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2015 (12) TMI 831 - HC - Income TaxAddition on account of alleged excess cost of construction - as per AO cost should be taken at ₹ 511 per sq. ft. as against ₹ 750 per sq. ft. shown by the Assessee - ITAT confirmed AO order - Held that:- An authentic determination of the cost of construction for the flats which were sold during the AY 2010-11 is not available in the record. Dr. Rakesh Gupta, learned counsel for the Assessee, states that the Assessee has in its possession all the relevant records which it is prepared to produce for determining the cost of construction in any manner that may be considered appropriate so that an arbitrary figure is not adopted. In the considered view of the Court, the approach adopted by the ITAT in the matter was possibly not the best way of going about determining whether the CIT (A) was in error in adopting the figure of ₹ 700 per sq.ft. as the cost of construction of the flats in question. One method was to insist on a proper report of valuation taking into account the books of accounts maintained by the Assessee himself. The alternative method of taking the figure for 2008 and applying to it a 'mark up' by the cost inflation index should normally be resorted to when the Assessee is unable to produce its books of accounts or documents. Where it is prepared to do so, as in the present case, the former method should be adopted. In view of the statement made by the counsel for the Assessee before this Court, the Court is of the view that the ITAT should re-examine the above issue on merits by calling for a report of valuation by any approved registered valuer as may be considered appropriate by the ITAT. The ITAT will issue appropriate directions regarding the production by the Assessee of its records relevant to the issue of determination of the cost of construction of the flats sold during the AY in question.
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