TMI Blog2022 (2) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - ITA No.126/Ind/2017 - - - Dated:- 5-1-2022 - Shri Mahavir Prasad, Hon'ble Judicial Member And Shri Manish Borad, Accountant Member For the Revenue : Shri P.K. Mitra, CIT-DR For the Assessees : S/Shri S.N. Agrawal Pankaj Mogra, CAs ORDER PER MANISH BORAD, A.M Vinod Garg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of Colony Development Expenses estimated by the A.O. (A) Development Expenses incurred by the assessee as per books (B) Amount added by the A.O. towards Development expenses [ A B] 01. Keshav Vihar 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the colonies. The said agreements were also seized during the course of the search. The fact that the development expenses have been incurred through the contractor was clearly explained to the Assessing Officer. All the different individuals have debited the development expenses in their books of accounts. The statement giving year wise development expenses incurred by the different individuals was furnished during the course of assessment proceedings. During the appellate proceedings the copy of ledger accounts of the development expenditure along with the relevant bills and copy of bank statement reflecting the amount of development expenditure has been submitted. 3.4.3 Most of the plots in these colonies have been sold between ₹ 200/-to ₹ 250/- per sq. ft. The sale value as declared by the appellant and the other family members in respect of the sale of plots has been accepted and no adverse view has been taken on that account. It is submitted 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. 3.5 Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs of Ld. CIT (A). Ld. Counsel for the assessee also relied upon the written submission which is reproduced as under:- 1.1] That in the only ground of appeal the department has challenged the Addition made by the A.O. of ₹ 3,70,01,954/- on account of Undisclosed expenses incurred on development of 3 colonies but deleted by the Ld. CIT(A). 1.2] That as submitted above the assessee along with his other family members has developed following three colonies at Mandsaur:- S.No Name of the Colony 1 Keshav Kunj 2 Keshav Vihar 3 Keshav Riddhi 1.3.1] That year wise development expenses incurred by the assessee and his family members are as under:- S.No Name of Colony Year-wise Development Expenses incurred by the assessee and his Family members A.Y. 09-10 A.Y. 10-11 A.Y. 11-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is enclosed for your honour kind perusal. 1.5.1] That all the expenses incurred towards development of colony has duly been accounted for by the Group in their individual Books of Accounts. 1.5.2.1] It was submitted before the Ld. A.O. that Keshav Vihar Colony is developed by the following persons which includes three members of the assessee and three other outside members. Detail of the same is as under:- S.No Name of the Owner Area in Hectare Total area in Sq Fts Saleable area in Sq Fts 1 Vinod Ku Garg Other Family members 0.706 75994 59195 Total- A 0.706 75994 59195 2 Other Investors not related to the assessee's family 1.320 142085 88421 Total- B 1.320 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and his wife which was even not developed. 1.5.4.1] It was submitted before the Ld. A.O. that Keshav Ridhi Sidhi Colony which is developed by the following persons which includes five members of the family of the assessee and two members of his brothers family. Detail of the same is as under:- S. No Name of the Owner Area in Hectare Total area in Sq Fts. Saleable area in Sq Fts. 1 Shri Vinod K Garg other Family Members 0.950 101618 68694 Total- A 0.950 101618 68694 2 Other outside investors 0.380 40900 27445 Total- B 0.38 40900 27445 Grand Total 1.33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory on the part of the assessing officer. That when he himself accepted sale consideration of plot between ₹ 200/- and ₹ 300/- in that case he was not right in estimating the development expenses of ₹ 300/- Per Sq Fts in addition to the cost of land. 1.6.3] The assessing officer while making addition to the development cost observed that detail and basis of development expenses were not provided by the assessee and therefore the assessing officer has no option except for estimation. The said version of the assessing officer was not correct. Since, the assessee during the course of search assessment proceeding has explained that entire amount of development expenses were incurred by him through the contractor. That considering the location of the plot where developed plot was sold between the range of ₹ 200/- to ₹ 300/-, the estimation of development expenses at ₹ 300/- was exorbitant and very excessive. That in case of search assessment, the assessing officer was not justified in adding any amount to the income of the assessee on presumption basis. The assessing officer has not found anything incriminating in nature which need to be adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 36 1800 515500 286 17.01.2011 Smt Vishni W/o Ghanshyam 82 900 234500 261 Project: - Keshav Riddhi Address:- Survey No. 504, Bhuniyakhed Mandsaur Coloniser:- Vinod Kumar Garg other members Year wise D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.10.5] The when the assessee has entered into an development agreement with Shri Mukesh Sangai and the amount of development expenses as incurred by them was properly accounted for. In that case the assessing officer was not 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 68,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting reply of all the queries arouse in our minds as well as raised by the parties is that the matter should be restored back to the file of the learned AO with a direction that he shall refer this matter of valuation in the light of sub-s. (2) of s. 50C to the DVO for determining the consideration of this plot sold by the assessee under s. 50C of the Act. The other connected grounds are also related to this main ground. Therefore, the entire appeal is restored back to the file of the AO with the direction that he would do as directed above and also give opportunity of hearing to the assessee as per law. 1.12.2] Hon ble Delhi bench of ITAT in the case of ITO 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Ld. CIT(A), the copies of ledger accounts of the development expenditure along with the relevant 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. We have also carefully perused the various documents filed by the assessee which were available before the Ld. A.O. as well as CIT (A). Learned Counsel for the assessee drew our attention to the fact that most of the plots in these colonies had been sold between ₹ 200/-to ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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