TMI Blog2021 (9) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. The appeal of the revenue on this ground is dismissed. Pro-rata development expenses disallowance - HELD THAT:- It is a fact that the landowners have paid the development charges, additional FSI and other expenditure related to the project. The said development charges were intrinsically related to the project land. The benefit on account of additional FSI would accrue to the landowners also. Thus, the land owners have transferred the bundle of rights for constructing the residential cum commercial project including additional FSI, which is nothing but cost of improvement. Once it is agreed that the additional FSI and development charges are in the nature of improvement, the same required to be allowed as deduction. It is not the case of the department that both land owners and the promoters have claimed the expenditure - AO is incorrect in holding that the development charges and additional FSI charges are neither related to transfer nor cost of improvement. We are of the considered view that the amount of the expenditure on the project on account of development and addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax (Appeals) [CIT(A)]-1, Visakhapatnam in ITA No.10224/2017- 18/ACIT, C-3(1), Vsp/2017-18 dated 25.03.2019 and the assessee filed cross objection in support of the order of the Ld.CIT(A). The assessee also filed cross appeals for the Assessment Year (A.Y.) 2013-14. For the A.Y 2014-15 the assessee filed the appeal. Since the facts are identical, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under. 1.1. Brief facts of the case for the A.Y.2013-14 are that the assessee had filed his return of income declaring total income of ₹ 2,05,60,960/- and agricultural income of ₹ 1,28,900/-. Since the return of income was filed beyond the due date for filing the returns of income, the Assessing Officer (AO) issued notice u/s 148 and taken up the case for assessment. During the course of scrutiny proceedings, the AO found that the assessee was the co-owner of land admeasuring 1.45 acres located at old survey No.318/3A1, New Survey No.318/3A1B, 318/3A1C, 318/3A1D 318/3A1E, Nolambur village, Ambattur Taluk, Thiruvallur District of Tamilnadu. Out of total land holding of 1.45 acres, the assessee owns 0.45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessee s claim for proportionate share of expenses incurred, out of the total expenses paid to CMDA towards development and premium FSI charges amounting to ₹ 16,72,20,000/-, which was ₹ 5,18,95,862/- claimed in the return of income. 2. Against the order of the AO the assessee went on appeal before the CIT(A) and the Ld.CIT(A) found that the assessee was co-owner for 0.45 acres and transferred the entire land to the developer, in lieu of his share of built up area of 1/3rd of constructed space. The Ld.CIT(A) viewed that since the assessee was entitled for 1/3rd of constructed area along the car parking, he retained the 1/3rd share of land and transferred the 2/3rds of land which works out 13,608 sq feet to the promoters. Thus, the Ld.CIT(A) held that having transferred the entire land in lieu of 1/3 share of built up space, the AO is incorrect in taxing the entire area of 19602 sq.ft instead of 13068 sq.ft which was transferred to the developer. Since the assessee has retained 1/3 share and transferred 2/3 share to the developer, the Ld.CIT(A) held that only the sale consideration of 13608 sq.ft needs to be brought to capital gains tax, after deducting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rights along with additional FSI. Therefore, argued that the bundle of rights accrued to the assessee on account of additional space is nothing but improvement which is related to the transfer of land, hence, argued that the Ld.CIT(A) has rightly directed the AO to allow the sum of ₹ 5.18 crores out of ₹ 16.72 crores and no interference is called for. 4. We have heard both the parties and perused the material placed on record. As per the JDA, land owners were entitled for 1/3rd share of constructed area along with 1/3rd share of car parking. Thus, it is clear that out of the total land transferred to the developer, the land owners were entitled for 1/3rd share of land. What was transferred to the developer was only 2/3rds of the land, but not the entire land as rightly observed by the Ld.CIT(A). Therefore, what is to be brought to tax under capital gains is 2/3rd of land area, but not the entire land. Thus, the Ld.CIT(A)has rightly directed the AO to adopt 2/3rd of 19602 sq.ft instead of 19602 sft. adopting the SRO rate of ₹ 5,500 per sq.ft which worked out to 13068. Hence, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed and the cross appeal of the assessee is allowed. I.T.A.No.423/Viz/2019, A.Y.2013-14 7. The assessee filed this cross appeal agitating the addition of ₹ 3,50,000/- confirmed by the Ld.CIT(A) relating to bank deposits. The assessee has made the cash deposit of ₹ 3,50,000/- on 23.04.2012 and explained the source as self withdrawals made from 05.04.2011 to 12.01.2012 on various dates. The AO did not believe the source as withdrawals since, the assessee has made withdrawals subsequently and viewed that if the assessee is holding the cash on hand, there is no requirement for subsequent withdrawal and relied on the decision of ITAT Hyderabad Bench in the case of Mir Basheeruddin Ali Khan Vs. ITO, Ward- 6(3), Hyderabad. Reported in [2014] 42 taxmann.com 69 and made the addition u/s 69 of the Act. 8. Against which the assessee went on appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition made by the AO. Against which the assessee is in appeal before this Tribunal. 9. We have heard both the parties and perused the material placed on record. The assessee has furnished the details of withdrawals made from the bank and the department did not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the light of withdrawals made by the assessee subsequently. Hence confirmed the addition and dismissed the appeal of the assessee. 12. We have heard both the parties, perused the material placed on record. The assessee had withdrawn the cash of ₹ 25,00,000/- on 13.10.2012 and there is no dispute on withdrawal of cash. The AO did not give any finding with regard to usage of the withdrawn money. There was no evidence having made the investments or incurred any other expenses by the assessee. The AO relied on the decision of Mir Basheeruddin Ali Khan Vs. ITO, Ward-6(3), Hyderabad reported in [2014] 42 taxmann.com 69 (Hyderabad-Trib), wherein, ITAT confirmed the addition. In the cited case, cash deposit of ₹ 6,50,000/- made on 08.09.2014 was stated to be out of periodical withdrawals made by the assessee from February 2002 to September, 2003 and there was time gap of more than one year and the cash was not withdrawn at one go. In the instant case, the assessee has withdrawn the money at one go on 13.10.2012, which was later deposited. Thus, keeping in view the explanation of the Ld.AR that the assessee kept the cash for some time to meet the unforeseen expenses app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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