was made available only during the appellate proceedings. The same was submitted before ld CIT(A) and ld CIT(A) having co terminus power, could have remitted the issue back to AO for verification or he can take call to complete the assessment by himself. He chose to complete the same after due verification. After considering the facts on record, we do not see any reason to remit the issue once again back to the file of AO, since the ld CIT(A) has remitted the issue back to AO for giving effect after due verif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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