TMI Blog2023 (5) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... o his satisfaction that the assessee did not possess any residential house in his name. AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee.Grounds raised by the revenue on this issue are accordingly allowed for statistical purposes. Determination of cost of construction - cost of construction at Rs. 1370 per sq.ft by the ld.CIT(A) as against Rs. 2286/- per sq.ft adopted by the AO - HELD THAT:- Since the AO in the instant case has computed the cost of construction on the basis of the figures obtained from the Telangana Registration Department website, therefore, in our opinion everything should be based on the rate as per the office of the Sub Registrar - restore this issue also to the file of the AO - Ground allowed for statistical purposes. Addition u/s. 68 - assessee could not produce the proper confirmation letters by giving communication address, date of borrowal amount, mode of transaction, permanent account number, bank account statement etc. - HELD THAT:- Since the confirmation letter filed before the AO shows that the same amount is the opening balance as on 01.04.2010, therefore, addition of the same for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has filed a condonation application along with an affidavit explaining the reasons for such delay in filing of the Cross Objection. After considering the contents of the condonation application filed along with the affidavit and after hearing both the sides, the delay in filing of the cross objection by the assessee is condoned and the cross objection is admitted for adjudication. 3. First we take-up ITA No.2236/Hyd/2018 for AY 2012-13 as the lead case. 4. Facts of the case, in brief, are that the assessee is an individual and a member of the Legislative Council of Andhra Pradesh. He derives income from salary and income from hiring of vehicles. He also derives agricultural income. He filed his return of income for the impugned assessment year on 28.06.2013 by admitting total income of Rs.4,22,180/- and agricultural income of Rs.14,20,400/-. 5. In this case, information was received from office of the DDIT (Inv.), Unit-II(1), Hyderabad on 27.05.2015 that the assessee has entered into a development agreement with M/s. Lotus Properties Ltd, Hyderabad on 03.12.2011 along with two others for development of the land admeasuring 4172.32 sq.yds situated at H.No.8-2-/334/1A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sq.ft 2286.059027 6. He further noted that the land owners forfeited 1881.30 sq.yds or 16931.69 sq.ft to the developer. He therefore computed the value of 16931.70 sq.ft of land which is equal to 50,881 sq.ft of super structure allotted to three land owners. The value of such super structure @Rs.2,286/- on 50,881 sq.ft worked out to Rs. 11,63,13,966/-. Finally, the AO computed the taxable short term capital gain in the hands of the assessee at Rs. 73,71,660/- by observing as under:- 8.2 the built up area of each flat and the total no flats and total super structure of land owners are as under:- Flat No. Built up area in Sq.ft No.of flats S.V.S.K.Reddy Flats M.Bhagya Lakshmi Flats B.Preethi Reddy 1 2513 2 5026 2 5026 2 5026 2 2960 1 2960 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.96,85,076 Rs.96,85,076 Rs.96,85,076 The STCG share was divided equally among three owners, since the owners have common ownership on such land. 8.4 The cost of acquisition of land and indexed cost of acquisition of land given for consideration is as under. The cost of index for the F.Y.2007-08 and 2011-12 are 551 and 785 respectively. The registration expenses arc not furnished by the assessee and arc allowed based on the documents produced and at an average rate of fee applicable to meet the principles of natural justice. The cost of acquisition and indexed cost of acquisition of land forfeited and chargeable under LTCG is as under. S.V.S.K.Reddy 1 Proportionate Sale consideration Rs.2,90,57,160 2 Cost of land Rs.1,25,00,000 3 Registration Expenses Rs.16,47,465 4 Total cost of land (Note 1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls to explain the commercial expediency and utilization of loan for business, date of borrowal, mode of receipt, genuineness of transaction etc. the AO made addition of Rs. 50,66,508/- on account of sundry creditors by observing as under:- The assessee shown sundry creditors of Rs.65,66,508/ - in balance sheet as on 31.03.2012 and asked to produce the commercial expediency, utilization of loans borrowed and identity genuineness and credit worthiness of loan creditors. The assessee's Authorized Representative appeared on 23.12.2016 and produced the details of sundry creditors and confirmation letter from the creditor M/s V.Praveen Kumar Reddy Co, Kadapa for Rs.50,66,508/ -and copy of acknowledgement of ITR filed for AY.2012-13. Whereas, the commercial expediency and utilization of loan to business, date of borrowal, mode of receipt, genuineness of transaction were not produced. Hence, sundry creditors of Rs.50,66,508/- was disallowed for the above deficiencies It and also for assessee's failure to furnish the details belatedly by not giving scope for further verification. 7.1 Also in absence of production of any proof in support of the claim of Rs. 1 lakh as deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developer for construction of residential complex. To this effect I hold that by entering into the development agreement, the appellant transferred 1043.07 sq. yds. of long term capital asset l. e. land and received 16,683 @75.02% i.e., 12,516 Sq. ft residential house. In view of the decision of the jurisdictional ITAT cited supra, I hold that the appellant is entitled for deduction u/s 54 F of the 1. T. Act in respect of all the six flats which were received by the appellant under the development agreement i.e, to the extent of I 2,516 Sq. ft @ 1370 is Rs. 1,7l,46,920/_. Ground No.6 is accordingly decided. 9. So far as the addition of sundry creditors of Rs. 50,66,508/- is concerned, the ld.CIT(A) also deleted the same by observing as under:- 5.8 Ground No.7 is with regard to addition of Rs.50,66,508/_ made by the Assessing Officer u/s 68 of the 1.T.Acl. The appellant submitted that the said amount was received from the partnership firm M/s V.Praveen Kumar Reddy Co., Kadapa. The said concern filed letter of confirmation before the Assessing Officer. The creditors also filed the return of income for the assessment year 2012-13 Showing the outflow of Rs.50, 66,508/-. