TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 495
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....Wing B of the project Meghsparsha. The assessee filed its return of income for the assessment year 2005-06 on 31-10-2005 declaring total income of Rs. 26,17,220/-. The Assessing Officer during the course of scrutiny assessment proceedings carried out investigation at the office premises of the assessee and found that the assessee had given the possession of flats to the purchasers in Wing A and C of the project Meghsparsha as well. The Assessing Officer held that Wing A and C of the project are also complete. Since, the assessee is following project completion method the profit/income from Wing A and C is taxable in assessment year 2005-06. Hence, the Assessing Officer made addition of the profits from sale of flats in Wing A and C of project Meghsparsha. The Assessing Officer applied GP ratio of 18.30% on the sale of flats and made addition of Rs. 1,07,48,442/-. 2.1 Aggrieved by the assessment order dated 31-12-2007, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) upheld the findings of Assessing Officer and rejected the appeal of the assessee. The assessee carried the matter in second appeal before the Tr....
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....e completion certificate from PMC in respect of project Meghsparsha was received from PMC on 17-03-2005 but the actual possession of the flats were given to the allottees after April, 2005. The water connection to the Wing A and C was released by concerned authority on 05-04-2005. It was only after the water connection was made available, the possession of flats was given to the purchasers. The ld. AR fairly admitted that in case of certain flats temporary possession was given to the allottees prior to 31-03-2005 so that they can carry out wood work, fixtures and fittings in the flats according to their requirements. It is on the basis of temporary possession that the Assessing Officer has assessed the income from sale of flats in Wing A and C in the assessment year 2005-06. The matter travelled up to the Tribunal. The Tribunal upheld the findings of authorities below in assessing the income from sale of flats in Wing A and C in assessment year 2005-06. However, the Tribunal restricted the addition to the profits from sale of 20 flats in respect of which the ld. AR has carried out investigation. The ld. AR referred to paras 8, 9 and 10 of the Tribunal order in ITA No. 206/PN/2011 d....
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....e income from sale of commercial area in assessment year 2009-10 and levied penalty. The matter travelled up to the Tribunal. The Tribunal deleted the penalty under similar circumstances. 4. Per contra Shri Hitendra Ninawe representing the Department vehemently defended the order of Commissioner of Income Tax (Appeals) in confirming the levy of penalty u/s. 271(1)(c) of the Act. The ld. DR submitted that in quantum appeal the Tribunal has upheld the findings of authorities below that the income from sale of flats in Wing A and C are subject to tax in the assessment year 2005-06. The ld. DR referred to the reply given by assessee in response to the notice given by PMC to stop the work at pages 13 to 19 of the paper book. The ld. DR contended that the assessee has admitted in the reply to notice that the construction of all the three buildings i.e. Building A, B and C is complete in all respect. The application for grant of completion certificate for Building B was submitted to the PMC on 28-01-2004 and for Building A and C the application was made for issuing completion certificate on 14-05-2004. The PMC had issued the completion certificate for Building B on 30-04-2004 and as per ....
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.... for assessment year 2006-07, whereas, the Revenue has included the income from sale of flats in assessment year 2005-06. Thus, the only dispute was the year of taxability of the profits/income from sale of flats in Wing A and C. The Tribunal upheld the findings of Assessing Officer in recognizing the income from flats in the assessment year 2005-06. A perusal of the documents on record show that the completion certificate in respect of Wing A and C was received by the assessee on 17-03-2005 i.e. in the period relevant to assessment year 2005-06. The assessee in communication to PMC dated 09-07-2004 had mentioned that application for issuance of completion certificate in respect of Building A and C was made on 14-05-2004. Further, the assessee had admitted the fact that some of the allottees were given temporary possession of the flats before 31-03-2005. All these facts clearly show that the flats in Building A and C were complete in every respect and were ready for possession before 31-03-2005. Ostensibly, the assessee has declared the income from sale of flats in the assessment year 2006-07 as formal possession of flats according to assessee were handed over to the allottees afte....
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....eally accrued to the assessee. In the instant case, the liability to pay by the other parties is crystallized in the AY 2010-2011 not in the AY 2009- 2010. But the CIT (A) insists the same would be taxable in the year under consideration. In our opinion, such additions, in principle, are unsustainable in law considering the said binding judgment. If some of the reasons, such additions are accepted by the assessee, the same will not attract penalty u/s 271(1)(c) of the Act as the said amount was already offered to tax by the assessee. In our opinion, there is neither concealment of income nor furnishing of any inaccurate particulars in such matters. The decisions relied upon by the Ld Counsel for the assessee includes the order of the Tribunal in the case of Siddhraj Developers Pvt Ltd (ITA No.185/Ahd/2008), dated 11.5.2010 (Ahd); Goutam Enterprise (ITA No.5847/Mum/2010) dated 10.12.2012 (Ahd); Jain Builders (Vasai) (41 CCH 031) (Mum) and Gurucharan Singh & Co (72 TTJ 774) (Chd). These are relevant for the proposition that no penalty shold be levied on a declared income irrespective of the year of disclosure. Therefore, we are of the opinion that this addition does not attract penal....