2022 (4) TMI 95

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....o Rs. 5,81,04,300/- in the hands of the assessee shareholders, i.e. Shri Ashok Thankappan Nair and Smt. T. Lekha. 2. Shri B. Ramakrishnan, CA represented the assessee and Shri Shantham Bose, CIT-DR represented Revenue. 3. We have considered the rival contentions and perused the material on record. It is not in dispute that the residential property belonging to Mr. Ashok Thankappan Nair and Smt. T. Lekha (assessees herein) were constructed for Rs. 5,81,04,300/- over a period of 4 years during the financial years 2012-13 to 2015-16. This sum was admittedly spent by M/s. Artech Realtors Pvt. Ltd. on behalf of the assessees. Admittedly, the assessees are directors in Artech Realtor Pvt. Ltd. having substantial voting power of more than 10 per....

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....rove that the company, i.e. M/s. Artech Realtors Pvt. Ltd. had taken up this project of construction of residential house on commercial basis through the said work is done for the purpose of the directors of the assessee company. Hence it can be safely construed that the work had been done in the normal course of business by the company on behalf of the directors. Since the transaction is carried out in the normal course of business of a company, even though said activity is carried out for the Directors of the said company, there cannot be applicability of provisions of Section 2(22)(e) of the Act as it would fall within the exception clause. Hence in these circumstances, the cost of construction of residential house carried out in the nor....

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....onstruction of the residential premises. The learned A.R. placed on record the consequential assessment order under Section 143(3) r.w.s. 263 of the At dated 20.03.2020 wherein the learned DVO had determined the value of the property at Rs. 5.56 crores without considering the cost of land and moveable furniture, etc. We find that the assessees had claimed the cost of construction at Rs. 5,81,04,300/-. 8. When all these facts were confronted to the learned D.R., he vehemently argued that the learned AO had passed completely non speaking orders both under Section 153A in the case of Shri Ashok Thankappan Nair and under Section 153C in the case of Smt. T. Lekha. Hence the Pr. CIT is fully justified in invoking the provisions under Section 263....