Ashoka Developers & Builders Limited, ... vs Department Of Income Tax
- CitationI.T.A. No. 1906/HYD/2014
Ratio decidendi
The rule this decision rests on
Where the Assessing Officer proposes to tax the difference between an assessee's recorded sale price and an average rate, the addition cannot rest on the assessee's own Books of Accounts and the Assessing Officer has no power to fix the sale price on assumptions and presumptions; absent evidence that sale proceeds were actually suppressed or that consideration beyond the recorded value was received, such an addition is unsustainable. Where the material facts on which an addition is sought are the same in successive assessment years and an identical addition has already been deleted by the tribunal in earlier years, the same result follows for the year under appeal, since there is no basis on which the addition can be sustained.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Dy. Commissioner of M/s.Ashoka Developers & Income Tax, Vs Builders Ltd., Central Circle-2(1) Banjara Hills, HYDERABAD HYDERABAD [PAN: AAECA4442R]
(Appellant) (Respondent)
For Revenue : Shri Rajat Mitra, DR For Assessee : Shri K.C.Devadas, AR
Date of Hearing : 07-04-2015 Date of Pronouncement : 17-04-2015
ORDER
PER B. RAMAKOTAIAH, A.M. :
This is a Revenue's appeal against the order of the Commissioner of Income Tax(Appeals)-VII, Hyderabad dated 22-10-2014. The issue involved in Revenue's appeal is with reference to addition of Rs.54,74,728/- made towards the rate difference on sale consideration for villas sold during the year deleted by CIT(A).
I.T.A. No. 1906/Hyd/2014 :- 2 -: M/s.Ashoka Developers & Builders Ltd
2. Assessee had sold certain villas constructed by it and Assessing Officer [AO] noticed that the rate at which assessee has sold varied from Rs.1,842/- per sq. ft., to Rs.3,046/- per sq. ft.. While accepting that in the earlier year, AO determined the average sale price at Rs.2,592/- per sq. ft., and this year it has come down to Rs.2,248/- AO, however, took the average rate of the sale price and arrived at the difference of Rs.54,47,728/- on six villas which were sold at a price lesser than average rate, thereby making addition. Ld.CIT(A) following the decision of the ITAT and CIT(A)-2 for the Assessment Year 2010-11, deleted the addition, hence Revenue is in appeal.
3. It was contended that the facts are entirely different from the earlier years and huge variation in rates of villas are not possible in the same gated community. Ld.Counsel, however, relied on the orders of the co-ordinate bench for the AY.2010-11, wherein ITAT deleted the addition holding that there is no evidence brought on record by the AO to show that any extra consideration outside the Books of Accounts or beyond the value given in the relevant agreements whether received by assessee from the purchases of the villas. It was also noted by the ITAT that addition on account of alleged suppression of sale proceeds was made on the same basis as in earlier years.
4. We have considered the issue and examined the facts on record. ITAT in their orders from AY.2008-09 to 2009-10 in ITA No.937/Hyd/2013 dt. 28-03-2014, deleted the addition based on SRO, Values. Following that in AY.2010-11, the ITAT vide ITA No.1315/Hyd/2014 dt. 14-11-2014, deleted the addition. The material facts for the issue are same in all the years. Therefore, CIT(A) is correct in deleting the amount as there is no basis for making addition. Surprisingly in this year, the AO has taken the assessee's own sale price I.T.A. No. 1906/Hyd/2014 :- 3 -: M/s.Ashoka Developers & Builders Ltd
recorded in the Books of Accounts and arrived at average rate and made addition of only six villas which are sold for a price less than the average rate. We are unable to understand how the AO could work out suppression of price on the basis of the entries in the Books of Accounts. Moreover, AO has no power to arrive at the sale price on assumptions and presumptions, there being no evidence that assessee has indeed suppressed the sale proceeds.
5. In view of this, we do not find any merit in the Revenue's grounds. Accordingly, the appeal is dismissed.
Order pronounced in open Court on 17th April, 2015
Sd/- Sd/-
(ASHA VIJAYARAGHAVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated 17th April, 2015
TNMM I.T.A. No. 1906/Hyd/2014
:- 4 -: M/s.Ashoka Developers & Builders Ltd
Copy to :
1. Dy. Commissioner of Income Tax, Central Circle-2(1), 3rd Floor, Posnett Bhavan, Ramkote, Tilak Road, Hyderabad.
2. M/s. Ashoka Developers & Builders Ltd., rd #8-2-120/112/P/7, 3 Floor, Park view Estate, Road No.2, Banjara Hills, Hyderabad.
3. CIT(Appeals)-VII, Hyderabad
4. CIT(Central), Hyderabad
5. D.R. ITAT, Hyderabad
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