TaxTMI 
TaxTMI 
2022 (2) TMI 381
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.... and Seizure operations u/s. 132 of the Act were initiated in the Ambika Group by the DDIT(Inv.), Indore on 19.01.2012. Subsequently, notices u/s. 153A of the Act were issued to the assessee and in response, the assessee furnished returns for the respective assessment years. Thereafter, the case of the assessee was selected for scrutiny and necessary notices u/s. 143(2) and 142(1) of the Act served upon the assessee. Various details were called for by the Assessing Officer which were replied by the assessee. It was explained by the assessee that along with his Family members he has developed following three colonies:- S.No Name of the Colony 1 Keshav Kunj 2 Keshav Vihar 3 Keshav Riddhi 3. During the course of assessment proceedings the Ld. A.O. asked the assessee to provide the complete details in respect of development expenses incurred by him on development of these colonies. The assessee provided year-wise and assesse-wise complete details in respect of these colonies developed by him along with his other family members. However, the Ld. A.O. added an amount of Rs. 3,70,01,954/- to the total income of the assessee by estimating the development cost of ....
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....pment expenses incurred for the three colonies viz. Reshav Vihar', `Keshav Kunj' 85 Reshav Riddhi Siddhi' are not reflected in the regular books of accounts and that no details of these expenses have been furnished is incorrect. During the assessment proceedings vide letter dated 08/01/2014 it was clearly stated that the appellant and his family members had entered into an agreement with Shri Mukesh Sangai for development of the colonies. The said agreements were also seized during the course of the search. The fact that the development expenses have been incurred through the contractor was clearly explained to the Assessing Officer. All the different individuals have debited the development expenses in their books of accounts. The statement giving year wise development expenses incurred by the different individuals was furnished during the course of assessment proceedings. During the appellate proceedings the copy of ledger accounts of the development expenditure along with the relevant bills and copy of bank statement reflecting the amount of development expenditure has been submitted. 3.4.3 Most of the plots in these colonies have been sold between Rs. 200/-....
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....ught on record by the Assessing Officer that the undisclosed development expenses in respect of the three colonies have been incurred by the appellant on behalf of the whole family is not an acceptable, sustainable and justified approach. 5. The CIT-DR vehemently argued and relied on the order as passed by the Assessing Officer. 6. Per contra, Ld. Counsel for the assessee referred and relied on the findings of Ld. CIT (A). Ld. Counsel for the assessee also relied upon the written submission which is reproduced as under:- "1.1] That in the only ground of appeal the department has challenged the Addition made by the A.O. of Rs. 3,70,01,954/- on account of Undisclosed expenses incurred on development of 3 colonies but deleted by the Ld. CIT(A). 1.2] That as submitted above the assessee along with his other family members has developed following three colonies at Mandsaur:- S.No Name of the Colony 1 Keshav Kunj 2 Keshav Vihar 3 Keshav Riddhi 1.3.1] That year wise development expenses incurred by the assessee and his family members are as under:- S.No Name of Colony Year-wise Development Expenses incurred by the assessee ....
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....me of the Owner Area in Hectare Total area in Sq Fts Saleable area in Sq Fts 1 Vinod Ku Garg & Other Family members 0.706 75994 59195 Total- A 0.706 75994 59195 2 Other Investors not related to the assessee's family 1.320 142085 88421 Total- B 1.320 142085 88421 Grand Total 2.026 218079 147616 SQ Mtrs 20260 218079 147616 1.5.2.2] That out of 20260 Sq Mtrs, 7060 Sq Mtr related to the family of the assessee and 13200 Sq Mtrs of the other members not related to the assessee's family. 1.5.3.1] It was submitted before the Ld. A.O. that Keshav Kunj Colony is developed by the following persons which includes three members of the assessee and three members of his brothers family. Detail of the same is as under:- S.No Name of the Owner Area in Hectare Total area in Sq Fts Saleable area in Sq Fts 01 Vinod Ku Garg & Other Family Members 0.897 96522 65261 Total- A 0.897 96522 65261 02 Other outside investors 1.129 121505 Total- B 1.129 ....
