Case Law Details
Samarath Realities Vs DCIT (ITAT Ahmedabad)
To sum up, the main arguments of the assessee are that the land cost varies from block to block and therefore the same is variable. The cost of land gets allocated through registered sale deed and the same is transferred to the land owner. The assessee of the project has been consistently following this methodology of cost allocation where through registered deed the consideration of cost of flat is determined and later transferred to the land owner. Therefore, the ld. counsel for the assessee has submitted that in case the consideration for land cost to the extent of 15% (which comes to Rs. 49,71,556/-) is again taxed in the hands of the assessee, it would lead to double taxation. This is the last year of the project and the methodology of cost allocation has been accepted in the prior two years as well. We are in agreement with contention of the ld. counsel that once having accepted this methodology for the past years, the Department cannot reject the methodology in the third year of the project, following the principle of consistency.
We are of the view that the ld. Assessing Officer has erred in law and fact in rejecting the books of accounts of the assessee which the Department has accepted in prior years on the same set of facts. However, we note from the orders of ld. Assessing Officer and the ld. CIT(A) that the appellant has not produced any evidence in support of its claim that whatever advances have been shown by the appellant in the balance sheet, the same have been transferred to landowners and offered in the income tax return of the respective land owners. Since, the ld. CIT(A) has made a specific noting that no details were furnished to prove that this income has been offered for taxation in the hands of the land owner, in the interests of justice, we restore the matter back to the file of A.O. on the limited point to verify whether income has been transferred to the land owners and has been offered to tax in their return of income.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-10, Ahmedabad in Appeal no. CIT(A)-10/DCIT. Cir-1(2)/103/15-16 vide order dated 31/03/2017 passed for the assessment year 2012-13.
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