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TMI Blog2024 (11) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... 539 - ITAT MUMBAI] wherein also amendment made to Section 43CA is held to be retrospective in nature and the tolerance band of 10% was taken into consideration for allowing the appeal of the assessee on account of difference between the reported consideration and value arrived at by ld. DVO. We un-hesitantly delete the addition made by the ld. Assessing Officer. Accordingly, ground is allowed. - Shri Anikesh Banerjee, Judicial Member And Shri Girish Agrawal, Accountant Member For the Assessee : Shri Bharat Kumar, CA For the Revenue : Shri P.D. Chougule, Sr. DR ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: These two appeals filed by the assessee are against the order of Ld. CIT(A)-52, Mumbai, vide order no. ITBA/APL/S/250/2023- 24/1058772530(1) dated 14.12.2023, passed against the assessment orders by the ACIT, Central Circle-4(2), Mumbai, u/s. 143(3) of the Income-tax Act (hereinafter referred to as the Act ), dated 26.12.2018 and 16.12.2019 for Assessment Years 2016-17 and 2017-18 respectively. 2. Grounds taken by the assessee are reproduced as under: ITA No. 395/MUM/2024 1. On the facts and circumstances of the case in law, The Ld. CIT (A) has erred in confirming deemed income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee submitted that this issue is a recurrent issue in assessee's own case. Also, ld. CIT(A) in Haware Constructions Pvt. Ltd., one of the group companies of the assessee, for AY 2009-10 and 2011-12 (Appeal Nos.: CIT(A)-22/ACIT- 10(3)/IT-236/2013-14, AY 2009-10 and No. CIT(A)-22/DCIT-10(3)/IT- 72/2014-15, AY 2011-12) in a consolidated appellate order dated 01.02.2016 had deleted identical addition made, on the grounds that assessee's main business activity is that of a builder and that during the course of these activities, it develops real estate and sells completed units in the project, so developed. Therefore, these units are primarily business assets of the assessee for which no income under the head house property is assessable. 5.3. He further, submitted that this issue is no longer res integra since in assessee s own case, the Co-ordinate Bench of ITAT, Mumbai vide orders in ITA No.281/Mum/2018 for AY 2013-14 and ITA No.291/Mum/2018 for AY 2014-15, dated 08.05.2019, had allowed the appeal by the assessee relying on the view taken by the Hon'ble High Court of Bombay in the case of PCIT, Central-1 Vs. M/s Classique Associate Ltd. (ITA No.1216 of 2016, dtd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ALV of the aforesaid vacant properties held by the assessee as stock-in-trade of its business of real estate developer, was liable to be assessed under the head Income from house property . As the assessee failed to furnish the details as regards the Annual Rateable Value of the aforementioned properties, therefore, the A.O estimated the ALV of the said properties @ 8.5% of the aggregate cost of their construction and worked out the same at Rs. 7,43,420/- (i.e 8.5% of 87,46,129/-). Further, after allowing the statutory deduction under Sec. 24(b) @ 30% of the ALV of Rs. 7,43,420/-, the A.O brought the balance amount of Rs. 5,20,394/- to tax under the head Income from house property . 9. We have deliberated at length on the issue under consideration, in the backdrop of the observations of the lower authorities. We find that the Hon'ble High Court of Gujarat in the case of CIT Vs. Neha Builders (P) ltd. (2008) 296 ITR 661 (Guj), had observed that if the business of the assessee is to construct property and sell it or to construct and let out the same, then any income derived from the immovable properties held by it as its stock-in-trade cannot be assessed under the head Income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ats/shops is held by the assessee as stock-in-trade of its business, then it becomes part of its trading operations, and any income derived there from would be its business income and not Income from house property . On the basis of the aforesaid deliberations, the Tribunal while disposing off the aforesaid appeal had vacated the addition of the ALV that was made by the lower authorities in respect of the flats/shops which were held by the assessee before them as stock-in-trade of its business of a real estate developer. In fact, the Tribunal while concluding as hereinabove, had primarily