Sale of stock-in-trade taxable when consideration received and possession handed over, not on deed registration.

ORDER 

Per: Anikesh Banerjee (JM):

The instant appeal of the revenue filed against the order of the NFAC, Delhi [for brevity ‘the Ld. CIT(A)’], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2018-19, date of order 04.04.2025. The impugned order emanated from the order of the Ld. Assessment Unit Income Tax Department (for brevity the ‘Ld. AO’), order passed under section 147 r.w.s. 144B of the Act date of order 22.03.2024.

2. The revenue has taken the following grounds:

“1. "Whether on the fact and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 108134530/-made on account of Profits and gains from Business of the assessee on sale of the property for the relevant Assessment year?"

2. "Whether on the fact and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made on account of sale of immovable property despite of information on Insight Portal regarding assessee having carrying out transaction relating to sale of immovable property which remained unexplained due to assessee failing to furnish its return of income in the A.Y 2018-19 and the same has escaped assessment?"

3. "Whether on the fact and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made on account of Profits and gains from Business of the assessee on sale of the property, despite of assessee's admitting the fact during the assessment proceedings that no business activity was carried on, except the sale of immovable property by the assessee and ignoring the AO's finding that the books have not been audited for F.Y. 2013-14, no return was filed and no income was offered or loss was declared for A.Y. 2014-15 relevant to F.Y. 2013-147"

4. The appellant craves leave to amend or alter or add a new ground which may be necessary.”

3. The brief facts of the case are that on basis of the information available with department the Ld. AO initiated the proceeding u/sec. 147 and accordingly notice u/sec. 148 was issued. During the assessment proceeding the Ld. AO found that the assessee made the transactions a project for redevelopment of existing IT Park. The assessee is a partnership firm and carried of a business Real Estate Developer. The project was taken for redevelopment of existing IT Park. The agreement for redevelopment of project was entered with landowner in 2008 and having share ratio of area 58% for developer that is the assessee and 42% for landowner in the redevelopment property. All the cost for construction as a developer were to be borne by the assessee firm and in lieu of the same the assessee was entitled to sell located area is 58%of the unit available as stock in the said redevelopment. Accordingly the assessee completed the construction of the said new building in accordance with sanctioned building plans initiation of disapproval (10D) the assessee issued the copy of certificate bearing No.31.03.2012 dated in respect of new building. Copy of the completion certificate was duly filed before the Ld. CIT(A). In and around 2014-15 dispute arouse amongst the partners and it was settled in the Hon'ble High Court of Bombay. The assessee’s claim is that the entire transaction was made in earlier years including the issueance of possession certificate to the buyer of the property. But Ld. AO considered the alleged amount as income in impugned assessment year and added back with total income. Aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) deleted the addition and upheld the ground of appeal petition. Being aggrieved the revenue filed an appeal be