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TMI Blog2015 (8) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... ed certain extra amenities in respect of 18% of super built area to be delivered to the assessee for which the assessee has paid a sum of ₹ 90,55,695/- which also came to be allowed by the Assessing Officer. The cost of construction having been agreed upon between parties at ₹ 800/- per sq. ft. and same being the full value of consideration which was agreed to between the parties and which was not rejected by the Assessing Officer by assigning reasons, same ought to have been accepted. We are of the considered view that amount of ₹ 1,40,00,000/- paid to the land lord to be accepted as part of actual construction and as such we are of the view that the finding arrived at by the Appellate Commissioner at Paragraph 6 by holding payment of ₹ 1.40 crores made to owner and amount paid to assessee to vacate the premises had nothing to do with the construction and it is also held that same is in consonance with the Tripartiate Agreement entered into between the parties and in that view of the matter it is to be held that the Appellate Authorities were correct in holding that the addition of ₹ 56 lakh made by the Assessing Officer on the basis of project cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1,76,88,000/- by taking the cost of construction of 22,110 sq.ft. at ₹ 800/- per sq.ft. by the Assessee. However, the Assessing Officer, after obtaining information from the builder with regard to the cost of construction which was indicated by the builder to be at ₹ 19,42,79,237/-, adopted the same for the purposes of arriving at the correct capital gains and accordingly made certain additions by adopting the value as indicated by the builder. Thereafter a tax demand was raised on the assessee, who being aggrieved by the said order of assessment filed an appeal before the CIT (Appeals). Appellate Commissioner after having noticed that the dispute was with regard to calculation of value of gross consideration received by the assessee held that advertisement cost, extra amounts paid to land lord and the assessee are not part of actual cost of construction. Hence, the capital gains as shown and calculated by the assessee came to be accepted and addition of ₹ 53,26,567/- made by the Assessing Officer came to be deleted. 4. Revenue carried the matter in appeal before the Tribunal which did not find favour and accordingly it was held that Long Term Capital Gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income filed by the assessee, the valuation as indicated in the agreement dated 23.8.2001 clearly indicated the basis for calculation of capital gains and the cost of construction having been indicated at ₹ 800/- per sq ft., proportionately in respect of 18% of total construction to which the assessee was entitled was calculated and adopted for the purposes of long term capital gains and it is not the value of construction which was adopted by the builder which would be the basis and hence he submits that finding recorded by the Appellate Commissioner as well as the Tribunal is not liable to be interfered. He would also submit that under Section 45 of the Act, the computation of capital gains is to be made and for the said purpose Section 48 of the Act requires to be looked into which would indicate that for the purposes of arriving at the valuation, it is full value of consideration as agreed to between the parties which has to be taken into consideration. Hence, he submits that substantial questions of law be answered in favour of the assessee by rejecting the appeal of the Revenue. 8. This Court has admitted the appeal to consider the following two substantial questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer at ₹ 3,49,70,263/- and accordingly, the additions came to be made. 12. The core issue relates to calculation of gross consideration received by the assessee. A perusal of the assessment order would clearly indicate the calculation in respect of cost of construction made by the assessee has not been rejected by the Assessing Officer. However, he has substituted a different mode viz. adopted different valuation i.e., project cost valuation on the basis of cost of construction indicated by the builder in its books of accounts and same has been taken into consideration as the total project cost. In fact, Appellate Commissioner has noticed that the ledger account of the developer as on 31.3.2005 was also indicating that ₹ 1,42,84,405/- was the expenses booked on account of advertisement charges incurred and which had been paid by developer towards cost of construction and developer had also taken into consideration the amounts paid to the assessee for vacating the premises and the amount paid to the land lord towards cost of construction or project. On the said basis it has been held that these amounts would not form part of cost of construction. The non-refundable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also been included in the said valuation. In fact it requires to be noticed at this juncture itself that developer has provided certain extra amenities in respect of 18% of super built area to be delivered to the assessee for which the assessee has paid a sum of ₹ 90,55,695/- which also came to be allowed by the Assessing Officer. 14. The cost of construction having been agreed upon between parties at ₹ 800/- per sq. ft. and same being the full value of consideration which was agreed to between the parties and which was not rejected by the Assessing Officer by assigning reasons, same ought to have been accepted. We are of the considered view that amount of ₹ 1,40,00,000/- paid to the land lord to be accepted as part of actual construction and as such we are of the view that the finding arrived at by the Appellate Commissioner at Paragraph 6 by holding payment of ₹ 1.40 crores made to owner and amount paid to assessee to vacate the premises had nothing to do with the construction and it is also held that same is in consonance with the Tripartiate Agreement entered into between the parties and in that view of the matter it is to be held that the Appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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