The case ITA 903/DEL/2019 involves an appeal filed by Rosemary Properties Pvt. Ltd., New Delhi, against the Income Tax Officer, Ward-21(4), New Delhi. The assessment year in question is 2008-09, and the appeal was filed on February 6, 2019. The final order was pronounced on September 27, 2023.
Rosemary Properties Pvt. Ltd. filed its return of income on March 30, 2009, declaring a total income of Nil, which was processed under Section 143(1) of the Income Tax Act. Based on information received from the DDIT (Inv.)-1, Jaipur, regarding a Transaction Entry Point (TEP) involving M/s Signature Consortium, the Assessing Officer (AO) reopened the case under Section 148.
The AO alleged that Rosemary Properties was involved in a property transaction, detailed in a Memorandum of Understanding (MOU) dated February 22, 2007, where 360 bighas of land were sold for a total consideration of Rs. 74,80,50,000. The AO attributed 50% of this amount to Rosemary Properties and assessed Rs. 36,63,25,000 as income for the assessment year 2008-09.
Rosemary Properties raised several grounds in their appeal, including:
During the hearing, the appellant’s representative argued that the MOU in question was not signed by Rosemary Properties, nor was there any authorization for such a transaction. The company only owned 22.68 bighas of land, which was sold in the financial year 2012-13, and this was reflected in their balance sheets. The revenue’s case hinged on the MOU, which the appellant contested.
The CIT-DR argued that the MOU was legally valid, being attested by a notary public, and that Rosemary Properties had received advance payments as per the MOU. The revenue cited the appellant’s lack of action against the alleged unauthorized MOU and pointed out admissions by parties involved in the transaction during the investigation.
The tribunal, after examining the arguments and evidence, found that the revenue failed to establish the actual receipt of money or transfer of property as alleged in the MOU. The addition of Rs. 36,63,25,000 was based on assumptions without concrete evidence. Therefore, the tribunal allowed the appeal, dismissing the addition.
The appeal by Rosemary Properties Pvt. Ltd. was allowed, and the addition of Rs. 36,63,25,000 made by the AO was dismissed. The tribunal emphasized the lack of substantive evidence to support the revenue’s claims.
Order Pronounced in the Open Court on September 27, 2023, by Dr. B. R. R. Kumar, Accountant Member, and Ms. Astha Chandra, Judicial Member.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform