2011 (11) TMI 778 - HC - Income Tax

Summary

Issues involved:
1. Correctness of method of accounting u/s 145(1)
2. Deletion of addition on sale price of properties
3. Re-working cost of land in Qutub Enclave Complex
4. Deletion of addition on contribution to Shelter Fund
5. Treatment of rent receipts from DLF Centre

1. Correctness of method of accounting u/s 145(1):
The Income Tax Appellate Tribunal was questioned on setting aside the Commissioner of Income Tax (Appeals) order regarding the method of accounting followed by the assessee. It was debated whether the correct income could be detected from the accounts and if the Assessing Officer was justified in invoking the provisions of the First Proviso to Section 145(1) of the Income Tax Act, 1961. The Tribunal's decision was under scrutiny in this regard.

2. Deletion of addition on sale price of properties:
Another issue raised was the deletion of the addition made by the assessing officer on account of sale price concerning constructed/built-up properties. The correctness of the Income Tax Appellate Tribunal's decision in this matter was being examined.

3. Re-working cost of land in Qutub Enclave Complex:
The Assessing Officer and the Commissioner of Income Tax (Appeals) were questioned on the correctness of re-working the cost of land at the average purchase price in Qutub Enclave Complex, now known as DLF city. The method involved dividing the end of the year by saleable area, including lands earmarked for various community buildings in each phase.

4. Deletion of addition on contribution to Shelter Fund:
The Income Tax Appellate Tribunal faced scrutiny for deleting the addition made by the Assessing Officer on account of contribution to the Shelter Fund. The correctness of this deletion was being evaluated.

5. Treatment of rent receipts from DLF Centre:
Lastly, the Commissioner of Income Tax (Appeals) was questioned on directing the Assessing Officer to assess the rent receipts from DLF Centre, which included air conditioning charges, as 'Income from House Property'. The legality of this directive was being examined.