Assessee's appeal dismissed for lack of evidence and cooperation.

The ITAT dismissed the assessee's appeal, upholding the A.O.'s calculations due to insufficient evidence and cooperation from the assessee. The appeal was rejected as the assessee failed to provide detailed information challenging the A.O.'s determinations on the valuation of work in progress and cost of sale. The decision was made on 02.04.2014.

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Issues Involved:
1. Valuation of opening stock.
2. Ascertainment of cost of sale.
3. Assumption regarding additions evenly made for the entire building.
4. Formula adopted for adjusting land owner's share.
5. Arithmetical accuracy of calculations.
6. Application of cost method despite ITAT's directions.

Detailed Analysis:

1. Valuation of Opening Stock:
The assessee contested that the A.O. wrongly appreciated the directions issued by the ITAT regarding the valuation of opening stock, which disturbed the previous year's results. The ITAT had previously set aside the issue of valuation of work in progress to the A.O. with specific observations and directions. The A.O. worked out the difference in closing work in progress at Rs. 32,46,099/- due to the lack of information furnished by the assessee. The CIT(A) confirmed the A.O.'s working, noting that the method adopted by the assessee left certain work in progress in the books even after project completion, which was deemed incorrect.

2. Ascertainment of Cost of Sale:
The assessee argued that the A.O. did not follow ITAT's directions regarding the ascertainment of cost of sale, which should not be less than the contract price. The ITAT had previously observed that the cost of the completed shop cannot be less than the contracted price payable to the contractor or the price incurred by the company itself. The A.O. was directed to consider the cost of construction incurred by the assessee on the area belonging to the landlords. However, the assessee failed to provide complete details of the area sold year-wise, leading to discrepancies in the cost of sale calculations.

3. Assumption Regarding Additions Evenly Made for the Entire Building:
The assessee contended that the A.O.'s assumption that additions were evenly made for the entire building was arbitrary and incorrect. The A.O. had divided the total area of construction, attributing 80% of the additions to the area sold and 20% to the unsold area (landowner's share). This resulted in a calculated rate of Rs. 319.94 per sq. ft. for the cost of the sold area. The closing work in progress was then arrived at by subtracting the cost of sales made during the year from the total available saleable area.

4. Formula Adopted for Adjusting Land Owner's Share:
The assessee argued that the A.O. adopted the wrong formula in adjusting the land owner's share. The A.O. had given the benefit of doubt to the assessee by holding that the major part of the addition during the year goes to the area sold, treating 80% of the additions to the area sold and 20% to the unsold area. The CIT(A) and ITAT found the A.O.'s working to be justified based on the facts presented.

5. Arithmetical Accuracy of Calculations:
The assessee claimed that the calculations made by the A.O. were arithmetically wrong. However, the ITAT found that the A.O.'s calculations were reasonable, considering the lack of detailed information provided by the assessee. The A.O. had worked out the cost of construction based on available data and previous assessments, which the ITAT deemed acceptable.

6. Application of Cost Method Despite ITAT's Directions:
The assessee argued that the A.O. wrongly applied the cost method despite clear directions from the ITAT. The ITAT had directed the A.O. to carry out necessary valuation as per law after giving the assessee an opportunity to furnish required information. The A.O. followed these directions, but the assessee failed to provide adequate details, leading to the confirmation of the A.O.'s working by the CIT(A) and ITAT.

Conclusion:
The ITAT dismissed the appeal of the assessee, confirming the A.O.'s working and calculations due to the lack of cooperation and detailed information from the assessee. The appeal was dismissed on the grounds that the assessee did not provide sufficient evidence to challenge the A.O.'s determinations regarding the valuation of work in progress, cost of sale, and other related issues. The order was pronounced in the open court on 02.04.2014.

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