9911796707
TMI Blog2013 (10) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 143(3) dated 13th December, 2007 and the income was assessed at Rs.18,89,850/-. Subsequently, reassessment proceedings were initiated and additions of Rs.1,69,88,383/- and Rs.1,50,00,000/- were made. Addition of Rs.1,69,88,383 3. The respondent-assessee vide sale deed dated 25th November, 2004 had sold the second and third floor of a property under construction to Uttam Enterprises for consideration of Rs.5,67,70,000/. For the purpose of computing capital gains, the assessee had taken the cost of construction at Rs.5,65,72,958/- and capital gains of Rs.1,97,041/- was disclosed and accepted in the original assessment. 4. The Assessing Officer in reassessment order observed that as per the valuer's certificate, the total cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o declare capital gains. The AR has clarified that the amount actually incurred upto 31.3.05 was Rs.3,95,84,575/-. The projected cost of construction of 2nd and 3rd floors was Rs.5,65,72,958/- as per 2nd valuation certificate. This amount includes the amount of Rs.3,95,84,755/- spent already by 31.3.2005. 8.5. Following the matching principle, the projected cost at Rs.5,65,72,958/- was deducted while computing the capital gains. 8.6. There are two valuation certificates. One certificate dt. 4.4.2005 deals with the actual amount spent on the entire project. The total amount actually spent on the entire project was Rs.12,96,24,057/- which includes cost of Rs.3,95,84,575/- spent on 2nd and 3rd floors." 8.7. In the second certificate dt. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g taxed in the year in question. Actual cost incurred on construction has to be deducted from the consideration received. This is the basis/foundation of the order of the Commissioner (Appeals) and the tribunal. Addition of Rs.1,69,88,383/- cannot be justified on the ground that as on 31st March, 2005, the assessee had incurred expenditure of Rs.3,95,84,575/-. During the course of hearing we had asked counsel for the Revenue whether the property in question was under construction when the sale deed was executed? Learned counsel for the Revenue states that as per the sale deed, the property in question was under construction. Before us and the tribunal, it is not alleged and argued that the actual cost incurred was different or less. Break-u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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