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2021 (9) TMI 958 - AT - Income TaxComputation of capital gain - JDA - as per CIT-A 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 - HELD THAT:- As per the JDA, land owners were entitled for 1/3rd share of constructed area along with 1/3rd share 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. CIT(A) has rightly directed the AO to adopt 2/3rd of 19602 sq.ft instead of 19602 sft. adopting the SRO rate of ₹ 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. Pro-rata development expenses disallowance - HELD THAT:- It is a fact that the landowners have paid the development charges, additional FSI and other expenditure related to the project. The said development charges were intrinsically related to the project land. The benefit on account of additional FSI would accrue to the landowners also. Thus, the land owners have transferred the bundle of rights for constructing the residential cum commercial project including additional FSI, which is nothing but cost of improvement. Once it is agreed that the additional FSI and development charges are in the nature of improvement, the same required to be allowed as deduction. It is not the case of the department that both land owners and the promoters have claimed the expenditure - AO is incorrect in holding that the development charges and additional FSI charges are neither related to transfer nor cost of improvement. We are of the considered view that the amount of the expenditure on the project on account of development and additional FSI needs to be considered as cost of improvement and the assessee would be entitled for deduction of ₹ 5.18 crores out of ₹ 16.72 crores as observed by the Ld.CIT(A). Thus the deduction is covered in Section 48 of the Act, hence, we do not find any reason to interfere with the order of the CIT(A) and the same is upheld. Appeal of the revenue on this ground is dismissed. Cash deposits as unexplained and made addition u/s 69 - HELD THAT:- In the instant case the assessee had withdrawn the amounts in the immediately preceding year on six occasions. Thus the facts of the case law relied up on by the AO is distinguishable and has no application to the instant case, therefore, we are of the view that the assessee’s case is squarely covered by the decision of this Tribunal in Mandava Ravi Kumar [2018 (7) TMI 2207 - ITAT VISAKHAPATNAM] and accordingly, we set aside the order of the Ld.CIT(A) and delete the addition made by the AO. The appeal of the assessee is allowed. Unexplained cash deposits - A.Y.2014-15 - source of the cash was explained to be withdrawals made from the bank account on 13.10.2012 - HELD THAT:- 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 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 [2018 (7) TMI 2207 - ITAT VISAKHAPATNAM] on similar facts accepted the source of earlier withdrawals for deposits made in the bank account - 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.
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