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.... of the assessee. It was explained to the Ld. A.O. at the time of Assessment proceedings that most of the plots were sold in these colonies between Rs. 200/- to Rs. 250/- only. The sale deeds was duly executed and in most of the cases there was no difference in the valuation as adopted for the purpose for stamp duty purpose though, stamp duty valuation is not applicable in the case of the assessee and his other group members since, they have declared profit on sale of plot as business income. Thus the developments expenses as estimated by the A.O. at Rs. 300/- is arbitrary and have no leg to stand. 1.6.2] The sale value as declared by the assessee in respect of sale of plots was also accepted by the assessing officer. Hence, it is contradictory on the part of the assessing officer. That when he himself accepted sale consideration of plot between Rs. 200/- and Rs. 300/- in that case he was not right in estimating the development expenses of Rs. 300/- Per Sq Fts in addition to the cost of land. 1.6.3] The assessing officer while making addition to the development cost observed that detail and basis of development expenses were not provided by the assessee and theref....
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.... 213 15.07.2009 Shantilal S/oBherulal& Naveen s/o Shantilal 107 720 159000 221 2010-11 28.02.2011 Smt Rajkumari Vinodkumar Jain 36 1800 515500 286 17.01.2011 Smt Vishni W/o Ghanshyam 82 900 234500 261 Project: - Keshav Riddhi Address:- Survey No. 504, Bhuniyakhed Mandsaur Coloniser:- Vinod Kumar Garg & other members Year wise Detail of sale of plot at Keshav Siddhi Date of Registration Name of Buyer Plot No. Area (In Sq. Ft. Value Rate Per Sqft 2011-12 19.03.2012 Virendra Kumar Sagarmal Jain HUF L-13 998.50 225000 225 14.03.2012 Suresh Kumar S/o Bhanwarlal Kothari J-2 1474.5 362000 246 Photocopies of Registry as made by the assessee were also filed before the A.O. Copies of the same are also enclosed for your kind perusal. 1.8] That in view of the above it was explained to the Ld. A.O. that development expenses as incurred by the assessee along with his other family members was correct and proper. The A.O. however did not agreed with assessee submission. 1.10.1] It is submi....
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.... is evident that the AO has not pointed out any defect in the books /records / bills etc. and has not rejected books of account. That it is settled position of law that without rejecting the regular books of account as maintained by the assessee addition made on purely estimation is wrong. 1.11.2] That the assessee has supplied the xerox copies of bills of development expenses incurred by all the family members and all these bills were also produced before the Ld. A.O. which he has seen and verified but he has not commented on the genuineness of these bills and not pointed out any defects in these bills and hence not rejected the records maintained and produced by the assessee. 1.12.1] Hon'ble Jodhpur Bench of ITAT in the case of Meghraj Baid vs ITO reported in (2008) 114 TTJ (Jd) 841 : (2008) 4 DTR 509 has held ( refer Para 4 ):- " 4. After examining the provision extracted hereinabove in its letters and spirit, we are of the opinion that in case the AO does not agree with the explanation of the assessee with regard to lower consideration disclosed by him then he should refer the matter to DVO for getting its market rate established as on date of the sal....
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....isions of s. 50C(2) of the Act has rightly directed the AO to refer the properties to the valuation cell of IT Department for the purpose of valuation of the property and, thereafter, adopt the valuation for working out the capital gains. Since, the direction issued by the CIT (A) is in accordance with the provisions of s. 50C of the Act, we find no illegality or infirmity in the well-reasoned order of the CIT (A) and, accordingly, the same is upheld and ground of appeal taken by the Revenue is rejected." 1.12] That in the case of assessee the Ld. A.O. has neither rejected the books of accounts nor has referred the matter of determination of cost of construction to the Valuation officer and has merely estimated the Cost of Development expenses. That in view of the above , the addition so made by the assessing officer on estimated basis was rightly deleted by the Ld CIT(A). Hon'ble bench is hereby requested to approved the order of the Ld CIT(A)." 07. We have heard the rival contentions of both the parties and gone through the material available on record. On perusal of the same, we find that the assessee has duly provided complete details of development expenses as incu....