TMI Blog2017 (11) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has suppressed the sale of plots, but on the contrary, we find that the Assessing Officer has erroneously assumed wrong facts as aforestated in rejecting the books of account and thereby proceeding to estimate the income of the asses see on account of suppression of sale of plot. We concur with the findings of the Commissioner of Income-tax (Appeals) and hold that the Assessing Officer was not justified in rejecting the books of account and estimating the income of the assessee. Even otherwise, the Assessing Officer was not justified in invoking the provisions of section 145(3) of the Income-tax Act. - Decided in favour of the assessee - D. B. Income Tax Appeal No. 481 of 2009 - - - Dated:- 1-8-2017 - K. S. Jhaveri And Inderjeet Singh, JJ. For the Appellant : R. B. Mathur with K. D. Mathur For the Respondent : Mahendra Gargeiya JUDGMENT 1. By way of this appeal, the appellant has challenged the judgment and order passed by the Tribunal whereby the Tribunal has allowed the appeal of the assessee and dismissed the appeal of the Department modifying the order of the Assessing Officer as well as the Commissioner of Income-tax (Appeals). 2. This court while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al estate is absurd and not acceptable. (ii) In so far as sale of plots for shops were concerned, the same were sold for ₹ 232.60 per sq. yard (excluding development charges) whereas plots meant for residential purposes were sold for ₹ 235 per sq. yard as mentioned above (excluding development charges). This position is again absurd and unacceptable because plots sold for commercial activity are any day costlier than for plots earmarked for residential purposes. This fact is also supported by DLC rates wherein it is categorically mentioned that the rate of plots for commercial area will be three times for that of residential area. (iii) A copy of DLC rates obtained from the Dy. Registrar, Sanganer, reflected that the rate of land for the above area, i.e., Shrikishanpura ranged between ₹ 360 per sq. yard to ₹ 660 per sq. yard for the width of the road ranging between 30 feet to 100 feet, respectively. On the contrary, the assessee has sold the plots at much lower rate at ₹ 265 per sq. yard, without taking into account any criteria including the width of the road. (iv) As observed in the details submitted by the learned authorised representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of agricultural land measuring 14.16 hectares on August 4, 2003 for ₹ 329.32 lakhs, which was contiguous to the land purchased earlier and both these lands were located in the same village, i.e., Srikishanpura. The appellant got the land converted from agricultural to residential, divided the same into plots of land, as per the relevant rules of the JDA and sold 307 plots measuring 1,23,274 sq. yards for ₹ 440.72 lakhs, during the financial year relevant to this assessment year. As mentioned above, the total area of both the chunks of land was 22.38 hectares, equivalent to 2,66,935 sq. yards. Out of the total land, after leaving the land for common facilities such as roads, parks, public utility, etc., the saleable land remaining was 1,59,697.56 sq. yards as per the map approved by the JDA placed on record (PB-pg. 27). The total cost paid by the appellant amounted to ₹ 42,561 lakhs. Therefore, the average cost of saleable land works out to ₹ 266.51 per sq. yard as claimed by the appellant-assessee. Hence, I find that the contention of the learned authorised representative is correct that the average cost of purchase of saleable land is ₹ 266.51 per sq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those plots. Therefore, I find merit in the contentions of the learned authorised representative that no specific defect has been pointed out by the Assessing Officer in the books of account particularly in relation to the amounts recorded in the books of account for sale of plots to persons, other than members of the RTS. (e) Further, I find substance in the contentions of learned authorised representative that some of the plots were in dispute, out of those plots which were sold at a lower cost, because one of the owners of the agricultural land has separately sold those plots to another society, i.e., Rajpura Grah Nirman Sahkari Samiti Limited. The appellant had produced the evidence regarding the dispute before the Assessing Officer and which are placed on pages 28 to 35 of plots of land were only about 30, however, they were placed at roads, etc., and therefore had a bearing on the sale value of other nearby plots of land. Hence there is some substance in the argument of learned authorised representative that the value of some of the plots was less as compared to those other plots, which were not affected by the dispute and accordingly, the appellant received less price f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of purchase of saleable land comes to ₹ 364 per square yard and whereas the assessee has sold the plots for ₹ 400 per sq. yard which included a sum of ₹ 165 per sq. yard as development charges, therefore, in effect the selling price of the land was only ₹ 235 per sq. yard. Thus the Assessing Officer held that this position did not reflect true and correct picture of the books of account as selling of plot at a loss in real estate is absurd and not acceptable. As noticed by us in para 6 that the Assessing Officer proceeded on a erroneous assumption of fact as she calculated the average cost of saleable land by taking into consideration only one part of land, i.e., 43 bighas only and whereas the other part which is 32.55 bighas was not at all considered by the Assessing Officer. The afore said fact was even considered by the learned Commissioner of Income-tax (Appeals) and therefore the learned Commissioner of Income-tax (Appeals) was justified in holding that the actual average cost of saleable produce works out to ₹ 266.51 per sq. yard and not ₹ 364 per sq. yard as noted by the Assessing Officer. To come to this conclusion, there was enough mate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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