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TMI Blog2022 (4) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2017 for A.Y.2012-13 by CIT(A)-10, Abad, confirming the addition of Rs. 49,81,069/- as understatement of construction receipts is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations, charts, documents etc. furnished and the evidence produced by the appellant. The observations made by CIT(A) in so far as the same are contrary to the evidence on record are not admitted by the appellant. 2.1 The Ld. CIT(A) has grievously erred in law as well as on facts in rejecting the book result of the appellant and confirming the addition of Rs. 49,81,069/- made by AO towards understatement of construction receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The Assessing Officer on examination of one of the sale deeds noted that the ratio is 29.38% towards land cost and 70.62% towards construction. On being asked, as per the appellant's own calculation produced before the Assessing Officer by considering all the towers, the land cost was coming at 29.42% whereas the construction cost was coming to 70.58%. However, the Assessing Officer noted that going through the schedule of advances against the land cost and against the construction cost, the Assessing Officer had shown total value of advances towards land cost at 3,65,65,875/- which is 45.10% of total advances whereas the total value against construction advance was shown at Rs. 4,45,15,529/- which comes to 54.9%. This clearly sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en advances received on account of land cost and on account of construction cost. The appellant has clearly bifurcated 16% more towards land cost because this does not form part of the contract receipt in the case of the appellant. When as per assessee's own calculation the land owners can be paid upto 29.42%, the assessee has not been able to explain why it paid 45.1% to the land owners. Regarding the argument of double taxation, the ld. CIT(A) held that the appellant has not produced anything to prove that this income has been offered for taxation in the hands of the land owners. Even from the submission filed by the appellant during the course of appeal proceeding, it can be seen that proportion of the land cost to the total cost comes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Ltd. 358 ITR 295, the books of accounts of the assessee cannot be rejected. The land rate at the time of booking is the basis of bifurcation. The cost of land forms part of the sale deed and the cost of land so allocated goes to the land owner. The calculation made by Assessing Officer would result in double taxation since the construction cost of Rs. 1,27,11,726/- has already been assessed in the hands of land owners. The ld. counsel for the assessee submitted that as per agreement with land owner, the amount received from prospective buyer is first allocated towards land cost only. This system is consistently followed by firm since inception of project and accepted by the Department in prior years. In response, the ld. Departmental Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land owner. Therefore, the ld. counsel for the assessee has submitted that in case the consideration for land cost to the extent of 15% (which comes to Rs. 49,71,556/-) is again taxed in the hands of the assessee, it would lead to double taxation. This is the last year of the project and the methodology of cost allocation has been accepted in the prior two years as well. We are in agreement with contention of the ld. counsel that once having accepted this methodology for the past years, the Department cannot reject the methodology in the third year of the project, following the principle of consistency. We also note that the assessee has brought to our knowledge that the cost of land is allocated through registered sale deed and is dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , assessee's claim was to be allowed in assessment year in question as well. The Pune ITAT in the case of Tasty Bite Eatables Ltd. v. DCIT 111 taxmann.com 246 (Pune-Trib), held that where TPO had accepted segmental details of ready-to-serve food product divisions filed by assessee since assessment years 2007-08 to 2010-11 but rejected same in impugned assessment year, violation of principle of consistency caused by him was not proper. In view of the above for the sake of consistency, we are of the view that the ld. Assessing Officer has erred in law and fact in rejecting the books of accounts of the assessee which the Department has accepted in prior years on the same set of facts. However, we note from the orders of ld. Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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