Tribunal grants assessee's appeals, confirms land cost, and partially overturns AO's additions.

The Tribunal allowed the appeals of the assessee for the assessment years 2009-10, 2010-11, and 2011-12, partly deleting the additions made by the AO and confirming the cost of acquisition of land as claimed by the assessee, with certain adjustments.

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Issues Involved:
1. Addition on account of car parking space charges.
2. Addition representing additional consideration received by the assessee.
3. Calculation of the cost of acquisition of land.

Issue-wise Detailed Analysis:

1. Addition on Account of Car Parking Space Charges:

The primary issue raised in grounds Nos. 2 to 2.5 across all three appeals concerns the addition on account of car parking space charges upheld by the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee, an individual deriving income from long-term capital gains, was subjected to a survey under Section 133A. During the survey, it was discovered that the assessee had entered into a Joint Venture Agreement with a construction company for property development in Kerala and had received flats as part of the joint venture. The assessee admitted to charging Rs. 2.5 lakhs per flat for car parking space for six flats, as recorded in a yellow diary. However, the Assessing Officer (AO) interpreted the statement to imply charges for more flats and made additional assessments. The Tribunal found that the AO did not provide substantial evidence to support the additional charges beyond the six flats mentioned in the yellow diary. Therefore, the Tribunal deleted the excess additions made by the AO.

2. Addition Representing Additional Consideration Received by the Assessee:

The second issue raised in Ground Nos. 3 to 3.5 for assessment years 2009-10 and 2010-11 pertains to the addition of alleged additional consideration received by the assessee. The assessee admitted to receiving Rs. 25,80,000 as additional consideration from one buyer in the assessment year 2009-10. However, the AO assumed additional consideration from other buyers and made further additions totaling Rs. 51,60,000 for that year and Rs. 87,11,000 for the assessment year 2010-11. The Tribunal noted that no evidence was found during the survey to support these additional considerations, and the statements from the purchasers denied any such payments. Consequently, the Tribunal deleted the additions made by the AO and confirmed by the CIT(A) for both assessment years.

3. Calculation of the Cost of Acquisition of Land:

The third issue, raised in Ground Nos. 4 to 4.6 for assessment years 2009-10 and 2010-11, and Ground Nos. 3 to 3.6 for assessment year 2011-12, involves the computation of the cost of acquisition of 2.38 acres of land in Cochin, Kerala. The assessee claimed a cost of Rs. 10,05,28,650, supported by a detailed breakdown of expenses, including the purchase price, commission, registration fees, and other related expenditures. The AO accepted the total expenditure but limited the cost of acquisition to Rs. 4,49,33,080, citing unsupported cash payments. The Tribunal reviewed the agreement and supporting documents and found that the agreed rate per cent and the payments made were genuine and accepted by the Revenue. The Tribunal allowed the cost of acquisition at Rs. 9,88,58,190, including documented expenses but excluding unrelated costs like vehicle maintenance and rent.

Conclusion:

In conclusion, the Tribunal allowed the appeals of the assessee for the assessment years 2009-10, 2010-11, and 2011-12, partly deleting the additions made by the AO and confirming the cost of acquisition of land as claimed by the assessee, with certain adjustments. The order was pronounced on 12th July 2018, at Chennai.

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