TMI Blog2018 (8) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... n completion method, the assessee has admitted the certified value of construction of ₹ 31,40,950/- which works out to 72% of the sale value. The stage of completion of work was certified by the approved Panel Engineer and the AO has not brought on record to establish that the assessee has completed the construction more than the value certified by the engineer. Therefore, we hold that the assessee has correctly admitted the sum of ₹ 31,40,950/- towards the value of construction upto 31.03.2006, no further addition is required. The remaining sale proceeds were already admitted by the assessee in subsequent year in respect of 9 flats. Accordingly, we hold that the assessee has correctly, admitted the sale value in respect of 9 flats and no further addition is required. Therefore, the order of the Ld.CIT(A) is set aside and the addition made by the AO is deleted. The appeal of the assessee on this ground is allowed. - I.T.A.No.89/Viz/2014 - - - Dated:- 31-7-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N.Hari, AR For The Respondent : Shri K.C.Das, DR ORDER PER D.S. SUNDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee went on appeal before the Ld.CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee. 6. Against the order of the CIT(A), the assessee is in appeal before this Tribunal. The assessee raised additional ground challenging the validity of issue of notice u/s 148 of the Act. The assessee argued that in this case, the assessment was completed u/s 143(3) by an order dated 08.01.2008 and the assessee had furnished the complete details before the AO. The assessee further submitted that it has submitted the profit and loss account in the original assessment proceedings as evidenced from the assessment order and the AO reopened the assessment basing on the information already available in the assessment records. The information with regard to the sale of the flats, admission of income is made available to the AO at the time of original assessment which was examined by the AO and completed the assessment. Therefore, the Ld.AR argued that there is no fresh information available to the assessee, hence reopening of assessment is due to difference of opinion of the later AO, hence argued that notice issued u/s 148 is bad in law and required to be quashed. 7. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction ITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 597 (SC); Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC). 17. The scope and effect of section 147 as substituted with effect from 1-4-1989, as also sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied firstly the Assessing Officer must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose fully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) and the Ld.CIT(A) confirmed the addition of ₹ 25,50,874/-. Against the order of the CIT(A), the assessee is in appeal before this Tribunal. 11. We have heard both the parties, perused the material placed on record. It is seen that the assessee has declared the receipts in the P L account as under : (i) Sale of land relating to 9 flats : Rs.9,63,000/- (ii) Value of work completed in respect of 12 flats as per Engineer s certificate : Rs.31,40,950/- (iii) Value of 3 unsold land site : ₹ 2,86,670/- Rs.43,90,620/- As against the above, the AO has felt that the contract value to be considered for assessment would be as follows :- (a) 9 flats land sale value = ₹ 9,63,000/- (b) 9 flats constn. Agreement value = Rs.43,60,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has sold 9 flats during the financial year 2005-06. Both undivided share of land and the flats were sold on the same date. It is undisputed fact that in practice semi finished flats are sold in this line of business and enter in to a separate agreement for completion of the remaining structure. The assessee also had entered into agreement for construction on the same day of sale of the land. As per the construction agreement Clause No.7, the assessee should complete the construction within 12 months with a grace period of 90 days from the date of agreement. The agreements are entered with the vendees between period of August 2005 to March 2006 for various rates. The first agreement entered into by the assessee was on 24.08.2008 and all the construction agreements contain the similar clauses. Therefore, it is established that as on the date of sale, the construction was not complete and there was a time limit for assessee to complete the construction. Since the assessee is following construction completion method, the assessee has admitted the certified value of construction of ₹ 31,40,950/- which works out to 72% of the sale value. The stage of completion of work was cer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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