2015 (12) TMI 895

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..... square feet instead of Rs. 511/- per square feet adopted by the Assessing Officer." 3. Learned DR submitted that the assessee is in the business of builder and has sold fifteen flats during the year. He submitted that the assessee has calculated the cost of construction of 15,174 sq.ft. area of these fifteen flats at a flat rate of 750/- per sq.ft. Besides this amount, the assessee has also debited labour wages and administrative expenses. He submitted that this is an arbitrary method of cost allocation, which is not permissible as per the provisions of the Act. The assessee itself has enclosed valuation report dated 27.02.2013 of Shri S.C. Gupta, M.I.E. & Chartered Engineer for the year of construction of 2008 and the cost of construction .....

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..... accounting years ending on 31.03.2012, filed in compilation before the Tribunal. The learned counsel for the assessee also referred to the assessment order passed under Section 143(3) dated 03.03.2015 for the later assessment year 2012-13 wherein, in similar facts, no addition was made by the Assessing Officer. He relied on the order of the learned CIT(A). 5. We have considered the rival submissions and have perused the order of the Assessing Officer and the learned CIT(A). We find that the assessee has adopted a novel method of arriving at the cost of construction by estimating the same on the basis of sale price minus the estimated profit etc. In reply to a specific query by the Bench, the learned counsel for the assessee submitted that .....

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..... 5/- per sq.ft. We are unable to appreciate that how the selling price in the succeeding year could determine the cost of construction of the property for the preceding year. In these facts of the case, we hold that the assessee could not adduce any evidence in support of its estimate of cost of construction and no valid reason could be assigned by the CIT(A) while giving substantial relief to the assessee and there was some basis for arriving at the cost of construction at Rs. 511/- per sq.ft. by the Assessing Officer on the basis of the assessee's own valuer report, we allow ground No.1 of the Revenue's appeal. 6. Ground No.2 of the Revenue's appeal reads as under:- "On the fact & in the circumstances of the case, the ld.CIT(A) has erre .....

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