DCIT Vs HB Estate Developers Limited (ITAT Delhi)
ITAT Delhi dismissed the Revenue’s appeal against deletion of an addition of Rs. 2,81,87,500 made under Section 68 of the Income Tax Act for AY 2010-11. The assessee had earlier booked five units measuring 2,000 sq. ft. each in an IT Park at Gurgaon and paid booking/registration amount of Rs. 24,37,500. During the relevant year, booking rights in the properties were sold to Signature Max Propbuild Pvt. Ltd. The disputed amount was reflected as sales in the assessee’s financial statements and return of income, and the resultant profit of Rs. 2,57,50,000 was offered to tax.
The Tribunal noted that the transaction was a sale of stock-in-trade and was not a case involving receipt of share application money, share capital, share premium, loan, gift or another tax-free receipt. The CIT(A) had found that the sale consideration was already credited to the profit and loss account and that the resultant profit had already suffered tax. Accordingly, treating the very same receipt as an unexplained cash credit under Section 68 would not be sustainable. The Tribunal also noted that the Assessing Officer had neither rejected the assessee’s books of account nor rejected the sales recorded therein.
