New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2017 (2) TMI 166 - ITAT MUMBAI

2017 (2) TMI 166 - ITAT MUMBAI - TMI - Addition made u/s. 69C - estimation the cost of construction of the plant - adoption of report of DVO - Held that:- The AO had not rejected the books of account of the assessee and no defect has been pointed out as to how the amount capitalised under building account totaling to ₹ 9.06 crores as on 31.3.12 was not reliable. Para-C of page 8 of PB talks of value of the work for which consultancy was to be paid and the estimated cost is mentioned at  .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The accounts of the assessee were audited. In our opinion,there was no justification after letter of consultant to take the value of the building at ₹ 8 crores. The assessee had obtained a valuation report from a chartered engineer who is also a registered valuer and same was submitted to the FAA. As per the report of the registered valuer the estimated total cost of investment is ₹ 8.79,36,912/-.Thus there is a minor difference of ₹ 36,106/- in the cost of investment shown by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of CIT(A)-14,Mumbai,the assessee has filed the present appeal.Assessee-company, engaged in the business of manufacturing and selling of various kind of furnitures,filed its return of income on 14/10/2010, declaring income of ₹ 1.17 crores.The Assessing Officer (AO) completed the assessment u/s.143(3)of the Act,on 19/03/2013, determining its income at ₹ 10,37,42,230/-. 2. Effective ground of appeal is about addition of ₹ 28.65 lakhs made u/s. 69C of the Act. During the course of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the assessee to explain as to why the project cost should not be taken at ₹ 8 crores.The AO observed that it was very difficult to accept that architect,who was authority in the construction design and evaluation of the structure would quote from figure that too file calculating his fees.After considering the explanation of the assessee in that regard the AO held that the assessee had concealed the expenses to the tune of ₹ 3 crores in the project. Invoking the provisions of sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

into with Munish & Associates(M&A)on 27/07/2009, that fees to be paid to the consultant was fixed at 1.25% of the cost of the project estimated to be at ₹ 5 crores as per the agreement,that the AO based on only one of the invoices came to the conclusion that cost of the project was ₹ 8 crore,that referring to that invoice he made an addition of ₹ 3 crores, that the part B of ACA dealt with consultancy fees to be paid, that part C of the agreement estimated the value of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ertificate stating that the cost of the project was ₹ 8 crores, that there was an inadvertent mistake on part of the consultant, that the errors was rectified in the bill and payments were made accordingly, that the assessee had obtained written clarification from the consultant with respect to clerical error in one of the bills, that in the subsequent financial year it had constructed the additional for, on the said building and the total cost of construction of the building is ₹ 9. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the total cost of building as on 31/03/2011 was ₹ 9.05 crores, that it had capitalised additional cost of construction of building to the tune of ₹ 2.41 crores in the subsequent financial years, that the AO was not justified in making the addition based on estimated value of cost of project,that the assessee had capitalised building cost of ₹ 6.64 crores and not ₹ 5crores as assumed by the AO, that he had not brought out any finding on record that the assessee had incurr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

AO to consider the estimated cost of investment for the year under consideration as per valuation report given by the DVO and the differential only be considered for addition in the computation of total income instead of ₹ 3 crores. 4. Before us,the Authorised Representative(AR) contended that no mistake was found in the books of accounts of the assessee, that addition u/s.69C was made on estimate basis, a reference can be made,for determining the fair market value and not for determining .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

We find that assessee had carried out construction during the year under consideration, that it had entered into an ACA with M &A,that it had to pay commission at the rate of 1.25% to the consultant,that the consultant raised three bills for the services rendered by it to the assessee, that in one of the bills the rate as well as the total project cost was not as per the ACA, that in the bill the project cost was mentioned at ₹ 8 crores, that the AO made a reference to the DVO, that h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version