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2017 (5) TMI 348 - ITAT HYDERABADDenial of cost of construction / improvement while calculating the capital gains - Held that:- For the sake of record the schedule of agreement dated 06-12-2003 shows the ‘property of plot admeasuring 600 Sq. yards (along with portion of old house admeasuring 1000 Sq. feet) out of 1828 Sq. yards equal to 1529 Sq. Meters bearing premises No. 8-2-293/82/8/1323/A, Road No. 67, Jubilee hills layout’. Similar description was mentioned in the other two documents also, which indicate that out of the 1828 Sq. yards of the land, there was a portion of old house admeasuring 1000 Sq. feet. Immediately thereafter the Assessees have entered a memorandum of construction agreement dated 29-03-2005 for construction the residential property with specifications of columns, beams etc., as stated in second page of the construction agreement, for a consideration of ₹ 45,00,000/-. M/s Maheshwari Megaventures Ltd., had shown this receipt of ₹ 45,00,000/- which was accepted by the A.O. It was also on record that the said company has spent only an amount of ₹ 27,77,538/- and balance was offered as profit. As seen from the notes on accounts also, the said company has taken over an entertainment center in the month of Feb 2006 and a restaurant which were not capitalized. However, A.O finds that the bills produced pertain to items for Hotel and other items which are used in hotel / restaurant, but not cost of construction on the project. Since, this forum is not in a position to examine whether the Assessee’s contentions are correct or not, I am of the opinion that the claim is to be reexamined. A.O is directed to examine the issue afresh, in the light of the evidence that may be produced and allow the expenditure accordingly, if the same is spent on the building on the property. Assessee appeal is allowed for statistical purposes.
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