9911796707
TMI Blog2023 (7) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissing AO's action of rejecting books of account and assessing total income at Rs. 8,37,92,903/- without appreciating the contention of assessing officer, 2. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 4. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 3. The brief facts of the case are that the assessee is a partnership firm and engaged in the business of construction as well as developer in real estate business. The assessee filed its return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock and part of current year expenses. 4. The assessee filed appeal before Ld. CIT(Appeals) who deleted the additions made by the AO with the following observations: "The AO in the assessment order has observed that during the financial year 2009-10 that is A.Y. 2010-11, in order to minimize the profit/ income the assessee claimed to have incurred big expenses in the name of purchase/ labour and administrative expenses despite the fact that the scheme was constructed completely and granted BU permission earlier. During the year under consideration the assessee has shown opening WIP of Rs. 94408703/- as on 01/04/2010 and opening WIP as on 01/04/2009 was at Rs. 24186592/-. The AO has further observed that during the assessment year 2010-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings are relating to A.Y. 2010-11, if any action is required to be taken, the same has to be in the A.Y. 2010-11 and the AO's action of making addition on that account and rejecting books of account of subsequent year without finding a single fault/defect in the current year's transaction is not tenable in law and therefore, the action of the AO cannot be sustained. The argument of the AO that the assessee has not shown any income on account of construction of the building is also not factually correct. The assessee has shown sales of Rs. 3.59 crores in assessment year 2008-09, and sale of Rs. 8.13 crores in the A.Y. 2009-10 and sales of Rs. 9.93 crores in A.Y. 2011-12. The assessee has also shown profit of 38.94 lacs in A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 11166080.50 11838525.88 2008-09 11145049.00 11486470.99 2009-10 60571478.00 57604361.17 2010-11 25655.00 20596.66 Total 107,981,659 110,326,007 On a perusal of the above, it is seen that the cost of investment in land has been shown by the assessee at 3.25 crores and the same has been valued by the DVO also at 3.25 crores. In case of cost of investment in building, the same is declared by the assessee for the complete building at 10.79 crores whereas the estimation of the same by the DVO is 11.03 crores. Although there are some minor description if one compares assessment year wise, however, overall the cost shown by the assessee is lessor than the valuation done by the DVO. It is to be noted that the DVO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has claimed expenses during the year under consideration, the AO is empowered to verify the same even though the expenses have been incurred in the prior years. In response, the counsel for the assessee submitted that the Ld. CIT(Appeals) has correctly observed that the AO referred the project to DVO for valuation of cost of construction of the project. As per the project report submitted by the DVO appointed by the Department, the cost of investment in land has been shown by the assessee at Rs. 3.25 crores and the same has been valued by the DVO at Rs. 3.25 crores as well. In case of cost of investment in building, the cost incurred by the assessee for completion of the project has been declared by the assessee at Rs. 10.79 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer appointed by the Department to value the cost of investment in the aforesaid land and also the cost of construction incurred by the assessee for completion of project, has estimated the combined value of the cost of land and cost of construction at a value which is higher than that value submitted by the assessee, albeit marginally than the cost estimate given by the assessee, then no addition is called for in the instant set of facts. We observe that that Ld. CIT(Appeals) has noted that the cost of investment in land has been shown by the assessee at Rs. 3.25 crores and same has been valued by the DVO also at Rs. 3.25 crores. In case of cost of investment in building, the cost of construction has been declared by the assessee Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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