TaxTMI 
TaxTMI 
2013 (7) TMI 221
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in granting the relief of Rs. 3,50,370/- out of disallowance of Rs. 6,38,750/- out of the building materials made by the A.O. in the remand report of the A.O. without appreciating the fact that the remand report failed to establish that these expenses were incurred from the project under consideration and thereby the genuineness of the claim of expenses could not be established. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the additions made by the A.O. @ 20% of depreciation claimed on motor car on the presumption of personal usage while upholding the decision of the A.O. in making disallowance @ 20% on motor expenses which was made on account of personal usage." 3. The brief facts of the case are that the assesee engaged in the business of "Builder & Developer" filed his return of income declaring total income at 'NIL'. Assessment was made u/s 143(3) of the Income Tax Act. The A.O. disallowed the expenditure debited on account of SRA (charges paid to Slum Rehabilitation Authority) to the tune of Rs. 56,42,0066/- stating the same to be of capital n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the circular dated 25.11.1997 that for claiming the TDR the entire amount of deposit of Rs. 20,000/- per rehabilitation tenement will become payable at the stage of claiming such TDR. The appellant has sold TDR by way of advance trading on 24.07.2006 which he acquired by Development Right Certificate No. SRA/619/Rehab, bearing Folio No.TDR/SRP/ES/M-13/Phase-I dated 20.07.2006. The circular very clearly says that it will be the deposit of Rs. 20,000/- per rehabilitation tenement will be payable for obtaining the TDR. Since the amount is in the nature of deposit which is a capital expenditure for the business of appellant as he is getting extra FSI in lieu of that in form of TDR. Under SRA Scheme the developer is entitled for the area for sale which is equal to the area given free of charge to the tenants. Obviously this TDR is over and above the sale consideration of free component of the building. The sale consideration is Rs. 77,50,080/-. Against this appellant has debited SRA charges of Rs. 56,42,066/-/- which includes maintenance deposits of Rs. 7,36,700/- and maintenance deposits of Rs. 11,20,000/-. Besides this all other expenses of Rs. 37,85,366/- are in the nature of inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... made by the AO on account of expenses on building materials. 7. The Ld. CIT(A) has made the above said deletion after proper appreciation of the evidence on the file. It is pertinent to mention here that during the appellant proceeding, the appellant had furnished certain evidence in the shape of bills and other details, which infact were not produced before the A.O. at the time of assessment proceedings. The CIT(A) called for remand report from the A.O. in this respect. The A.O. submitted his remand report vide letter dated 10.02.11, the relevant part of the same is reproduced as under:- "Your Honour vide captioned letter has directed to submit a remand report in the above mentioned case. Accordingly, the assesee was provided with an opportunity vide this office letter dated 07.01.2011 to explain with supporting relating to the addition made of Rs. 6,38,750/-. Mr. Abhay Kumar, CA along with Shri D N Sawant, father of assesee attended. They were asked to file confirmation of payments made to the parties. In response to the same, the representative of the assesee vide letter dated 07.02.11 filed details in Tapal in respect of following amounts:- i) Mahavir Enterprise....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vouched for Rs. 6,38,750/- the amount debited under the head "building Materials expenses' Rs. 1,91,652/- reflected as stores and Rs. 36,465/- reflected as 'Others' totaling to Rs. 2,28,117/- could not be found genuine. 6.5 The appellant in his reply stated that even these payments have been made by banking channels and in support of the same detailed ledger account along with bills have been furnished consequent to remand proceedings. I have gone through them and it is seen that the appellant's project has been completed in last year itself. It is also obvious from the fact that there are no closing stock reflected in the P&L Account. It is also a fact that majority of occupants of the building have taken possession and started occupying the place. In view of this the appellant's submission that still expenses by way of building material purchases and labour are being incurred was not entertained by the Assessing Officer during assessment proceedings though appellant has submitted that even after completion of the project there are job like aspalting coloring, storm drainage construction etc. which are done and hence these expenses were incurred. 6.6. I have gone through th....