9911796707
TMI Blog2015 (12) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee could not adduce any evidence in support of its estimate of cost of construction and no valid reason could be assigned by the CIT(A) while giving substantial relief to the assessee and there was some basis for arriving at the cost of construction at ₹ 511/- per sq.ft. by the Assessing Officer on the basis of the assessee’s own valuer report - Decided in favour of revenue Estimating the net profit rate of 15% of gross contract receipts - Held that:- he addition was made by estimating the net profit rate of 15% of gross contract receipts minus 8% of contract receipts by the Assessing Officer. We find that there was no basis for estimating the profit by applying the net profit rate of 15% and, accordingly, we hold that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chartered Engineer for the year of construction of 2008 and the cost of construction was arrived at by the valuer at Rs. 5,500/- per sq.mtr. i.e. Rs. 511 per sq.ft. He submitted that the flats sold in the FY 2009-10 were, in all likelihood, constructed during the FY 2008-09 and, therefore, the Assessing Officer adopted the same value as per assessee s valuer at Rs. 511/- per sq.ft. The learned DR submitted that the CIT(A) has enhanced the same at Rs. 700/- per sq.ft. without giving a single valid reason for the same. He submitted that the assessee has adopted the method of cost of construction by deducting the profit margin of 10% from the sale price of the flats sold by it and the balance has been shown as cost of construction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery by the Bench, the learned counsel for the assessee submitted that Accounting Standard No.7 of the Institute of Chartered Accountants of India was only partly complied with. The assessee is maintaining regular accounts and its accounts are being audited. In these facts, we are of the view that the assessee should have come forward with some reasonable basis for estimating its cost of construction of the flats sold during the year. No such exercise was undertaken by the assessee on the pretext that it is not possible to do so. The Assessing Officer has provided opportunity to the assessee pointing out that this method of cost allocation is arbitrary and is not permissible under the Income-tax Act, but still, the assessee could not provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case, the ld.CIT(A) has erred in deleting the addition of ₹ 1,16,340/- made by the Assessing Officer after recording proper reason thereof in the assessment order itself. 7. Learned DR submitted that this case is not covered by the provisions of Section 44AD of the Act and, therefore, the addition was wrongly deleted by the learned CIT(A). 8. Learned counsel for the assessee submitted that the assessee never claimed for application of Section 44AD of the Act and the addition has been made only for the sake of addition. He relied on the order of the learned CIT(A). 9. We have considered the rival submissions and have perused the order of the Assessing Officer and the learned CIT(A). We find that the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
