Gun Sagar Build Estate Vs ITO (ITAT Jaipur)
Jaipur ITAT Deletes Addition for Alleged Undisclosed Property Sales Already Offered to Tax in Earlier Year
The Jaipur ITAT allowed the assessee’s appeals for AYs 2016-17 and 2017-18, holding that sale proceeds already forming part of the disclosed turnover and subjected to tax in an earlier assessment year cannot be taxed again merely because the sale deeds were registered in a subsequent year.
For AY 2016-17, the Assessing Officer treated ₹60.52 lakh as undisclosed sales based on the date of registration of the sale deed. The assessee, however, demonstrated through the sales ledger, audited financial statements and the return of income for AY 2015-16 that the transaction had already been recognised as part of the gross turnover in the earlier year and the resultant business income had been offered to tax. The Tribunal accepted the explanation, observing that the revised return for AY 2015-16 had been filed after the registration of the sale deed, explaining why the registration date appeared in the narration of the earlier year’s sales ledger. It held that once a receipt has formed part of the disclosed turnover and has been subjected to tax, it cannot be brought to tax a second time, and accordingly deleted the addition of ₹60.52 lakh.
Applying the same reasoning to AY 2017-18, the Tribunal found that sales aggregating ₹81.34 lakh relating to four purchasers had already been included in the disclosed turnover of AY 2016-17, as evidenced by the audited accounts, sales ledger and return of income. Since the receipts had already been taxed in the earlier year, the Tribunal held that the Revenue could not tax the same amount again merely because the registration took place later. It therefore deleted the addition of ₹81.34 lakh as well. Both appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
These two appeals of the assessee are directed against the orders of the ld. Commissioner of Income Tax (Appeal), NFAC, Delhi, both dated 06/08/2025, are emanating from the order of the AO, NeAC, dated 25.03.2022 passed u/s 147 of the Act, 1961.
2. First, we take up appeal in ITA No: 1512/JPT/2025, for the Asst Year: 201617:
3. Grounds of Appeal in Asst Year: 2016-17 as per form 36 are as follows;
“1. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs.60,52,090/- u/s 28 of the Act on account of alleged undisclosed sales by not accepting the contention of assessee that the sale of the property registered in AY 2016-17 is duly declared in financial statements & ITR of AY 2015-16.
2. The Ld. CIT(A), NFAC has further erred on facts and in law in not giving any finding on the contention of assessee that in case of alleged undisclosed sales only gross profit can be added and not the entire sales.
3. The appellant craves to alter, amend and modify any ground of appeal. “
4. Brief facts emerging from records are that the assessee is a partnership firm (PFAS ) engaged in the business of real estate and has filed its return disclosing an income of Rs. 14.87 lakhs. The case was reopened on the basis of information flowing from registration records that the assessee has not disclosed one sale of immovable property amounting to 60.52 lakhs which was registered before registration authorities on 13th December, 2015( relevant to the assessment year under appeal ).
5. The explanation of the assessee was that the said sale duly registered on 13/12/2015, has been made to one Mr Nasruddin , and the same has already been disclosed under SALES in his books of accounts on the date of booking on 01St December, 2014 ( measuring 1100.38 sq yards) @ 5,500 / Yards , valued at Rs .60,52 ,090/- ), in support of which documentary evidence reflecting such sale in sales ledger A/c, audited profit and loss A/c as on 31/03/2015, ITR for the Asst year 2015-16 , has been filed , where the Gross sales for the year ending March 2015 was reflected at Rs. 99.79 lakhs consisting of seven parties, out of which the said Mr nasruddin was one of the buyer in the list.
5.1 On verification of documents the observation of the AO was that the ledger A/c of sales for the FY 2015-16, does reflect the above sale but with a narration that the said sale has been registered on 31/12/2015, and the query raised by the AO was that when the accounts for March 2015 has been finalised , how was it possible to foresee the date of registration on 13/12/2015 ,( which for all practical purpose is a subsequent even) , and in absence of any agreement for sale and details of payments being furnished , the said entry in the ledger has been alleged to have been pre- dated.
5.2 The assessment for the year under appeal was completed with an addition of Rs.60.52 lakhs, considering the registered value of the sales effected with Mr Nasruddin, as suppressed / undisclosed for the year under appeal.
6. The matter carried in first appeal has been dismissed by the Ld CIT ( A ) , with the following observation:
“The above grounds of appeal are on same issue, hence adjudicated together. During the assessment proceedings, the AO found that the appellant has sold immovable properties amounting to Rs. 60,52,090/-. It was noticed that these receipts are not shown in the return of income. On examination of the submission of the appellant during assessment proceedings, AO gave the following observations:
“On perusal of sales ledger submitted by the assessee, it is noticed that the sale Page 4 of 7 AALFG6086D-GUN SAGAR BUILD ESTATE A.Y. 2016-17 ITBA/AST/S/147/2021-22/1041643327(1) entry with respect of Mr. Nasurridin has been made on 01.12.2014 however the narration states that the registry date is 31.12.2015. It cannot be logically concluded how the assessee could foresee on 01.12.2014 that the registration for this particular property will be made on 31.12.2015. So the logical conclusion is that the assessee has made a back dated entry in which case the sales ledger cannot be accepted as genuine. Moreover, the assessee have not given any rationale for booking the revenue in FY 2014-15 whereas the sale deed has been registered in FY 2015-16. No copies of sale agreement, date of payment is received. Further the assessee has not shown any revenue from operation in the ITR of FY 2014-15. Hence, plea of the assessee can’t be considered. Hence, Rs.60,52,090/- is hereby treated as undisclosed sale and the same is hereby added back to the total income of the assessee.”
