TMI Blog2022 (2) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... bills and copy of bank statement reflecting the amount of development expenditure had been submitted and which were duly examined by her. We find that the Ld. CIT-DR, except placing his reliance on the findings of the Assessing Officer, could not justify the addition made by the Assessing Officer. AO has made the addition towards undisclosed development expenses @ 300/- per sq. ft. in respect of the three colonies on guess work and surmises which was not justified as the addition was purely on the estimations in absence of any incriminating document found and seized during the course of the search and more so, without bringing any cogent and corroborative material or adverse evidence on record. Thus, the Ld. CIT(A) rightly deleted the addition made by the A.O. Therefore, we do not find any reason to interfere with the findings of the Ld. CIT (A). Accordingly, the action of the Ld. CIT (A) in deleting the additions is confirmed. - Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,77,58,500 77,84,503 99,73,997 02. Keshav Kunj 1,95,87,300 82,60,951 1,13,26,349 03. Keshav Ridhi Sidhi 2,06,08,200 49,06,592 1,57,01,608 Total Addition 3,70,01,954 4. Being aggrieved, the assessee preferred appeal before the ld. CIT(A) who allowed the appeal filed by the assessee and deleted the entire amount of addition. While passing the order, the Ld. CIT(A) considered the various documents as submitted by the asssessee and deleted the addition made by the Ld. A.O. as per the observation given by her in para 3.4 to 3.7 page 5 to 7 of the impugned order which read as under: - 3.4 I have gone through the assessment order, the appellant's submissions and the material on record. 3.4.1 The Assessing Officer has made the addition on account of development expenses incurred for the three colonies viz. `Keshav Vihar', `Keshav Kunj' 86 `Keshav Riddhi Siddhi' in the hands of the appellant. It is seen that the land in respect of the three colonies was owned by different individuals of the family who are all separately assessed to Income Tax. The lands on which these colonies have been developed were purchased/owned by different individuals an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of Keshav Vihar Colony in which various amenities were listed. The Assessing Officer has estimated that development cost in a colony with such amenities cannot be less than ₹ 300/- per sq. ft. This is definitely not a justifiable or acceptable approach. The entire estimation has been done in the hands of the appellant in assessment year 2012-13 which is again not acceptable as different family members owned the land and have incurred the development expenses in different assessment years which are duly reflected in heir books of accounts. It is pertinent to note that the Assessing Officer has not pointed out any discrepancy in the development expenses debited in ,th0 individual accounts of the different family members and not given any .logic for making the entire addition in the hands of the appellant only in A.Y. when development expenses have been incurred in different financial years in different colonies. In the colony Keshav Riddhi Siddhi the appellant himself does not even own any land and the entire land holding is in the hands of other family members. Also the development of this colony was incomplete on the date of the search. Further, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Project in the Asst Year 2011-12 , nd not in the AsstYear 2012-13. Similarly, development expenses for Keshav Kunj project was incurred in the Asst Year 2009-10 and 2010-11 and not in the Assessment Year 2012-13 . Hence, addition as made by the assessing officer in the hand of the assessee and that too in the Asst Year 2012-13 was also not correct. 1.3.3] That like wise for Keshav Ridhi Sidhi project development expenses were incurred in the Asst Years 2011-12 and 2012-13 and not only in the Asst Year 2012-13. Hence, the assessing officer was not justified in adding entire amount of addition to the development expenses in the Asst Year 2012-13 only. 1.4] It was submitted before the A.O. that the assessee and his family members have entered into an agreement with Shri Mukesh Sangai for development of colony. That papers related to development were also seized during the course of search by the Investigation Wing including that of Agreement. That all the Family members of the assessee have individually debited the Development expenses in their books of accounts. A Statement giving year wise development expenses incurred by all the assessee was filed before A.O. Copy of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01618 68694 2 Other outside investors 0.380 40900 27445 Total- B 0.38 40900 27445 Grand Total 1.33 Total Area in Sq Mtrs 133 1.5.4.2] That 13300 Sq Mtrs are total land area which was developed by the family members of the assessee and his brother's family not related to the assessee. That out of 13300 Sq Mtrs, 9500 Sq Mtr related to the family of the assessee and 3800 Sq Mtrs. of the family members of his brother family. 