Case Number: ITA 1429/DEL/2019
Appellant: Sirsa New Towns (P) Ltd., New Delhi
Respondent: ITO, Circle-23(4), New Delhi
Assessment Year: 2014-15
Case Filed On: February 21, 2019
Order Type: Final Tribunal Order
Date of Order: July 24, 2019
Pronounced On: July 24, 2019
The appeal was filed by Sirsa New Towns (P) Ltd. against the order of the Commissioner of Income Tax (Appeals)-30, New Delhi, dated January 1, 2019, for the assessment year 2014-15. The case revolves around the tax arrears dispute, specifically concerning the adjustment in the value of land held as inventory and the corresponding tax implications.
The appellant, Sirsa New Towns (P) Ltd., located at B-4/45, Safdarjung Enclave, New Delhi, with PAN AALCS7872A, was represented by Shri Gautam Jain, Advocate, and Shri Lalit Mohan, CA. The appellant contended that the adjustment in the value of land, amounting to Rs. 2,01,17,175/-, was a result of the sale of a portion of their land as part of an agreement with M/s Vikas Buildmart P. Ltd. According to this agreement, the appellant was to receive the sale proceeds after the completion of the development project.
The respondent, represented by Shri N.K. Bansal, Sr. DR, argued that the adjustment in the value of land should be considered as unexplained cash credit and added to the income of the appellant, as there was no prudent explanation or supporting sale deed provided by the appellant.
The case was heard by Shri O.P. Kant, Accountant Member, and Shri K. Narasimha Chary, Judicial Member, of the Income Tax Appellate Tribunal, Delhi Bench ‘G’. The Tribunal examined the agreement dated May 30, 2008, between the appellant and M/s Vikas Buildmart P. Ltd., which stated that the appellant would receive 1000 sq. yards per acre of developed plot or its equivalent value only after the completion of the project. The Tribunal also noted that the developer, M/s Vikas Buildmart P. Ltd., had accounted for the sale proceeds as revenue from operations in their profit and loss account and had offered this income to tax.
The Tribunal referred to various judicial precedents and emphasized that the principle of consistency should be respected by the tax authorities, particularly when the facts and circumstances remain unchanged across different assessment years. The Tribunal also highlighted that the sale proceeds were already taxed in the hands of the developer, and there was no avoidance or deferment of tax by the appellant.
The Tribunal concluded that the addition made by the AO was misconceived and directed the AO to delete the same. The appeal of the appellant was allowed.
In the result, the appeal of Sirsa New Towns (P) Ltd. was allowed. The order was pronounced in the open court on July 24, 2019.
Signatories:
(O.P. KANT) ACCOUNTANT MEMBER
(K. NARASIMHA CHARY) JUDICIAL MEMBER
Date: 24th July, 2019
Assistant Registrar: VJ
Copy of the Order is forwarded to:
BY ORDER
Assistant Registrar, ITAT, New Delhi
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