TaxTMI 
TaxTMI 
2010 (7) TMI 1037
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....ances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 24,46,000/- on account of suppression of sale value of flats to M/s. Raj Kiran Properties & Investments Pvt. Ltd. without appreciating the fact that the assessee had sold flats to M/s. Concord Shipping Ltd. and M/s. Rochem India Pvt. Ltd. at rates much higher than that charged to M/s. Raj Kiran Properties and Investments Pvt. Ltd. though the sale to this party was effected much later." 4. Facts of the case, in brief, are that the assessee is a partnership firm with two partners holding equal share. During the relevant period the assessee firm was engaged in the business of construction and sale of flats. In the course of its business activities the firm acquired an old building called "Mariam Villa" consisting of ground and two floors in 1986 which was occupied by old tenants. It is stated that the assessee decided to demolish the old structure and construct a new building to be called "Lavlesh Court". It agreed to pay compensation to the existing three tenants for vacating the premises and surrendering their tenancy by providing them alternate accommodation in the new building. The firm followe....
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....common knowledge and practice that those who pay at the initial stage get the property at a lower rate than those who make payment later and that too in instalments. Both the situations are not comparable. The fact that the assessee is not related to this party further strengthens the conclusion that the transaction is at arms length." 7. Aggrieved with such order of the CIT(A), the Revenue is in appeal before us. 8. We have perused the order of the Assessing Officer and considered the submissions made by the learned DR. We find from the assessment order that the Assessing Officer in page 2 at para 4 of his order has given a finding that properties sold to RPIPL as per agreement dated 13th December, 2000 are @ Rs. 3,143 per sq. ft. However, the assessee had sold the property in the same building to RIPL @ Rs. 4890 per sq. ft. as per agreement dated 11.9.1998 and to CSL @ Rs. 4890 as per agreement dated 11.9.1998. Similarly the booking rate in the case of RIPL is 8th July, 1995 and that of CSL is 29th June, 1998. Similarly, as per agreement dated 4.11.1998 the assessee has sold two flats to CSL @ Rs. 4429 per sq. ft. We, therefore, do not find any basis in the order of the CIT(A) ....
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....nsation for surrender of any tenancy rights and that on the contrary, the assessee firm had paid compensation for the alleged tenancy which was never established." 11. Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that two flats admeasuring 700 sq. ft. on 2nd floor have been allotted to Shri Vinay Bhasin, son of the partner of the assessee firm. According to the assessee Shri Vinay Bhasin was a tenant in the erstwhile 'Mariam Villa' and the flats on the second floor of the new building were allotted to him on account of surrender of tenancy rights. The Assessing Officer asked the assessee to establish the tenancy of Shri Vinay Bhasin by producing the evidences such as rent receipt issued by the erstwhile landlord, copy of ration card indicating proof of residence, electricity/ telephone bills, copy of the relevant correspondence with the authorities while getting the plan approved, copy of the agreement with tenants, etc. From the various bills furnished by the assessee, the Assessing Officer noted that no such agreement has been filed in respect of surrender of tenancy rights by Shri Vinay Bhasin except for a zero....
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....al to CIT(A), the learned CIT(A) has deleted the addition. In this connection, ITAT which is the final fact finding body has upheld CIT(A)'s order as Cadell Weaving Mills decision was upheld by the Supreme Court. The following observations of the ITAT were brought to the notice of the CIT(A): "It is a fact that the assessee was a tenant in a building known as 'Mariam Villa'. On the basis of an agreement, the assessee surrendered his tenancy rights in the said property and transferred the premises in a peaceful manner to the owner of the building. The surrender of the tenancy rights was compensated by allotment of flat which was valued by the assessing authority at Rs. 62.00 lacs." 13. On the basis of the arguments advanced by the assessee, the CIT(A) deleted the addition made by the Assessing Officer by holding as under: "4.3 In view of all the above facts and circumstances taken I hold that there cannot be any further dispute on this point. Since another AO had accepted the genuineness of the factum of tenancy rights and allotment of two flats for surrendering the tenancy rights and the ITAT in its order quoted above affirms the above position, the addition so made is not susta....