TaxTMI 
TaxTMI 
2022 (2) TMI 381
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....ated 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 all the colonies developed by him with his family members @ 300/- pe....
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....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/-to Rs. 250/- per sq. ft. The sale value as declared by the appellant and the other family members in respect of the sale of plots has been accepted and no adverse view has been taken on that account.....
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....e 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 and his Family members A.Y. 09-10 A.Y. 10-11 A.Y. 11-12 A.Y. 12-13 Total 01. Keshav Vihar 0 0 77,84,503 0 77,84,503 02. Keshav Kunj 12,06,720 70,54,231 0 0 82,60,951 03. Keshav Ridhi Sidhi 0 0 2....
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.... 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 03 Vinod Garg 0.152 Agricultural land not developed 04 Asha Devi Garg 0.152 Agricultural land not developed Total-C 0.304 Grand Total 2.33 Total Area in SQ Mtrs 23310 1.5.3.2] That out of 23310 Sq Mtrs, 8970 Sq Mtr only related to the family of the assessee which was developed, 5450 Sq Mtrs related to the family members of his brother....
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....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 therefore the assessing officer has no option except for estimation. The said version of the assessing officer was not correct. Since, the assessee during the course of search assessment proceeding has explained that entire amount of development expenses were incurred by him through the contractor. That considering the location of the plot where developed plot was sold between the range of Rs. 200/- to Rs. 300/-, the estimation of development expenses at Rs. 300/- was exorbitant and very excessive. That in case of search assessment, the assessing officer was not justified in adding any amount ....
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.... 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 submitted before your honour that from the above it is clear that the addition as made by the A.O. to his Total income on account of development expenses is merely on presumption and that too when no incriminating documents were found during the course of search. 1.10.2] That sale of all the plots were duly executed by the assessee as per the prevailing market rates only and in most of the cases there was no difference in the Sale consideration received and value as per the valuation as adopted for the purpose for stamp duty purpose. 1.10.3] That assessee and his family members has maintained day-today books of accounts which were not rejected by the A.O. Moreso the A.O. has made addition in the A.Y. 2012-13 even when the assessee and his family members have ....
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....):- " 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 sale to arrive at the correct sale consideration. If this provision is read in the sense that if the AO is not satisfied with the explanation of the assessee then he 'may' or 'may not' send the matter for valuation to the DVO then in that case this provision would be rendered redundant. The word 'may' used in this sub-section signifies that in case learned AO is not satisfied with the explanation of the assessee, he 'should' refer the matter to the DVO for the mentioned purpose. Learned Authorised Representative has relied on the decision of the Hon'ble Supreme Court rendered in the case of Ashok Leyland Ltd. vs. Union of India & Ors. (1997) 105 STC 152 (SC) wherein it has been held that the deeming provisions are rebuttable one. We have examined the entire facts of this case in the light of the provisions and precedents relied before us. In our considere....
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....d 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 incurred by him and by the other family members before the assessing officer during the course of search assessment proceeding. We find that during the course of Assessment proceedings itself, the assessee has brought to the notice of Ld. Assessing Officer, that he along with 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 as well as appellate proceedings. During the course appellate proceedings before ....