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I.T.Act. by admitting additional evidence. 13.1 We have heard the rival arguments made by both the sides and perused the record. It is an admitted fact that assessee in his original return of income has neither claimed the deduction u/s. 54F nor claimed the same by filing a revised return or before the AO during the course of assessment proceedings. However, the assessee for the first time made the claim of deduction u/s. 54F before the ld.CIT(A). It is the case of the revenue that the assessee cannot claim the exemption u/s. 54F which was not made in the original or revised return of income in view of the decision of the Hon ble Supreme Court in the case of CIT vs. Goetze India Ltd. reported in 284 ITR 323. Simultaneously, it is also the grievance of the revenue that the ld.CIT(A) has admitted additional evidences while allowing deduction u/s. 54F. 13.2 So far as the claim of deduction u/s. 54F before the ld.CIT(A) is concerned, the reliance on the decision of Goetze India Ltd. (supra) by the Revenue cannot stand on the way of the assessee. The Hon ble Supreme Court in the above aforementioned decision has held that this decision was restricted to the powers of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his submissions arrived at the value at Rs.1250/- . According to the appellant the sale price of the area includes the finance charges, administrative charges, advertisement charges and the profit element to the builder. These facts have not been considered by the Assessing Officer while determining the market value of the contracted area at Rs.2286/-. I am in agreement with the appellant that there is profit element in the sale price which would be about 10%. There would also be other expenses which would not go to increase the cost of construction and such expenditure like finance charges advertisement charges and administrative cost would be about 30% of the market value. Considering all these factors, I would fix the value of the super structure handed over to the appellant at Rs.1370/- per sft. as against Rs.2286/- adopted by the Assessing Officer. The cost of construction is directed to be adopted at Rs.1370 as against Rs. 2286/-. 15. It is the grievance of the revenue that the ld.CIT(A) is not justified in adopting the cost of construction at Rs. 1370 per sq.ft. It is the grievance of the assessee in cross objection that the ld.CIT(A) instead of adopting the rate as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the amount was outstanding at the beginning of 01.04.2010 and the confirmation letter to this effect was also filed before the AO, therefore, this amount relates to the AY 2010-11 and addition if any, could have been made in AY 2010-11 and not in the AY 2012-13 being an old outstanding creditor. The ground raised by the revenue on this issue is accordingly dismissed. 18. In the result, the appeal filed by the revenue is partly allowed for statistical purposes and the cross objection filed by the assessee is allowed for statistical purposes. ITA No. 96/Hyd/2019 and CO No.15/Hyd/2019 19. The grounds raised by the revenue are as under: - 1. The order of Ld. CIT(A) is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in allowing deduction u/s 54F of the IT Act, under the facts and circumstances of the case. The basic conditions for allowing deduction u/s. 54F of the Income Tax Act are, the assessee shall not own more than one residential house, other than the new asset, on the date of transfer of the original asset OR the assessee shall not purchase any residential house, other than the new asset, within a period of one year after the date of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as the income of the assessee. 21. After hearing both the sides, we find the grounds of appeal No.1 and 8 by the revenue are general in nature and therefore are dismissed. 21.1 Grounds of appeal No.2, 3 and 4 by the revenue are identical to grounds of appeal No. 2,3 and 4 in ITA No. 2236/Hyd/2018. We have already decided the issue and the grounds raised by the revenue have been allowed for statistical purposes. Following similar reasonings, the above grounds by the revenue are allowed for statistical purposes. 21.2 Ground of appeal No.5 by the revenue and the only ground of appeal in cross objection are identical to ground of appeal No.5 in ITA No. 2236/Hyd/2018 and the ground of appeal in the cross objection No. 14/Hyd/2019. We have already decided the issue and the above grounds have been allowed for statistical purposes. Following similar reasonings, the above grounds are allowed for statistical purposes. 22. Ground of appeal No. 6 by the revenue relates to the deletion of Rs. 1,01,99,767/- on account sundry creditors. 22.1 After hearing both the sides, we find the AO in the instant case made addition of Rs. 1,13,39,767/- on account of sundry creditors wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y were produced. Whereas, the agricultural income shown in AY.2010-11, AY.2011-12 and in AY.2013- 14 is Rs.NIL, Rs.5,75,000/- and Rs.2,50,000/- respectively and aggregating to Rs.2,75,000/- per anum. It also noted that the assessee's relative Sri S.V.5athish Kumar Reddy holding lands of 25.43 acres of land in Vempalli Mandal got receipts about Rs.14.20 lakhs. In the same analogy the assessee will get only about Rs.2.32 lakhs of agricultural income. In consideration of the above circumstantial evidences, it is proved that the assessee is admitting agricultural income according to the necessity of requirement of funds. Therefore, the agricultural income of Rs.9,25,000/-(Rs.12,00,000-Rs.2,75,000) in excess of average agricultural income of Rs.2,75,000/- is brought to tax under the head income from other sources. 25. We find in appeal, the ld.CIT(A) directed to AO to disallow only 30% of the agricultural income declared for the year by observing are as under:- 5.9. The other ground with regard to the addition made disallowing the part of agricultural income of Rs.9,25,000/-. Considering the facts of the case, certificate issued by the Mandal Revenue Officer (MRO) and land h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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