Pr. Commissioner Of Income Tax-22 v. M/S. K.s. Constructions

DDR IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.1294 OF 2017 Pr. Commissioner of Income Tax-22 ..Appellant vs. M/s. K.S. Constructions ..Respondent …........ Mr. Suresh Kumar for appellant. …........ CORAM : NITIN JAMDAR &M.S.KARNIK, JJ. DATE : 6 JANUARY 2020 P.C.:- Heard learned counsel for the Appellant. 2.The Appellant – Revenue has challenged the order dated 12August 2016 passed by Income Tax Appellate Tribunal in IncomeTax Appeal No.7660/M/2014. 3.The Appeal pertains to the Assessment Year 2010-2011. 4.The Appellant – Revenue has framed the followingquestions as a substantial questions of law :- “(A) Whether on the facts and circumstances of the caseand in law the Hon’ble Income Tax Appellate Tribunalerred in deleting the addition of Rs.4,16,70,874/- onaccount of suppressed sale consideration in respect of theunit sold by the assessee at a lower rate than the other flats in the same building even after the assessee failed to justifysufficiently before the Assessing Officer as to why theaforesaid flats were sold at a lower price ?” (B)Whether on the facts and circumstances of the caseand in law the Hon’ble Income Tax Appellate Tribunalshould have upheld the addition of Rs.4,16,70,874/-towards suppressed sale consideration where the Hon’bleIncome Tax Appellate Tribunal vide order dated 15/6/2011in Income Tax Appeal No.55378/Mum/2009 in the case of ITO 19(3)(1) Mumbai vs Diamond Investment &Properties (Assessment Year 2005-06) had upheld similaraddition of suppressed sale consideration under similar factsand circumstances which was upheld by Hon’ble BombayHigh Court order dated 20/3/2014 in Income Tax AppealNo. 14 of 2012 ?” 5.The Respondent – Assessee had sold six units from acommercial complex. An addition of Rs.4.16 crore was made to theincome of assessee. Assessee firm is builder and developer andengaged in the activity of buildings and redevelopment of realestate projects. Assessee during the year declared income frombusiness and other sources. During assessment proceedings,Respondent showed income from sale of commercial units locatedin a commercial complex. Assessing Officer called for reasons forvariation in the sale rate per sq. mtr. in respect of the units. TheRespondent claimed that market value, as assessed by the stampduty registering authority in the case of Unit No. 302 wasRs.1,44,58,500/-, as against agreement price of Rs.1.51 crore, 38. itxa 1294-17.doc which is higher than the market value assessed by the stamp dutyregistering authority. The Assessing Officer observed that saleprice of Unit No. 302 was less than the price at which similarcommercial units had been sold to other buyers in the samebuilding during the similar time period, therefore, the claim ofassessee that sale price of Unit No. 302 was higher than the stampduty is not relevant. Assessing Officer also rejected the submissionof assessee that Unit No. 302 suffers from design disadvantagesand it could not get any customers to purchase the premises ofUnit No. 302. The Assessing Officer held that the prevailing rateswere in the range of Rs.2,38,576/- to Rs.2,94,485/- per sq.mtr.and Respondent was unable to give convincing explanation.Accordingly, the Assessing Officer applied the rate ofRs.2,94,485.29 per sq. mtr. for computing the sale price of UnitNo. 302 (192.78 sq. mtr.) and difference of Rs.4,16,70,874/- wastreated by him as unaccounted income of assessee from sale ofUnit No. 302, and added same to the income of assessee. 6.The Respondent filed an Appeal to the Commissioner ofIncome Tax (Appeals), who allowed the Appeal after consideringthe difference of sale transaction and holding that the sale was notunder valued. The Tribunal has upheld the order passed by theCommissioner of Income Tax (Appeals). 38. itxa 1294-17.doc 6.The Respondent filed an Appeal to the Commissioner ofIncome Tax (Appeals), who allowed the Appeal after consideringthe difference of sale transaction and holding that the sale was notunder valued. The Tribunal has upheld the order passed by theCommissioner of Income Tax (Appeals). 38. itxa 1294-17.doc 7.Both, the Commissioner of Income Tax (Appeals) andTribunal, have assessed the facts on record. The finding of fact isthat Unit No. 302 suffers structural and locational disadvantagefrom the units which were taken into consideration as comparableunits. The Tribunal also took into consideration that the price forsale consideration for Unit No. 302 was higher than the readyreckoner prepared by the State of Maharashtra for the stamp dutyvaluation. There is thus a finding of fact rendered by twoauthorities concurrently. The issue being one of the fact afterassessment of evidence and the approach of the authorities inassessing the evidence is not having been found perverse, theAppeal does not give any rise to any substantial question of law.The Appeal accordingly dismissed. (M.S.KARNIK, J.) (NITIN JAMDAR, J.) DigitallyDikshasigned byDiksha RaneDate:Rane2020.01.1517:43:56+0530