1.5.5] That on the basis of development expenses as incurred by the assessee in commensurate to the saleable area of plots in these three different colonies are as under:- S.No Name of the Colony Total Development Expenses Developed Area in Sq. Ft Development Cost per sq. ft. 1 Keshav Vihar 77,84,503 59,195 131.51 2 Keshav Kunj 82,60,951 65,261 126.58 3 Keshav Riddhi 49,06,592 68,694 71.42 1.6.1] That development expenses as estimated by the Ld. A.O. at ₹ 300/- Per Sq Fts was arbitrary, very excessive and without any basis. That all the three colonies which were developed by the family members of the assessee and by other outside members which are not related to the family of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has also filed copies of some of the sample Registry as made by him wherein the actual sale consideration as received by his group is also less than the ₹ 300/- per square ft., the development cost as estimated by the A.O. A statement justifying the said fact is enumerated as under:- Project:- Keshav Vihar Address:- Survey No.273 Mandsaur Coloniser:- Vinod Kumar Garg & other family member Year wise Detail of sale of plot Of Keshav Vihar F.Y. Date of Registration Name of Buyer Plot No. Area (In SQFT) Value Rate per Sq. Ft. 2010-11 29.03.2011 Mahesh S/o Arjundas Pamnani B-3 3105 741000 238.6 11.08.2010 Smt Kirtiben Kamal Sodani C-1 2990 584000 195.3 Project:- Keshav Kunj Address:- Survey No.311 Mandsaur Coloniser:- Vinod Kumar Garg & other family member Year wise Detail of sale of plot Of Keshav Kunj F.Y. Date of Registration Name of Buyer Plot No. Area (In SQFT) Value Rate Per Sq Ft. 2009-10 13.08.2009 Smt Ramadevi W/o Bherulal 108 600 128000 213 15.07.2009 Shantilal S/oBherulal& Naveen s/o Shantilal 107 720 159000 221 2010-11 28.02.2011 Smt Rajkumari Vinodkumar Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot justified in estimating the amount of development expenses and that too at ₹ 300/- Per Sq Ft which is higher than actual sale realization. 1.10.6] The assessee has also obtained a report from Chartered Engineer who has estimated the cost of development expenses incurred by the assessee and his group as under:- S.No Name of the Colony Total Development Expenses Developed Area in Sq. Ft Development Cost per sq. ft. 1 Keshav Vihar ₹ 69,12,000 59,195 116.76 2 Keshav Kunj ₹ 71,70,000 65,261 109.86 3 Keshav Riddhi ₹ 60,11,000 68,694 87.50 Thus the A.O. was totally wrong in estimating the Development expenses on estimated basis without going into details. The addition so made by the assessing officer on estimated basis requires to be deleted in full. 1.11.1] That on perusal of the assessment order it is evident that the AO has not pointed out any defect in the books /records / bills etc. and has not rejected books of account. That it is settled position of law that without rejecting the regular books of account as maintained by the assessee addition made on purely estimation is wrong. 1.11.2] That the assessee has suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO vs Smt Manju Rani Jain (2008) 24 SOT 24 (Del) has held ( Refer Para 10):- "10. In the instant case, undisputedly the assessee contended before the AO that the actual consideration received by the assessee should be taken as the market value of the properties sold and not the amount paid as stamp duty for the purposes of transfer of the properties because the same was on a higher side in view of the existing details and descriptions given by the assessee before the AO. Further, the assessee in accordance with provisions of s. 50C(2) of the Act requested the AO to refer the properties for valuation to the valuation cell of the Income - tax Department and adopt the same as full market value of the properties for working out the capital gains. The AO has not done so, hence, in our opinion, the CIT(A) on considering the provisions of s. 50C(2) of the Act has rightly directed the AO to refer the properties to the valuation cell of IT Department for the purpose of valuation of the property and, thereafter, adopt the valuation for working out the capital gains. Since, the direction issued by the CIT (A) is in accordance with the provisions of s. 50C of the Act, we find no illegality o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 250/- per sq. ft. The sale value as declared by the assessee and the other family members in respect of the sale of plots have been accepted and no adverse view has been taken on that account. It was also explained to us that the sale of plots has been executed as per the prevailing market rates and in most cases there was no difference in the sale consideration received and the value adopted for stamp duty purposes. Thus, we are of the view that in that case, there was no justification for estimating the development expenses at ₹ 300/- Per Fts. It was also brought to our notice by the learned Counsel for the assessee that the Ld. A.O. has made the entire estimation of development expenses in the hands of the assessee only and that too, in single year i.e. Assessment year 2012-13. We, on perusal of the details as filed, find that it is evident that development of Keshav Kunj colony was completed in the Asst Years 2009-10 and in the Asst Year 2010-11 only and development of Keshav Vihar Colony was completed in the Asst year 2011-12 and therefore there was no justification for adding any amount on account of development expenses in the Asst Year 2012-13. In view of the above f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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