TaxTMI 
TaxTMI 
2019 (11) TMI 580
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....the collaboration agreement. The reasons given by the ld AO are as under:- "4.7 Addition on account of collaboration During the year under consideration, the assessee entered a collaboration agreement with Mrs. Shashi Soni w/o Lt. Sh. Madan Mohan Soni for developing residential flats consisting 5 floors including basement at Plot no.C-3/256, Janak Puri, New Delhi. The size of the Plot was 142.53 sq.mt. and on the plot 5 floors was constructed after demolishing the old structure. The portion of the collaborate agreement is reproduced as follows: "NOW THEREFORE IT IS HEREBY AGREED, DECLARED, AND CONVEYED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS;- 1. That the subject matter of this collaboration agreement between the First Party and the Second Party is the existing property bearing No.C-3/256, measuring 142.53 sq.mtrs., situated at Janak Puri, New Delhi, for utilizing the same for construction of the new/fresh building consisting of Basement, Ground Floor, First Floor, Second Floor & Third Floor. 2. That the Developers/Builders/Second Party undertakes to develop the "Said Property at his own cost and expenses and with his resources and ....
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....loper/Builder/Second Party Share:- Entire second Floor, in/of the said property along with proportionate undivided, indivisible and impartiable ownership rights in the land underneath the said property measuring 180 sq.yds. All the common areas and facilities such as entrance, passages, staircase, lift, sewer lines, shafts, under ground/over head Water Tanks and space for electric and water meters etc. shall be used commonly by all the owners/occupance of the building. And it is agreed that in addition to the floor allocation as specified above the Developer/Builder/Second Party shall pay a sum of Rs. 13,50,000/- (Rupees Thirteen Lacs Fifty Thusand Only) as proportionate cost of land for its share to the First Party/Owner and also for equalizing their share in the allocation of the floors in the said property. That the above said Entire settlement amount of Rs. 13.50,000/- (Rupees Thirteen Lacs Fifty Thousand Only) has been paid by the Second Party/Developer to tlio First Paity in the following manner:- Rs. 5,00,000/- vide cheque No.612874 dated 14.04.2010 drawn on Punjab & Sind Bank. Rs. 8,50,000/- vide cheque No.452268, dated 01.07.201....
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....ssessee in the mentioned reply. 2. During the mentioned year, the Delhi Development Authority (DDA) allocated some flats by use of draw of lots. DDA is a Govt, organization which develops and sales flat in no loss no profit basis and the cost of construction is supposed to be the lowest available in the market. The cost of construction for a DDA flat located in Vasant Kunj measuring approx. 60 sq.mt. (LIG Flat) was approx. Rs. 17.50 lakh thereby making the rate of construction per sq.ft. is approx. Rs. 2705/- (17,50,000/647) which also is almost 6 times of the amount quoted by the assessee as cost of construction. 3. Market value of the flat which is under discussion was approx 1.80 to 1.85 crore during the year under consideration. The assessee has mentioned that the price of the flat even today is not 2 times of the price at which the flat was alleged to be sold. He might have quoted the price keeping in mind the circle rate of that area and not on the basis of market value. It is well-known fact that the market value of the real estate of the area under consideration is much higher than the prevailing circle rate arid to reduce the gap, the circle rate of diffe....
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.... 3. According, the assessment order u/s 143(3) of the Act was passed on 31.03.2015. The assessee challenged the same before the ld CIT(A) who deleted the addition as per para No. 8 of his order as under:- "8. Ground No. 8 to addition of Rs. 2,05,85,062/- made by the AO. The fact of the case is that the AO found that the appellant had entered into a collaboration agreement with Smt. Shashi Soni for developing residential flats consisting of five floors including basement at Plot no. C-3/256, Janak Puri, New Delhi. As per the agreement, the appellant was required to bear the entire cost of construction against which he got his share in the developed property as entire 02nd floor. The 02nd floor was sold by the appellant during the year under consideration at a sale consideration of Rs. 40 lac but the AO found that the market price of the flat was much higher than what the appellant has shown. Thereby, he estimated the same at Rs. 1,65,00,000/- and thereby an addition of Rs. 1,25,00,000/- was made. The AO had also made an addition u/s 69C as the appellant had shown cost of construction expenses of Rs. 34,27,813/- of the entire floors whereas the AO estimated the same at Rs....
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....ay deemed to be the income of the assessee for such financial year. But in the present case, the AO has not brought any material on record to establish that an excess expenditure was incurred. The appellant has also relied upon the following judgments: i) CIT vs. Lubtec India Ltd. 311 ITR 175 (Del); ii) CIT vs. C.L. Khalri 282 ITR 97 (MR); iii) Prabhu Dayal Lallu Ram vs. ITO 63 TTJ 557 (Del); iv) M.P. Mallival vs. JCIT10 SOT 319 (Hyd)(TM); v) ITO vs. L.N. Mehta (HUF) 77 TTJ 63 Jodhopur); vi) ACIT vs. K.H. Dhamdhere 19 SOT 201 (Coch); vii) Harakchand P. Vora vs. ACIT 68 TTJ 417 (Mum); viii) Pradip C. Patel vs. DCIT 58 TTJ 409 (Ahd); ix) Lakshmi Jewellery vs. ACIT 73 TTJ 981 (Mad); x) Om Prakash Sharma vs. DCIT 4 SOT 369 (Jaipur); xi) ITO vs. Dr. Anand Meenawat 43 TTJ 213 (Jaipur); xii) Mahaan Food Ltd. vs. DCIT 27 DTR (Del)(Trib) 185." As per the language used by the Legislature in section 69C, the burden is on the A.O. to prove that the assessee has "incurred" an expenditure then the onus is shifted on the assessee to prove the source. (H" BENCH: MUMBAI Shri Kishore ....
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....nsidered the facts and circumstances of the case, submission of the appellant and perused the assessment order. I find merit in the argument of the appellant that the AO has not brought any material on record to establish the fact that an excess expenditure was incurred in construction of the building other than the expenditure shown by him. Further, there was also no material brought on record to substantiate his finding that there was more sale consideration was received by the appellant beyond what he has shown whereas the appellant has brought on record the sale instances of the nearby area to substantiate that the prevailing market rate shown by him was reasonable and further the registered valuer's report substantiates the fact that the expenditure incurred by the appellant to construct the building was reasonable. In view of*above discussion, the appeal on this ground is allowed. 9. Ground no.9 relates to addition of Rs. 34,800/-. The fact of the case is that the appellant claimed deduction under chapter VIA of the IT Act towards tuition fee, however, no supporting document was filed. Therefore, the claim of the appellant was disallowed. However, during the appe....