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TMI Blog2014 (7) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 88,35,349/- computed on the basis of average market value of the land. 4. Brief facts of the case is as follows:- The assessee company was incorporated on 05.09.2005 and is registered with the Registrar of Companies, Delhi and Haryana. The company is engaged in the business of development of real estate. Financial year 2005-06 was the first year of operation of the company and during the year, the company had purchased a number of pieces of land for Rs. 43,62,78,200/- for development as a part of pursuing its main object of business. All the transactions were duly declared by the company in its books of account under "Purchase Account" and accordingly have been reflected shown as "Stock-in-Trade" of business of the assessee. 5. During the relevant Assessment Year, the assessee company has exchanged 0.60 acres of land situated at Village Maidawas, Distt. Sohna, Gurgaon, which it had purchased recently, and in lieu thereof, it has received 1.17 acres of land in Village Behrampur, Gurgaon, from Vishnu Apartments Pvt. Ltd. For this transaction, proper exchange deed was executed on 13th day of January, 2006, in the presence of Sub-registrar, Gurgaon, and registered in his offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishnu Apartments Pvt. Ltd. could also not be independently verified as no response was received from them in response to Notice u/s 133(6)." 8. Thus, the Assessing Officer come to the conclusion that the assessee company had undervalued the receipt of 0.57 acres of extra land at Behrampur. He accordingly invoked provisions of section 69B and made an addition of Rs. 88,35,349/- to the total income of the assessee company towards amount of undisclosed investment for 0.57 acres of land at village Behrampur on the basis of "average" value of other parcels of lands purchased by the assessee company in village Behrampur. 9. Aggrieved by the said order of the Assessing Officer the assessee preferred an appeal before the ld CIT(A), who was pleased to allow the appeal preferred by the assessee and ordered deletion of addition made by the Assessing Officer. Being aggrieved with the decision of the ld CIT(A) the revenue is before us. 10. The ld DR contended that the assessee company had transferred 0.60 acres of land situated at Village Maidawas, Distt. Sohna, Gurgaon to M/s. Vishnu Apartments Pvt. Ltd and in lieu thereof it had received 1.17 acres of land in village Behrampur, Gurgaon; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in exchange from M/s Vishnu Apartments Pvt. Ltd. had less commercial value per acre due to the following factors:- a. The land at village Maidawas given by assessee is located around 15 kms from the Gurgaon Bus stand and the land it has received in exchange is located around 22 kms from Gurgaon Bus Stand. b. The land received in exchange in village Behrampur by the assessee is located at a distance of 4-5 kms. From Faridabad-Badshahpur-Sohna, 90 meter highway, and it lies inside the village Behrampur. Dur to this reason, it had lot of locational disadvantages as it lies inside the village and therefore has less commercial value. Therefore, excess 0.57 acre land has been given to arrive at the equivalent value. c. The land which the assessee has received in village Behrampur was not leveled and uniform land as it had lots of pits, trenches & ditches, whereas the land at Village Maidawas was uniform and well leveled. d. The land at village Maidawas given by the assessee company had commercial advantage due to its location, potential usages, proximity to public facilities, infrastructure etc. e. The parcels of land purchased by the assessee from other vendors in village Behramp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 1.17 acres of land has also been included in the inventory of the assessee as on 31.03.2006. The same value has been shown in the audited balance sheet as well as in the detailed schedule of inventory having the quantity wise and value wise details for this land of 1.17 acres also. The assessee company has valued its closing stock on the basis of cost or market value whichever is less. The method of valuation of closing stock employed by the assessee company in the previous year has been disclosed in the income-tax return at relevant point no. 8 of "other information" of "Part A" of the same. The same is disclosed in Schedule "I" pertaining to "significant Accounting Policies" of the audited Balance Sheet as well. We find that there was no basis for the Assessing Officer to hold that price for both the parcel of land could not be the same and he erred in presuming that the excess area of land would not have been given without any extra payment being made by the assessee to the other company i.e. M/s. Vishnu Apartment Pvt. Ltd. over and above the amount of Rs. 76,32,000/- which according to Assessing Officer is the estimated value of 0.60 acres of land at Maidawas. We find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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