DCIT Vs Navratna Organisers And Developers Pvt. Ltd. (ITAT Ahmedabad)
ITAT Ahmedabad held that addition of short term capital gain on account of transfer of shares on presumption basis without bringing on record evidencing actual receipt of consideration cannot be sustained. Accordingly, addition deleted.
Facts- Assessee engaged in the business of development of various projects from which it earned development fees. AO has not accepted the method of assessee and held that the income was not recognised on percentage completion method. The AO considered the assessee as owner of the project and concluded that income of Rs.4,00,00,000/- offered to tax in respect of work carried out in earlier year for Kalhar Project and not pertaining to year under consideration. The A.O. thereafter taxed income of Rs.9,06,83,708/- reported under the head “liabilities” while computing taxable income. Thus the AO also estimated the profit at 8% of WIP of Kings Square and made addition of Rs.35,45,480/-. Thus, total addition of Rs 9,42,29,188/- was made and demanded tax thereon.
CIT(A) deleted the addition. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the entire facts of assessee’s case under consideration are identical with facts of the other assessment years and there is no change in the modus operation of the business of the assessee. Therefore, respectfully following Co-ordinate Bench decisions in subsequent Assessment Year referred supra, entire addition made by the AO on account of business income of Rs.9,42,29,188/- is deleted.
