TMI Blog2021 (8) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... e prevailing in the instant case, we are satisfied that it would be reasonable to restrict the disallowance at 10% of depreciation instead of 20%, which will be in addition to the disallowance of ₹ 50,000/- offered by the assessee itself. This ground is, thus, partly allowed. Addition on account of construction cost of non-80IB project - AO observed that the assessee had shown huge profit in 80IB project at around 60% as against around 7% in non-80IB project - HELD THAT:- There can be several reasons for such a nominal increase in the cost of construction depending upon the quality of construction etc. AO has not pointed out any defect in the details furnished by the assessee showing the construction cost per sq.ft. computed in G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of status of the police complaint, the ld. AR submitted that nothing has transpired so far towards recovery of any amount. These facts indicate that the amount embezzled by Shri Rahul Kulkarni has become irrecoverable and the same should be allowed as deduction. We, therefore, overturn the impugned order and grant deduction for the amount embezzled. It is clarified that as and when the recovery is made from Shri Rahul Kulkarni, the same should be offered for taxation. Appeal is partly allowed. - ITA No.1247/PUN/2017 - - - Dated:- 6-8-2021 - Shri R.S. SYAL, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Shekhar Naniwadekar For the Revenue : Shri S.P. Walimbe ORDER PER R.S.SY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use also. We, therefore, hold, in principle, that the AO was justified in making disallowance of depreciation on motor cars purchased during the year. However, considering the entire facts and circumstances of the case prevailing in the instant case, we are satisfied that it would be reasonable to restrict the disallowance at 10% of depreciation instead of 20%, which will be in addition to the disallowance of ₹ 50,000/- offered by the assessee itself. This ground is, thus, partly allowed. 4. The next issue raised by the assessee is against the addition of ₹ 21,15,552/- on account of construction cost of non-80IB project. The factual matrix of this ground is that the assessee undertook two projects, namely, Hi Bliss and Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arising on account of difference in land cost and difference in sale rate per sq.ft. He focused the addition only towards the difference in cost of construction per sq.ft. Whereas the eligible 80IB unit carried cost of construction at ₹ 1483/- per sq.ft and non-eligible unit carried cost of construction at R.1,531/- per sq.ft. There is difference of just R.48/- per sq.ft., which is only 3.23%. There can be several reasons for such a nominal increase in the cost of construction depending upon the quality of construction etc. The AO has not pointed out any defect in the details furnished by the assessee showing the construction cost per sq.ft. computed in Gold Ember project at ₹ 1531/- per sq.ft. Neither the books of account have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulkarni showing cash collected from the customers, which was not deposited with the assessee firm. A total sum of ₹ 49,15,456 was collected by Shri Rahul Kulkarni, out of which sum of ₹ 2,98,700 lakh was recovered from the contractor and sum of ₹ 15,39,140 was recovered from Shri Rahul Kulkarni, leaving balance of ₹ 30.77 lakh that was claimed by the assessee as deduction. The AO made addition for the said amount on the ground that the assessee could not produce Shri Rahul Kulkarni and that his whereabouts were also not given. The ld. CIT(A) affirmed the addition. 7. We have heard both the sides. Page 84 of paper book is a signed statement of Shri Rahul Kulkarni admitting receipt of cash from certain customers, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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