TMI Blog2019 (4) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee of the declaration of certain additional income and extrapolate such statement to fit within the scheme of Section 43CA of the Act - notice of reopening of assessment is set aside - WRIT PETITION NO. 345 OF 2019 - - - Dated:- 29-3-2019 - AKIL KURESHI SARANG V. KOTWAL, JJ. Mr. Devendra H. Jain for the Petitioner Mr. A.R. Malhotra for the Respondents P.C.: 1. Heard learned counsel for the parties for final disposal of the petition. 2. The petitioner has challenged a notice of reopening of assessment as also an order of assessment passed pursuant to such notice. 3. Facts in brief are as under:- 3.1 Petitioner is a partnership firm and is engaged in the business of real estate development. For the assessment year 2013-14, the petitioner had filed return of income declaring income of ₹ 1,15,560/-. Pending such return, a survey action was taken against the petitioner under Section 133A of the Income Tax Act, 1961 ( the Act for short) on 15.1.2015. During survey, it was found that the petitioner had sold certain flats in one Zain Tower at a price lower than the stamp valuation of such property. The statement of a partner of the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the FY 2011-12 relevant to AY 2012-13, assessee constructed 33 flats, out of which it sold 18, and was left with a closing stock of 15, whose value was ₹ 2,61,93,081/-. During the FY 2012-13 relevant to the AY 2013- 14, the assessee constructed one more flat and sold 13 flats, hence it should had been left with 3 [(15+1)-13] unsold flats, however, the assessee had shown only one unsold flat, in its closing stock, amounting to Rs. ₹ 9,08,114/-. Value of unsold flat as on 31.03.2013 Opening WIP of 15 flats unsold as on 31.03.2012 ₹ 2,61,93,081/- Add : Expenses during FY 2012-13 ₹ 46,81,323/- ₹ 3,08,74,404/- Closing WIP of 3 unsold flat as on 31.3.2013 30874404*3/16 ₹ 57,88,950/- Thus, as on 31.03.2013, the assessee has undervalue the unsold flats to the extent of ₹ 48,80,836/- (5788950 - 908114), on account of reduced closing stock. Analysis of information collected / received: The total market value of the 13 flats, each having a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer passing the order of assessment before less than four weeks' of disposing of the petition since eventually, it would amount to requiring the Assessing Officer, at best to pass a fresh order. He had, therefore, focussed his challenge to the very notice of reopening of assessment and in that context, we have heard the learned counsel for both the sides in this petition. 5. Perusal of the reasons recorded by the Assessing Officer would indicate two grounds on which he sought to reopen the assessment. First is with respect to the receipts arising out of the sale of flats in Zain Tower by the assessee. According to the Assessing Officer, during survey, it was found that the assessee had sold the flats at a price less than the market value which fact the partner of the assessee firm had accepted in his statement and declared the amount of ₹ 76.75 Lakhs by way of additional income. Subsequently, however, the Assessing Officer noticed that as per the stamp duty valuation, the total consideration of the sold flats came to ₹ 4.46 Crores (rounded off) as against the total sale value of 3.03 crores (rounded off). Thus, the assessee had disclosed a sum of ₹ 66.36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has not been received by a seller of an immovable property at the time of sale. 9. With this background, we may refer to the statement of the partner of the firm during survey. Relevant question and answer read as under:- Q. 13. I am showing you a loose papers impounded and marked as Page No. 8 9 of Annexure 'A-1', which contains list of customers to whom flats in 'Zein Tower' has been sold. As per said list, the Agreement Value of the flats sold is varying from the Market Value (Stamp Duty Value) for which the flats shuld have been sold. You are asked to furnish justification in this regard. Ans. These papers contains the list of customers to whom flats have been sold at the value lesser that the Market Value. I understand about tax implications for selling flats at the value lower than the Market Value. Therefore, in order to avoid litigation and to buy peace of mind I offer the amount of ₹ 83,25,000/- for Assessment Year 2012-2013 and ₹ 76,75,000/- for Assessment Year 2013-2014 to tax towards undervaluation of flats as compared to Market Value (Stamp Duty Value). Under this question, the partner was then shown certain l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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