TMI Blog2014 (8) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses claimed are the development expenses which were already shown in the books of accounts of M/s Maheshwari Builders, naturally as in those years the projects were accounted for in its books - Only real income has to be taxed – Relying upon Smt. Jashvidyaben C. Mehta Versus Commissioner Of Income-Tax [1987 (9) TMI 18 - GUJARAT High Court] - CIT(A) has rightly noted that the discrepancies noted by the AO were never confronted to the assessee and therefore he did not get an opportunity to controvert them - total profit of the scheme has been declared by the assessee in earlier years and in AY 09-10 - Revenue has not brought any material to controvert the findings of CIT(A) – the order of the CIT(A) is upheld – Decided against Revenue. - ITA No. 2727/Ahd/2012 - - - Dated:- 8-8-2014 - Sri G. C. Gupta And Shri Anil Chaturvedi,JJ. For the Petitioner : Smt . Sonia Kumar, Sr.D.R. For the Respondent : Sri S.N. Devetia, A.R. ORDER Per : Anil Chaturvedi, Accountant Member:- This appeal is filed by the Revenue against the order of Ld. CIT(A), Gandhinagar, Ahmedabad dated 03-09-2012 for A.Y. 2009-10. 2. The facts as culled out from the material on record are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant as to where the sale of immovable property which was done on 16/7/2008 for an amount of 76,00,000/- has been reflected in the return. In the return, the profit from the sale of this land (Survey No. 174, Kudasan) of 69,095/- has been shown. The appellant stated that this land was earlier reflected in its books of accounts in the name of proprietary concern M/s. Maheshwari Builders and the land was agricultural land waiting NA Clearance from the relevant authorities and the booking of most of the plots had already been done and profits reflected in the returns for earlier years, and in the books maintained for M/s. Maheshwari Builders. It was claimed that as NA clearance could not be obtained; the allottees became aggrieved and restless and pursued the matter with the assessee. It was decided that within 6 months from 26/2/2008 all the formalities of NA clearance would be obtained, if possible and sale deeds executed failing which the allottees would receive 2 1/2 times the payment made by them for the booking. It has been claimed that to ensure the sincerity and to build confidence; immediately, some cash payments were given to the allottees and post dated cheques of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onversion of the land, a project of plotting scheme was conceived and the land at cost was shown transferred, as book entry only to M/s. Maheshwari Builders. It has to be understood that the latter is also sole of the appellant and transactions shown between and such proprietorship have got no recognition in taxation and real income sense and only enable keeping of separate accounts for the project. Subsequently, the booking of plots was started and all the allottees knew that NA permission is pending. Once receipts were issued against the booking; the appellant's rights to the allotted land were substantially transferred. It has to be understood that once the revenue from the allotment of these plots is recognized in the books as was done by the appellant; the ownership of the plot against which the sales was recognized had to be shown transferred. This explains the consequent reduction in the stock of land in the books and only the unallotted portion naturally remained in the balance sheet. This is the amount ₹ 2,93,498/- which the AO and the Addl. CIT are referring to. I do not find any logic as to how it can be taken adversely against the appellant. Subsequently, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me has been undoubtedly declared by the appellant in the earlier years and in the assessment year 2009-10. The income from final sale of land less all costs has accrued to the appellant when the sale deed has finalized and accounts with allottees settled. Therefore, it has correctly been offered in AY 2009-10 and not in AY 2008-09 when the agreements allowing possible sales, in case NA was actually not received were entered. The fact that payments had started to some of the allottees in earlier years does not mean that the profits from sale where no sale deed has been finally signed had accrued. When the receipts of the total transactions i.e. final sale proceeds and earlier allotment money received (for accounting in above calculation by reducing the expenses) are accounted for and not proved wrong (by proving or even alleging under hand dealings) and only real expenses are claimed for working the entire working; I find no infirmity in the income offered by the appellant. The expenses claimed are the development expenses which were already shown in the books of accounts of M/s Maheshwari Builders, naturally as in those years the projects were accounted for in its books. Only real ..... X X X X Extracts X X X X X X X X Extracts X X X X
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