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TMI Blog2021 (9) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... s under. 1.1. Brief facts of the case for the A.Y.2013-14 are that the assessee had filed his return of income declaring total income of Rs. 2,05,60,960/- and agricultural income of Rs. 1,28,900/-. Since the return of income was filed beyond the due date for filing the returns of income, the Assessing Officer (AO) issued notice u/s 148 and taken up the case for assessment. During the course of scrutiny proceedings, the AO found that the assessee was the co-owner of land admeasuring 1.45 acres located at old survey No.318/3A1, New Survey No.318/3A1B, 318/3A1C, 318/3A1D &318/3A1E, Nolambur village, Ambattur Taluk, Thiruvallur District of Tamilnadu. Out of total land holding of 1.45 acres, the assessee owns 0.45 acres. The assessee along with other co-owners have entered into development agreement with M/s BBCL Vajra (promoters), No.20, Mylai Ranganathan Street, T.Nagar, Chennai for their land admeasuring 1.45 acres for residential and commercial development. As per the Joint Development Agreement (JDA) entered into between the land owners and the promoters, the land owners were entitled for 1/3 share of super built up area and the promoters were entitled for 2/3 share of the super b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstructed space. The Ld.CIT(A) viewed that since the assessee was entitled for 1/3rd of constructed area along the car parking, he retained the 1/3rd share of land and transferred the 2/3rds of land which works out 13,608 sq feet to the promoters. Thus, the Ld.CIT(A) held that having transferred the entire land in lieu of 1/3 share of built up space, the AO is incorrect in taxing the entire area of 19602 sq.ft instead of 13068 sq.ft which was transferred to the developer. Since the assessee has retained 1/3 share and transferred 2/3 share to the developer, the Ld.CIT(A) held that only the sale consideration of 13608 sq.ft needs to be brought to capital gains tax, after deducting the cost of acquisition. Accordingly directed the AO to compute the capital gains. 2.1. With regard to the proportionate share of development charges, after having gone through the JDA, the Ld.CIT(A) observed that the FSI and other expenditure is intrinsically related to the project, therefore, it is nothing but the cost of improvement, hence directed the AO to allow the pro-rata expenses of Rs. 5.18 crores and recompute the capital gains accordingly. 3. Against the order of the Ld.CIT(A)the department ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of car parking. Thus, it is clear that out of the total land transferred to the developer, the land owners were entitled for 1/3rd share of land. What was transferred to the developer was only 2/3rds of the land, but not the entire land as rightly observed by the Ld.CIT(A). Therefore, what is to be brought to tax under capital gains is 2/3rd of land area, but not the entire land. Thus, the Ld.CIT(A)has rightly directed the AO to adopt 2/3rd of 19602 sq.ft instead of 19602 sft. adopting the SRO rate of Rs. 5,500 per sq.ft which worked out to 13068. Hence, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. The appeal of the revenue on this ground is dismissed. 5. The next issue is with regard to pro-rata development expenses of Rs. 5.18 crores out of total expenditure of Rs. 16,72,00,000/-incurred for the project towards additional FSI and development charges. As per the agreement, the assessee has to bear 2/3rd of development and FSI charges. However, due to delay in handing over the site, on the demand made by the developer, the landowners have paid the entire development and additional FSI charges which was not disputed by the AO. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequent withdrawal and relied on the decision of ITAT Hyderabad Bench in the case of Mir Basheeruddin Ali Khan Vs. ITO, Ward- 6(3), Hyderabad. Reported in [2014] 42 taxmann.com 69 and made the addition u/s 69 of the Act. 8. Against which the assessee went on appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition made by the AO. Against which the assessee is in appeal before this Tribunal. 9. We have heard both the parties and perused the material placed on record. The assessee has furnished the details of withdrawals made from the bank and the department did not make out a case that the assessee has spent the above amounts for personal purposes or otherwise made the investments. The AR relied on the decision of this Tribunal in the case of Mandava Ravi Kumar in ITA No.184/Viz/2015 dated 25.07.2018, wherein, on similar facts, this Tribunal has allowed the appeal of the assessee relating to cash deposits made in the bank. Merely because, the assessee has withdrawn the amounts subsequently, the AO cannot disbelieve the source of cash and it is a fact that a sum of Rs. 3,50,000/- withdrawn by the assessee and is available to make use of the same. The case law of Mir Bashee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT confirmed the addition. In the cited case, cash deposit of Rs. 6,50,000/- made on 08.09.2014 was stated to be out of periodical withdrawals made by the assessee from February 2002 to September, 2003 and there was time gap of more than one year and the cash was not withdrawn at one go. In the instant case, the assessee has withdrawn the money at one go on 13.10.2012, which was later deposited. Thus, keeping in view the explanation of the Ld.AR that the assessee kept the cash for some time to meet the unforeseen expenses appears to be satisfactory and the facts of the case relied upon by the AO is distinguishable. This Tribunal in the case of Mandava Ravi Kumar supra on similar facts accepted the source of earlier withdrawals for deposits made in the bank account. Therefore, respectfully following the view taken by the Tribunal, we hold that the explanation of the assessee that the deposits were made out of earlier withdrawals is acceptable. Accordingly, we delete the addition made by the AO and allow the appeal of the assessee. In the result, appeal of the assessee is allowed. 13. In the result, appeal of the revenue and cross objections of the assessee are dismissed and the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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