relied on the view earlier taken by it in the case of another sister concern of the assessee viz. ACIT Vs. Haware Construction Pvt. ltd. [ITA No.3321/Mum/2018 3172/Mum/2016, dated 31.08.2018]. Apart there from, the Tribunal had also drawn support from the orders of the coordinate benches of the tribunal viz. (i) M/s Runwal Construction Vs. ACIT [ITA No. 5408/Mum/2016, dated 22.02.2018]; and (ii). Progressive Homes Vs. ACIT [ITA No.5082 /Mum/2016, dated 16.05.2018]. In the backdrop of the aforesaid facts, we are of the considered view that the issue involved in the present appeal is squarely covere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Description of property Sale consideration offered for taxation in Stamp Value Authorities in Rs. Difference to be taxed as deemed business income not disclosed in books of account 1. M/s J K Shipping Services 37,24,000 39,26,000 2,02,000/- (variation is less than 10% of DVO value) 8. Assessee pointed out that variation between the sale consideration offered for taxation and the valuation arrived at by ld. DVO is of Rs. 2,02,000/- which is less than 10% of value arrived at by ld. DVO and therefore no addition is warranted on this account. In this respect, ld. Sr. DR submitted that Finance Act, 2018 had amended provisions to Section 43CA whereby difference of allowance was increased from 5% to 10% in respect of difference between stamp duty value and the reported sale consideration which is effective from Assessment Year 2019-20 and therefore does not apply in the present case, which is for Assessment Year 2016-17. 9. Per contra, ld. AR asserted that this issue is no longer res integra since there is plethora of decisions wherein it has been held that amendment made to Section 43CA is retrospective in nature which is in consonance within the amendments made to the Section 50C of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the copy of the above decision at the bar. By relying on the above said decision, Ld. AR submitted that the chart disclosed in the order of the Ld.CIT(A) at Page No. 7 which Ld.CIT(A) has calculated the difference in terms of ITA NO.1932/MUM/2022 (A.Y: 2014-15) M/s. Ravi Developments percentage of the various flats for the sake of clarity it is reproduced below: - No Flat No. Project name Market Sale Price Difference Difference Value (1) (2) 3= (1-2) as % of (2) 1 1204 Gaurav Excellency 18,73,000 14,55,500 4,17,500 28.68 2 1204A Gaurav Excellency 29,24,000 22,72,000 6,52,000 28.70 3 1304 Gaurav Excellency 18,73,000 17,72,150 1,00,850 5.69 4 1304A Gaurav Excellency 29,24,000 27,74,850 1,49,150 5.37 5 1001 Gaurav Excellency 45,36,000 42,40,000 2,96,000 6.98 6 1202 Gaurav Excellency 20,42,500 17,46,290 2,96,210 16.96 7 1202 A Gaurav Excellency 26,43,000 22,64,710 3,78,290 16.70 8 1404 Gaurav Excellency 47,58,000 45,60,000 1,98,000 4.34 9 302 Gaurav Samruddhi 29,23,000 26,55,900 2,67,100 10.06 Ld. AR submitted that before us that Sl.No. 3, 4, 5, 8 9 are within the 10% range as per the amendment to provisions of section 43CA to that extent assessee should be given relief. 11. On the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Accordingly, the ld. AO is hereby directed to delete the addition of Rs. 4,42,460/- made by him in the assessment. Accordingly, the grounds raised by the assessee are allowed. 13. Respectfully following the above said decision, and in the above decision the amendment made to section 43CA is retrospective in nature. Accordingly, as per the proviso the percentage range up to 10% are outside the provisions of section 40CA of the Act . Accordingly, Sl.No. 3, 4 5 8 are outside the provisions of this section considering the fact the difference is less than 10%. In Sl.No. 9 for Flat No. 302 the difference is 10.06% which is near to the specified limit fixed at 10%, since the difference is very meager we direct the Assessing Officer to exclude Sl.No.9 also. Considering the above discussion, we are inclined to partly allow the ground raised by the assessee. 12. Considering the undisputed facts on record and the judicial precedents referred above, we un-hesitantly delete the addition of Rs. 8,93,000/- made by the ld. Assessing Officer. Accordingly, ground no.3 is allowed. 13. In the result, both the appeals of the assessee are allowed. Order is pronounced in the open court on 30 Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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