9911796707
TMI Blog2024 (12) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... has recognised income of Rs. 5,53,00,000/- in books of account on account of development fees on mercantile basis based on services rendered and Agreements executed between various entities. The Assessing Officer has not accepted the method of assessee and held that the income was not recognised on percentage completion method. The AO considered the assessee as owner of the project and concluded that income of Rs. 4,00,00,000/- offered to tax in respect of work carried out in earlier year for Kalhar Project and not pertaining to year under consideration. The A.O. thereafter taxed income of Rs. 9,06,83,708/- reported under the head "liabilities" while computing taxable income. Thus the AO also estimated the profit at 8% of WIP of Kings Square and made addition of Rs. 35,45,480/-. Thus, total addition of Rs 9,42,29,188/- was made and demanded tax thereon. 2.1. During the course of appellate proceedings, assessee contended that similar additions made by the AO were deleted by ITAT for the subsequent asst. years, hence addition on this account should be deleted. Ld CIT[A] considered the submissions of the assessee and following the decision of the ITAT in assessee's own case deleted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. The appellant has provided a statement showing the details of Kalhar Booking as al 31st March, 2007, 31st March, 2008, 31st March, 2009 and 31st March, 2010. It is observed that Kalhar booking amount which was Rs. 21,87,62,854/- as on 31st March, 2007 had stood substantially reduced to 'Rs. 7,30,81,763/- as on 31st March, 2008 and amount also stands reduced thereafter. The reduction in booking amount is attributable to transfer of booking amounts in favour of the societies on allotment of the bungalows. The project cost also stands reduced on transfer of project cost to the respective societies. The various sundry creditors are reflecting the business liabilities on the part of the appellant company duly supported by documentary evidences viz. invoices, professional bills, debit notes etc. The representative of the appellant company has explained that the appellant is engaged in the business of development and construction and on the basis of the services provided by the appellant debit notes have been raised upon the societies and the fees received by the appellant company have been credited to the Profit and Loss account and have been considered in computation of the to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98,27,752/- was noticed by the AO. He estimated 8% profit on such WIP and made addition of Rs. 3,67,86,220/-. On similar analogy, he noticed WIP of Rs. 54,36,30,173/- in the Asstt. Year 2009-10 and estimated profit at Rs. 4.34 crores. These additions have been deleted by the Id. CIT(A). Similar addition was made in the case of the assessment in the Asstt. Year 1997-98 which was deleted by the Id. CIT(A). Dispute travelled upto the Tribunal vide ITA No 1114/Ahd/2005 and the Tribunal has uphold the deletion Copy of the Tribunal's order has been placed on record. 11. On due consideration of all the materials, we are of the view that the assessee was working as a developer it was not owner of work-in-progress. Moreover, on completion of project, it used to offer receipt received in the shape of development fees and such receipts have been recognized on completion of project. Consistently, this has been shown by the assessee. The AO has made an addition on hypothetical basis by treating the WIP belonged to the assessee. It has been contended before us that the AO has invoked Accounting Standard-7 which otherwise applicable on contractor. The assessee is a developer, and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income as purchase value and sale value were the same. Whereas the AO estimated the sale value of project of SIPL at Rs. 15,00,00,000/- and estimated cost of project at Rs. 8,00,00,000/-. The AO observed that deemed value of share of SIPL is Rs. 7,00,00,000/- (15 crs Less 8 crs) and number of shares issued by SIPL was 20,00,000, and thus the AO arrived at deemed value-per share at Rs. 35/- The AO has observed that appellant has transferred 19,99,000 shares in the year under consideration to Dubey Group, for deemed value of shares sold at Rs. 6,99,65,000/-. The AO has allowed cost of acquisition at Rs. NIL and computed capital gain liable to tax at Rs 6,99,65,000/- and demanded tax thereon. 7.1. On appeal the assessee objected to the above referred addition on the ground that estimated sale value of project as determined by the AO is incorrect, hence such value cannot be considered. The assessee further submitted that in the relevant year, there was no provision under the Income Tax Act to substitute the sale value of shares for which various judicial decisions were relied upon. Ld CIT[A] considered the above submissions and relying upon the decision of the ITAT in the case of SIPL ..... X X X X Extracts X X X X X X X X Extracts X X X X
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