TMI Blog2015 (4) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... s not tenable in law. - Decided against revenue. Unaccounted sales proceeds received in cash - CIT(A) deleted the addition holding neither the A.O. was justified in adopting the sales consideration on the basis of circle rate prescribed for charging of stamp duty nor was he justified in considering the taxability of transactions relating to office / residential flats against which only advances had been received during the year and actual sale had not been made - Held that:- CIT(Appeals) has given a finding that the value adopted for the purpose of charging the stamp duty cannot be taken into consideration for assessing the business income in relation to the area sold by the assessee and therefore the A.O. was not justified in adopting the circle rate for the purpose of estimating the income. Even before us, the Revenue has not been able to bring any such material on record on the basis of which it could be said that the assessee has actually received any amount of sales proceeds over and above the amount declared by it in the registered sale deeds and its books of accounts and therefore we do not find any infirmity in the order of the learned CIT(Appeals) in deleting the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen possession is handed over and the sale deed of the flat sold is registered. The balance amount spent on construction is shown as stock in trade of the assessee. The assessee has been following the same method of accounting of income consistently and the same has been accepted in all the preceeding and succeeding years. During the instant year the assessee has recognised revenue on account of sales of real estate at ₹ 1,26,44,200/- against total area sold of 7987.11 sq. ft. The Assessing Officer however, was not satisfied with the actual sale rate declared by the assessee in the registered sale deeds and found that the value adopted by the stamp valuation authority was higher and accordingly he made a reference to the Departmental Valuation Officer during the course of assessment proceedings. The report of the D.V.O. was not received till the conclusion of assessment proceedings and accordingly the Assessing Officer adopted the circle rate fixed for stamp duty purposes and adopted the same as the actual sale price of the entire area sold and on this account made an addition of ₹ 1,46,25,071/- as undisclosed sales received by the assessee in cash outside the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration on the basis of circle rate prescribed for charging of stamp duty nor was he justified in considering the taxability of transactions relating to office / residential flats against which only advances had been received during the year and actual sale had not been made. 4. Against the above order of the CIT (Appeals) the Revenue is in appeal before us. 5. In support of the ground, the Learned CIT(DR) has basically placed reliance on the assessment order, discussed above. He contended before us that the learned CIT (Appeals) has erred in deleting the addition of ₹ 1,46,25,071/- on the ground that the provisions of section 50C of the Act are not applicable in the case of the assessee who is in the business of building and selling of property. It was the contention of the learned D.R. that the Assessing Officer has rightly made the addition of ₹ 1,46,25,071/- as it was not imaginary but based on the relevant circle rate for stamp duty purposes fixed by the Government and that the sale rates declared by the assessee in the registered sale deed were found to be on a much lower side even though stamp duty was paid according to the circle rate. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictional Delhi High Court in the case of CIT vs. Manish Buildwell Private Ltd. in ITA No. 928/2911 dated 15.11.2011 to contend that there was no justification on the part of the A.O. to adopt the percentage completion method for one year (the year under appeal) on selective basis when the method of accounting of income on the basis of handing over of possession and registered sale deed stood accepted in the case of the assessee in all the earlier and succeeding years. He further relied on the order of Delhi ITAT in the case of Malibu Estates Private Ltd. (ITA No. 4085/Del/2009) as also the judgement of Hon ble Delhi High Court in the case of Siddhartha Trade Links Private Ltd. reported in 206 Taxman 92 in support of his contention. The learned A.R. further argued that there was no material on record to prove that the assessee had received any sales consideration over and above the amount declared by the assessee in the registered sale deeds and that the learned CIT(Appeals) was fully justified in deleting the addition made by the Assessing Officer to the sales proceeds without discharging the onus that lay upon him to prove that any amount over and above the declared amount wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in the year when the possession is given and the registered sale deeds are executed. This method of accounting of income stands accepted in the hands of the assessee u/s 143(3) in the earlier as well as succeeding years. On these facts the A.O. is not justified in adopting the percentage completion method for one year (the year under appeal) only on selective basis. Infact this will distort computation of the true profits and gains of the business. Further same income will be assessed again in the hands of the assessee in the year when sales have been declared in the subsequent years and assessments have been framed u/s 143(3) of the Act which is not tenable in law. It is further seen that percentage completion method as sought to be applied by the A.O. for computing the income of the assessee by not accepting the method of accounting of income declared by the assessee, is also not prescribed u/s 145/145A of the Income Tax Act, 1961 and therefore also there is no justification for the Assessing Officer to insist that the assessee ought to have applied only percentage completion method. For this proposition we derive further support from the orders of Delhi Bench of ITAT in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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