DIAMOND INVESTMENT & PROPERTIES Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) Heard Mr. R.V. Desai, learned Senior Advocate appearing on behalf of the Appellant-Assessee and Mrs. S.V. Bharucha, learned Counsel appearing on behalf the Revenue.

(2.) We have perused the order passed by the Assessing officer, Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal.

(3.) In submission of Mr. Desai, this appeal raises at least four substantial questions of law. He submitted that in so far as the sale transaction with one M/s. Rajkiran Properties & Investments Pvt. Ltd. and M/s. Concord Shipping Pvt.Ltd., the Assessing officer and the Income Tax Appellate Tribunal have committed an obvious error in overlooking the fact that M/s.Rajkiran Properties & Investments Pvt.Ltd. has paid the entire sale price/consideration prior to commencement of construction or rather in advance. Therefore, in so far as that entity is concerned, the appellant was justified in charging reduced rate and below the market value. In so far as M/s.Concord Shipping Pvt.Ltd. is concerned, the said company did not avail of such a benefit but decided to postpone or defer the payment of total sale price/ consideration. In the case of that entity, therefore, the price had to vary. There was nothing suspicious leave alone doubtful about such dealings and they are well-known in the market. Therefore, in the present proceedings the Assessing officer and ITAT were not justified in holding that both the sales are not genuine and an attempt to suppress the real income and based on which the tax has to be computed.