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2015 (12) TMI 895 - ITAT DELHI

2015 (12) TMI 895 - ITAT DELHI - TMI - Computation of cost of construction - Held that:- CIT(A) has determined the cost of construction of the flats at ₹ 700/- per sq.ft. as against ₹ 511/- estimated by the Assessing Officer, without giving any valid reason for the relief allowed to the assessee. The CIT(A) has allowed the relief on the ground that selling price of the flats for succeeding year has been taken at ₹ 735/- per sq.ft. We are unable to appreciate that how the sellin .....

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valuer report - Decided in favour of revenue

Estimating the net profit rate of 15% of gross contract receipts - Held that:- he addition was made by estimating the net profit rate of 15% of gross contract receipts minus 8% of contract receipts by the Assessing Officer. We find that there was no basis for estimating the profit by applying the net profit rate of 15% and, accordingly, we hold that there is no mistake in the order of learned CIT(A) in holding that the Assessing Officer ha .....

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Delhi dated 21st August, 2013. 2. Ground No.1 of the Revenue is as under:- On the facts & in the circumstances of the case, the ld.CIT(A) has erred in taking the cost of construction @ ₹ 700/- per square feet instead of ₹ 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. ar .....

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5,500/- per sq.mtr. i.e. Rs. 511 per sq.ft. He submitted that the flats sold in the FY 2009-10 were, in all likelihood, constructed during the FY 2008-09 and, therefore, the Assessing Officer adopted the same value as per assessee s valuer at Rs. 511/- per sq.ft. The learned DR submitted that the CIT(A) has enhanced the same at Rs. 700/- per sq.ft. without giving a single valid reason for the same. He submitted that the assessee has adopted the method of cost of construction by deducting the pro .....

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sible to arrive at the correct figure of cost of construction at a particular period and, therefore, the assessee has rightly calculated the cost of construction of the flats in question. He referred to the relevant portion of the appellate order passed by the learned CIT(A) in support of the case of the assessee. He referred to the chart showing year-wise estimation of cost of construction and cost towards contract receipts for five accounting years ending on 31.03.2012, filed in compilation be .....

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struction 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 Accounting Standard No.7 of the Institute of Chartered Accountants of India was only partly complied with. The assessee is maintaining regular accounts and its accounts are being audited. In these facts, we are of the view that the assessee should have come forward with some reasonable basis for estimating its c .....

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. Gupta, M.I.E. & Chartered Engineer (IND), M/s Gupta & Associates for the year of construction of 2008 giving the cost of construction at Rs. 5,500/- per square meter. The Assessing Officer has adopted the same and has arrived at the figure of Rs. 511/- per sq.ft. as the cost of construction. We find that the learned CIT(A) has determined the cost of construction of the flats at Rs. 700/- per sq.ft. as against Rs. 511/- estimated by the Assessing Officer, without giving any valid reason .....

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