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2015 (8) TMI 1142 - AT - Income TaxReopening of assessment - Held that:- There is no merit in the contentions of the assessee. As pointed out by the ld. DR that the AO has reopened the assessment, inter-alia, with regard to the income arising on sale of other assets. The AO has also made addition with regard to the sale of assets, and hence, we are of the view that the reopening has been done in accordance with law. Accordingly, we reject the contention of the assessee in this regard. - Decided against assessee. Disallowance out of electricity charges - Held that:- We notice that the electricity charges of ₹ 7980/-pertain to residence of the assessee. Though the assessee has contended that he was using the residence as his office, yet no proof whatsoever was placed before us to substantiate the same. Under these circumstances, we are of the view that the ld. CIT(A) was justified in confirming the addition of ₹ 7980/- towards electricity charges.- Decided against assessee. Disallowance of telephone expenses - Held that:- We notice that the assessee has claimed a sum of ₹ 1,03,939/- in aggregate as telephone expenses, which included residential phone also and the AO has disallowed 20% of the same towards personal use. Considering the activity of the assessee, we are of the view that the disallowance of 20% of the aggregate amount of telephone expenses is on higher side. Accordingly, we modify the order of ld. CIT(A) on this issue and direct the AO to restrict the disallowance to 10% of the telephone expenses claimed by the assessee. - Decided partly in favour of assessee. Assessment of profit on plot no.42 - Held that:- The undisputed facts remains that the assessee has completed the project carried on plot no.42. However, while estimating the profit on the said project, the AO allocated administrative expenses equally on all the three projects viz Plot No.42 (which is completed), Plot No.57 and Plot No.76 (under progress). Under these set of facts, we are of the view that the AO was not justified in allocating the administrative expenses equally between all the three projects. Since the assessee has been selling flats constructed on Plot No.42, naturally he would have spent more time and energy in respect of this project. Accordingly, we are of the view that the major portion of the administrative expenses should be allocated to Plot No.42. Considering the status of each of the project, we are of the considered view that the allocation of administrative expenses would meet ends of justice, if it is allocated in the following manner, Plot No.42 70%, Plot No.57 20% and Plot No.76 10% Accordingly, we set aside the order of the ld. CIT(A) on this issue and direct the AO to recompute the profit on construction of flats on Plot No.42 by adopting the administrative expenses in the ratio cited above.- Decided partly in favour of assessee Profit from construction on flats on plot Nos. 57 and 76 - assessment of profit at 11 % - Held that:- AR submitted that both the projects are at initial stages and hence no profit need to be estimated. However, the ld. AR failed to show about the stage of completion of project. In the absence of the details, we are not able to appreciate the contention of the ld. AR. At the same time, we notice that the estimate of profit from WIP made by the AO at 11% is on the higher side. Accordingly, we modify the order of ld. CIT(A) and direct the AO to estimate the profit from WIP of Plot Nos.57 and 76 at 8% of the WIP. While computing the WIP, the AO should adopt the figure of administrative expenses as per our direction given in the earlier paragraph. - Decided partly in favour of assessee.
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