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TMI Blog2015 (8) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 69C - Tribunal held that the addition of difference in cost of construction based on DVO's valuation report made by the Assessing Officer under Section 69C cannot be sustained - Held that:- The value adopted for the purpose of executing sale deeds to convey the undivided share of right in the land was only for the purpose of registration, which is evident from the fact that the guideline value was adopted by the assessee to register such documents. It is to be seen therefore that the consideration paid by the buyers of the apartments is wholesome consideration for a dwelling unit. The Assessing Authority has no case that the assessee had received any consideration in excess of the consideration reflected in the registered documents and in the books of accounts. No buyer has ever told the Assessing Officer that he has paid something more to the assessee than what was stated in the accounts. Therefore, there cannot be a case that the assessee had spent something more and realized something more from the buyers. When such a case is not possible, there is no basis for dissecting the superstructure from the wholesome transaction and attempt to adopt a different valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concern thereafter. 5. On 24.1.1981, the respondent purchased an additional land of an extent of about 1 acre, which was adjoining the land that was already owned. In this process, the respondent became the owner of a land of an extent of about 2 acres. 6. Out of the said land, the respondent sold an extent of about 25,000 sq.ft., to Life Insurance Corporation of India in the year 1991-92. The remaining portion of the land was sold by the respondent to various persons under several registered sale deeds during the period 1999-2000, by way of undivided shares. The purchasers of those undivided shares of the remaining extent of land got flats constructed for themselves on the remaining extent of the land. 7. The income derived out of this activity was returned by the respondent, as a business income, from the assessment year 2003-2004 onwards. But, pursuant to a survey held on 5.2.2004 under Section 133A and the information collected therefrom, the Department issued a notice under Section 148 alleging that there was income that had escaped assessment. 8. Thereafter, an order was passed on 29.3.2006 under Section 143(3), holding that the income derived by the respondent f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee had developed the land to the extent of 1 acre as provided in Section 80IB(10) ? and (c) Whether on the facts and in the circumstances of the case, the Tribunal was right in considering the fact that one of the housing unit was above 1,500 sq.ft., violating the limit prescribed under Section 80IB(10)? 12. The answer to questions (iii)(a) to (iii)(c) in relation to assessment years 2003-2004 and 2004-2005 would depend directly upon our answer to question (i) in relation to the assessment years 2000-2001 to 2005-2006. Therefore, we shall take up for consideration the first question that relates to the issue as to whether the sale of undivided share in land by the assessee could be treated as a business income or not. 13. The facts, which we have narrated in the first part of this order would show that the respondent was originally a partnership firm, which purchased a land as part of its business asset. After the retirement of two partners and the firm became a sole proprietary concern, the respondent became the sole proprietor and he acquired the adjoining land for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne representing the value of the undivided share of land and the other representing the cost of construction. Paragraphs 23 and 24 of the order of the Tribunal in this regard read as follows : 23. The next point to be considered in the appeals filed by the Revenue is the addition of ₹ 1,39,08,127/- made by the Assessing Authority for the assessment year 2003-2004 under Section 69C towards under-statement of cost of construction. The basis of making an independent valuation of the superstructure itself has been attempted by the Assessing Authority on the premise that the project of the assessee constituted two transactions, namely the sale of land and thereafter construction of apartments. Upholding the order of the Commissioner of Income Tax (Appeals), we have already held that there was no two different transactions in the sale of apartments and the assessee had sold the apartments along with the undivided share of right in the land and the project undertaken by the assessee was a composite project and particularly a housing project. When it is found that there are no two different transactions, there is no basis for making an independent valuation of the superstructure. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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