Decided on June 04,2014



SAKTIJIT DEY,JM. - (1.) THIS appeal of the department is directed against the order dated 30 -9 -2013 of CIT (A) -V, Hyderabad pertaining to assessment year 2006 -07.
(2.) IT appears from the grounds raised, the department is aggrieved by the order passed by the CIT (A) deleting the additions made by the Assessing Officer and computing long term capital gain of Rs.50,34,452/ -.
(3.) BRIEFLY the facts are, the assessee a private limited company is engaged in manufacture and supply of storage equipment and agricultural implements. For the assessment year under dispute, the assessee filed its return of income declaring 'nil' income after setting off brought forward loss and unabsorbed depreciation to the extent of Rs.3,65,74,701/ -. Initially, the assessment was completed u/s 143(3) vide order dated 31 -12 -2008 determining taxable income of Rs.1,99,36,802 from long term capital gains. As it appears from facts on record, the assessee challenged the said assessment order before the CIT (A). Being unsuccessful before the CIT (A), the assessee carried an appeal before the Income -tax Appellate Tribunal. The Income -tax Appellate Tribunal, Hyderabad Bench vide its order 7 -5 -2013 passed in ITA No.1687/Hyd/10 remitted the matter back to the file of the Assessing Officer with a specific direction to compute capital gains only in respect of sale of built up area received by the assessee. Of course, the Income -tax Appellate Tribunal without deciding the other issues such as addition of Rs.18,55,000/ - as under valuation in property and applicability of section 50C remitted the matter back to the file of the Assessing Officer. In pursuance to the direction of the Income -tax Appellate Tribunal as above the Assessing Officer initiated assessment proceedings afresh by issuing a notice to the assessee. During the assessment proceedings, on verification of breakup of sales, the Assessing Officer noticed that the assessee has shown an amount of Rs.4,15,33,255/ - as receipts from sale of floor space. The Assessing Officer also pointed out certain other discrepancies between the opening stock and closing stock. However, since we are not concerned with that issue, it is not necessary to deal with the same. So far as receipts from sale of floor space is concerned, the Assessing Officer after examining the information called for found that the assessee had given property bearing No.603 -1090/B/1 & 2, Raj Bhavan Road, Hyderabad admeasuring 1011 square yards for development to M/s Vasundhara Devi Estates (P) Ltd., for construction of multi -storied complex by name 'Mayank Towers' vide development agreement dated 29 -3 -1995 and MOU dated 11 -9 -1999 and 27 -8 -2004. As per the terms of development agreement, the assessee received 50% of the built -up area and parking space of the developed property which roughly case to 19136 sq.ft. Out of which the assessee sold 9443 sq.ft in the financial year 2004 -05 but the receipts from sale of such built up area was admitted as income in the assessment year under dispute. He further found that the assessee had another property bearing No.6 -3 -866/A, Greenland Road, Begumpet, Hyderabad admeasuring 1156 sq. yards which was given for development of a multi -storied commercial complex by name 'Mayank Plaza' to M/s Maheswari Plaza Resorts (P) Ltd., vide development agreement dated 16 -3 -2001 and supplementary agreement dated 23 -2 -2002. As per the terms of the development agreement, the assessee received 50% of the built -up area and parking space of the developed property i.e., 9650sft., which has been sold by the assessee during the assessment year under consideration.;

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