9911796707
TMI Blog2020 (4) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee submitted that essentially this ground is legal ground. It was submitted that by way of written submissions that the assessee undertook construction of an Apartment with 21 flats in a project called Deeplaxmi Apartment during the period from F.Y. 1996-97 to 1999-2000. No proceedings were pending. However, based on the request letter of DCIT Circle - 1, Navsari dated 06.08.1999 under section 131 (1)(d) , the DVO undertook the valuation of the property and submitted report dated 29.11.2000 (PB-1 to 6)at Rs. 71,71,225. Based on which, the Department has initiated proceeding under section 148 of the Act on 16.01.2006. (PB-23). Therefore, the learned counsel for the assessee contended that reference to DVO could be made when assessment proceedings are pending. In the case of there was no proceedings were pending hence, reference to DVO was not valid. Further, the reopening of assessment has been done based on DVO report which is not valid in the light of following judgements; Me & Mummy Hospital v. ACIT [2014] 107 DTR (Gujarat) 209 (PB-104) CIT v. Baldev Plaza [2013] 94 DTR (All) 313, (PB-113), ITO v. Nisarg Co-op Housing Society Ltd. [2011] 48 SOT 136 (Ahmedabad-Trib) PB-122) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings in that case. In said case, the M/s. Deep Laxmi Apartment has furnished cost of project at Rs. 36 lakhs. Therefore, the contention of the learned counsel for the assessee that reference was made when no proceedings were pending before the AO hence, re-opening based on DVO report is not valid is without any basis and far from facts. Therefore, the AO has rightly assumed jurisdiction u/s.147 of the Act in the case of the assessee when it was revealed in the assessment proceeding in the case of M/s. Deep Laxmi Apartment that the assessee has not filed any return of income for the investment made in construction of M/s. Deeplaxmi Project, which was constructed by the assessee i.e. M/s. Ashadeep Developers. 5. We have heard the rival submissions and perused the relevant material on record. We find that the learned counsel for the assessee has not made any submission as to why this additional ground was not raised while filing of appeal before tribunal except saying that it is legal ground. Nor any affidavit is filed before for spelling reasons and justification of admission of additional ground and why not raised at first instance at the time of filing of appeal. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has furnished cost of project at Rs. 36 lakhs. Therefore, the contention of the learned counsel for the assessee that reference was made when no proceedings were pending before the AO hence, re-opening based on DVO report is not valid is without any basis and devoid any merit. These facts clearly showed that no reference was made in the name of M/s. Ashadeep Developers (the assessee). Therefore, contention of the Learned Counsel that reference to DVO made when no proceeding pending and therefore, re-opening made is devoid of any merit and based on wrong and misleading facts and contrary to record. In view of this matter, the additional ground is neither maintainable as no argument and justification is given and how it has come to be raised in second round of assessment proceedings which was carried out at the behest of Tribunal for supplying reasons for reopening of assessment only, Nor this grounds of appeal was taken before the AO, hence, it is not maintainable in law and also liable to be dismissed on merits due to facts as discussed above. The reliance by the Learned Counsel on various case laws cited above are not applicable as the facts of the present case entirely differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,000 and made addition of difference of Rs. 39,48,225 on the basis of project completion method. This method was adopted, as the assessee has not filed any return of income for A.Y.1998-99, 1999-00, 2000-01. 9. Being, aggrieved, the assessee filed an appeal before the Ld. CIT (A). Before whom it was submitted that the appellant is engaged in construction of project in the name of Deep Laxmi Apartment consisting of 21 flats. The construction started for A.Y. 1996-97 and completed in A.Y. 1999-2000. As per the details filed before ITAT following expenses were incurred: Assessment year Land Construction 1996-97 4,40,000 33,05,489 1997-98 23,41,632 1998-98 1,06,508 1999-2000 4,10,912 Total 4,40,000 61,64,541 10. Total area constructed was 16,980 sq.; cost of per Sq. Ft. comes about Rs. 350 sq. ft., which is reasonable at the time. It was mentioned that DVO determined total cost at Rs. 71,71,225 whereas the assessee shown at Rs. 61,64,541 hence, difference is of Rs. 19,96,678 which is less than 15% be ignored. It further submitted that how the figures of Rs. 36, 00, 000 for cost of construction is not clear. It was further claimed that no addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken place during A.Y. 1999-2000. Further, DVO has adopted CPWD rates hence, DVO report cannot be accepted. Further, cost of construction as per books of accounts of the assessee was at Rs. 61,64,541 and not Rs. 36,00,000 and therefore, there was difference of only Rs. 10,07,000 between the cost of construction as shown by the assessee and as determined by the DVO has to be ignored being less than 15% in the light of decision of Hon`ble Supreme Court in the case of C.B Gautam 199 ITR530 (SC) and Nitesh Maheshwari 53 DTR 413. 12. Per contra, the ld. Sr. D.R. vehemently supported the order of lower authorities. She has further submitted that the assessee has not cooperated during original assessment proceedings as well as during set-aside proceedings before the AO. The assessee has not made any compliance to notice issued and produce books of accounts. Hence, lower authorities were justified in making addition in one year. 13. We have heard the rival submissions and perused the relevant material on record. The perusal of original assessment order and fresh assessment order made in compliance to TRIBUNAL order dated 31.01.2012 shows that the assessee has not cooperated in A.Y. as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or arriving at correct taxable income in the hands of the assessee. The claim of the assessee that how the addition can be made in one year is not tenable as the assessee has not filed any supporting evidence for year wise income and no return of income for assessment years including assessment year under consideration is also not filed. However, the point taken by the Learned Counsel that CPWD rate is to be applied and some weightage be given to cost figures submitted by the assessee. We find that the assessee himself has total cost at Rs. 66,77,000 and expenses at Rs. 65,97,000 of which difference comes to Rs. 87,000 which is the net profit according to the assessee. However, same is also not disclosed as no return of income was filed. Similarly, in such type of project where 21 flats have been constructed, it would be reasonable to adopt Net Profit Rate as applicable to construction business. It is settled law that entire receipts cannot be taxed. In the light of these facts, only net profit is required to be taxed not the entire receipts. Therefore, real income is only to be taxed. We have considered the case laws, relied by the Learned Counsel, but find them not applicable i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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