9911796707
TMI Blog2012 (11) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. While examining the accounts of the assessee, the Assessing Officer noticed that the assessee company has claimed development expenses of Rs. 36,94,325/ - for site development of Kotkapura land although no sale / purchase was carried out . The value of the closing stock of the Katkapura land was shown at Rs. 2,07,23,147/ -. The Assessing Officer also not iced that the opening value of the Kotkapura land is Rs. 1,93,61,400/ - and the assessee had incurred development expenses of Rs. 36,94,325/ - (Rs . 23,32,578/ - being payment made to Punjab Urban Development Authority (PUDA) and Rs . 13,61,747/ - as expenditure of site development at Kotkapura) on this land. The Assessing Officer opined that the value of closing stock of Kotkapura land should have been the opening value of land brought forward plus other development expenses on this site incur red during the year i .e. Rs. 2,30,55,725/ - (Rs. 1,93,61,400/ - + Rs. 36,94,325/ -) . The Assessing Officer asked the assessee as to why the valuation of Kotkapura land should not include development expenses made on this site. In response to the above query, the assessee submit ted that the valuation of closing stock of the land was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice that the statutory fee is not part of development expenses. Further, it is submitted by the Ld. counsel for the assessee that the assessee is following uniform pol icy of valuing its closing stock at lower of cost or market value and, therefore, for the argument sake, if it is presumed that it is the part of cost even then the market value is not increased by payment of statutory levy to Govt. Authority, it is an obligation on the assessee company to pay the statutory levy and the market value of closing stock does not depend upon the payment of statutory levy. In view of the above arguments of Shri Ajay Jain, Ld. Counsel for the assessee, we think it appropriate to set aside the order of CIT(A) on this issue and remand the same to the file of Assessing Officer with a direction to consider the above submissions of Shri Ajay Jain, Ld. Counsel for the assessee and decide the issue afresh in accordance with law after affording due and reasonable opportunity of being heard to the assessee. Ground No.2 of the appeal is allowed for statistical purposes. 7. Ground No.3 & 4 of the appeal read as under: - 3. That the CIT(A) Chandigarh has wrongly confirmed the additions on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the CIT(A) has not taken into consideration the detailed submissions made by the assessee before him. The CIT(A) has also not given any reason as to why he has ignored the submissions of the assessee. Shri Ajay Jain, Ld. Counsel for the assessee pointed out that in the instant case, the Assessing Officer has calculated the value of closing stock as on 31.3.2007 by taking the average value of stock as on 1.4.2006. Shri Ajay Jain, Ld. Counsel for the assessee submit ted that the method adopted by the Assessing Officer is not a recognized method. According to him, the value of opening and closing stock depends on the various factors and it is not true that the valuation is done on the same rate for opening and closing stock. Shri Ajay Jain, Ld. Counsel for the assessee also submitted that there was a great recession in financial year 2006-07 and due to recession the assessee company manage to sell the meager stock. There was opening stock of 107.5 residential plot and 14 SCO sites and the assessee company sold only three SCO sites and 18 residential plots during the year under consideration and market value declined considerably and the assessee is following uniform policy of v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. In the absence of such details, we could not appreciate the content ion of Shri Ajay Jain, Ld. Counsel for the assessee. However, in the interest of justice, we think it proper to restore this issue to the fi le of Assessing Officer with a direct ion to consider the above contention made on behalf of the assessee and decide the issue afresh in accordance with law after affording due and reasonable opportunity of being heard to the assessee. Ground No.5 of the appeal is allowed for statistical purposes. 14. Ground No.6 of the appeal reads as under: - 6. That the Ld. CIT(A) has also erred in confirming the disallowance of the telephone expenses of Rs. 94,694/ - without appreciating the facts that telephone bills in the name of the company and the same were incurred for business purpose of the assessee. 15. The Assessing Officer has discussed this issue in para 6 of the assessment order. During the assessment year under consideration, the assessee claimed telephone expenses at Rs. 3,14,757/ -. The Assessing Officer not iced that a number of telephone users were neither di rectors nor employees of the assessee company. When confronted, the assessee has replied that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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