The appellant’s submission during assessment and in the appellate proceedings is that the whole transaction of properties of Rs. 60,52,090/-has been shown in FY 2014-15. AO has pointed out that registry date is 31.12.2015 in respect of all transactions. Even the registries have mentioned the date of DD/cheques as of December, 2015. Even the cash component as mentioned in the registered deeds is December, 2015. It is clear that transactions were done in FY 2015-16, and there is no reason or point of showing it in one year prior computation/return of income. The conclusion drawn by AO is correct and upheld. Hence, addition made by the AO amounting to Rs. 60,52,090/- u/s 28 of the Act is sustained.
The grounds of appeal is dismissed.”
7. Before the tribunal the Ld AR of the assessee filed a short paper book containing audited financials, copies of ITR — V for the Asst year 2015-16 , copy of sale deed of property to Nasuriddin, and audited financials for the year under appeal AY 2016-17 and copies of bank statement.
8. The Ld AR referring to the audited financials for Asst year 2015-16, submitted that the sale proceed arising out of the sales made to Nasruddin, amounting to Rs. 60.52 lakhs has been duly disclosed as part of Gross Sale Proceeds of 99.79 lakhs for the FY 2014-15, and the same has already been considered for the purpose of taxation, in the Asst year 2015-16. He further pointed out that the Return of income for the Asst year 2015-16, has been filed on 17th October, 2016 ( which is a revised return) , and since the registration was already effected by then on 13th December, 2015, the said date was mentioned in the narration of sales for the FY 2014-15 ( relevant to the Asst year 2015-16).
9. Before concluding he further clarified that the observation of the AO ( in para — 2.4 last) that the assessee has not shown any revenue from operations in the ITR FY 2014-15 is not at all correct , because the said SALE has already formed a part of the gross receipts of Rs. 99.79 lakhs for the FY 2014-15 , reflected in profit and loss A/c , and the said sales has already been subjected to taxation for the asst year 2015-16 as part of gross turnover ( pb page 38) on which NP of Rs.7.98 lakhs has been returned and accepted.
10. The Ld. DR relied on the order of Ld. CIT (A), and retreated the contention of the AO.
11. We have heard the rival submissions and considered the materials on record. The pertinent issue that arises in this case is whether the SALE of Rs. 60.52 lakhs effected in favour of Mr. Nasuriddin has been considered and subjected to taxation in the hands of assessee or has it remained suppressed. We find from records produced before us that the said SALE has formed a part of the disclosed turnover for the asst year 2015-16 ( FY 2014-15) which is part of revenue from operations and is also duly reflected in the return of income filed on 17th October, 2016 (revised return),accompanied by audited financials and sales ledger, which is accepted by the department. We are of the opinion that once a receipt has formed a part of the gross turnover and subjected to taxation, the said amount cannot be brought into tax for the second time.
11.1 As such we delete the addition of Rs. 60.52 lakhs and allow the appeal of the assessee.
12. In the result, the appeal of the assessee is allowed.
ITA No: 1513/JPR/2025: Asst year: 2017-18
13. The grounds of appeal taken in form 36 are as follows:
“1. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs.81,34,410/- u/s 28 of the Act on account of alleged undisclosed sales by not accepting the contention of assessee that the sale of the property registered in AY 2017-18 is duly declared in financial statements & ITR of AY 2016-17.
2. The Ld. CIT(A), NFAC has further erred on facts and in law in not giving any finding on the contention of assessee that in case of alleged undisclosed sales only gross profit can be added and not the entire sales.
3. The appellant craves to alter, amend and modify any ground of appeal. “
14. The facts of this year is identical to the facts discussed in the earlier Asst year 2016-17 and our observations also applies mutatis mutandis.
15. The quantum of sales as per observation of the AO in the assessment order is Rs. 81.34 lakhs relating to four buyers namely (i) Nutan Kanwar, (ii) Ashok Haldeena, (iii) Manju Haldeena and (iv) Prem Prakash Sharma, where the date of actual registration before the registration officer as per deed was 8th July, 2016 (relevant to the year under appeal i.e. Asst year: 2017-18).
15.1 Similar paper book has been filed before us consisting of audited financials, copies of ITR — V for the Asst year 2016-17, and audited financials for the AY 2017-18 and copies of bank statement and the Ld. AR in course of hearing has made similar submissions, as per earlier year and the Ld DR relied on the order of the CIT(A).
16. We find from records produced before us that the said SALE totalling Rs. 81.34 lakhs ( relating to the four parties stated above), has formed a part of the disclosed turnover of 2.12 crones (page — 31 of pb) for the asst year 2016-17 (FY 2015-16 ), which is part of revenue from operations and is also duly reflected in the return of income filed on 315t March, 2018 (Original return), accompanied by audited financials and sales ledger, which is accepted by the department.
16.1 We also observe that the date of filing of the regular return in ITR-5, for the Asst year 2016-17, (being 31.03.2018) was after the date of registration of the deed of sales on 8th July, 2016, and as such the assessee already had the knowledge of the registration date and has inserted the said date in the narration of sale ledger for the FY 2015-16.
16.2 We are of the opinion that once a receipt has formed a part of the gross turnover and subjected to taxation, the said amount cannot be brought into tax for the second time.
16.3 As such we delete the addition of Rs. 81.34 lakhs and allow the appeal of the assessee.
17. In the result both the appeals of the assessee are allowed.
Order pronounced on 28.07.2026 under Rule 34(4) of the Income Tax Appellate Tribunal Rules 1963.
