TaxTMI 
TaxTMI 
2014 (8) TMI 795
X X X X Extracts X X X X
X X X X Extracts X X X X
....eal before us and has raised the following effective ground: "The Ld. CIT(A) has erred in law and on facts in deleting the addition made by the AO on account of sale consideration treated as undisputed income of Rs. 75,30,905/-" 4. On the basis of AIR information received by the AO, it was noted by AO that assessee had sold immovable properly on 16.7.2008 for Rs. 76 lac but had shown profit from sale of land to be only Rs. 69,095/-. The assessee was asked to furnish the details and explain the transaction. Assessee interalia submitted that the land was an agricultural land awaiting NA clearance and it was, earlier reflected in the books of Maheshwari Builders, his proprietary concern. Assessee had got the bookings of the plots and the profits were already reflected in earlier years. Assessee has promised to get the NA of land done and sale deed executed. Since NA clearance could not be obtained and sale deed could not be executed, assessee paid 2.5 times the booking amount to the allottees. The submissions of the assessee was not found acceptable to the AO. He accordingly considered the amount received by the assessee and after giving credit of the profit shown by the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Rs. 69,095/- i.e, Rs. 75,30,905/- has been added to the total income as undisclosed income. The appellant has produced the following evidences amongst others to support its explanation: > Copy of agreements with all the allottees. > Details of payments to all of them > Proof of payments through cheques > Proof that the transactions with respect to the same plot were shown in earlier years in his own case but in the name of proprietary concern M/s. Maheshwari Builders. Having considered the objections of the AO to the explanation of the assessee both in the assessment order and in the remand report; the following pertinent observations are required to be made, regarding them: Objections of the AO on the facts of the transactions:- The basic objections of the AO are (a) the audit report shows the profit directly without showing the complete transactions (Addl, CIT in his letter endorsing the remand report) (b) only Rs. 2,93,498/- appeared in the balance sheet as the value of land-asset as on 31/3/2008 (para. 4.5 (i) of the asstt. order) (c) the entire transactions as claimed before FY 2007-08 are not appearing in the books of account of M/s. Hasmukhbhai K. Pate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions shown between individual and such proprietorship have got no recognition in taxation and no effect can be there on real income, whatsoever. The AO has failed to appreciate the transactions as recorded in the two capacities by not taking them together. Naturally, on the subsequent transactions are found recorded in the individual capacity. The objection of the AO regarding the non-saleability of the land without NA is neither relevant to the issue nor it is against the prevalent business practice. Such schemes where the facts are known to the allottees are much prevalent and it cannot be the case that once the plots are allotted the income should not be shown. The appellant correctly showed the income in the earlier years recognizing the revenue from such transfer of rights. Now, once the appellant was cornered, it bought back the rights of the land by paying 2 1/2 times the amounts received (not the consideration agreed originally) for booking. Then only it can sell the property which was existing in his name in the revenue record. It cannot be said that the cost to reacquire the rights would not be allowed and only the entire sale proceeds would be taxed. It is a well accept....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndloom Development Corpn. 266 ITR 647 and Hon'ble Kerala High Court in the case of Federal Bank Ltd 301 ITR 188 have decided the issue on these principles. It is therefore held that no addition at all called for on the facts of the case. The addition made by the AO is directed to be deleted. The grounds of appeal are allowed." 5. Thus aggrieved by the order of Ld. CIT(A), Revenue is now in appeal before us. Before us, Ld DR took us through the findings of AO and supported his order. On the other hand, Ld AR reiterated the submissions made before CIT(A) and supported his order. 6. We have heard the rival submissions and perused the material on record. We find that Ld CIT(A) at para 5.2 has noted that the alleged discrepancies noted by the AO were never confronted to the assessee and therefore he did not get an opportunity to controvert them. Ld. ClT(A) after considering the submissions and the evidences placed before him has in teralia overruled the various objections of the AO. He has also noted that total profit of the scheme has been declared by the assessee in earlier years and in AY 09-10. He has by a detailed and reasoned order directed the deletion of addition made ....