TaxTMI 
TaxTMI 
2023 (5) TMI 739
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....t the appeal filed by the revenue in ITA No. 96/Hyd/2019. For the sake convenience, both the appeals as well as the cross objections were heard together and are being decided by this common order. 2. There is a delay of '88' days in filing of the cross objection by the assessee in CO.No.14/Hyd/2019. The assessee has filed a condonation application along with an affidavit explaining the reasons for such delay in filing of the Cross Objection. After considering the contents of the condonation application filed along with the affidavit and after hearing both the sides, the delay in filing of the cross objection by the assessee is condoned and the cross objection is admitted for adjudication. 3. First we take-up ITA No.2236/Hyd/2018 for AY 2012-13 as the lead case. 4. Facts of the case, in brief, are that the assessee is an individual and a member of the Legislative Council of Andhra Pradesh. He derives income from salary and income from hiring of vehicles. He also derives agricultural income. He filed his return of income for the impugned assessment year on 28.06.2013 by admitting total income of Rs.4,22,180/- and agricultural income of Rs.14,20,400/-. 5. In this case, inf....
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....21,18,49,090 Super structure value per sq.ft 2286.059027 6. He further noted that the land owners forfeited 1881.30 sq.yds or 16931.69 sq.ft to the developer. He therefore computed the value of 16931.70 sq.ft of land which is equal to 50,881 sq.ft of super structure allotted to three land owners. The value of such super structure @Rs.2,286/- on 50,881 sq.ft worked out to Rs. 11,63,13,966/-. Finally, the AO computed the taxable short term capital gain in the hands of the assessee at Rs. 73,71,660/- by observing as under:- 8.2 the built up area of each flat and the total no flats and total super structure of land owners are as under:- Flat No. Built up area in Sq.ft No.of flats S.V.S.K.Reddy Flats M.Bhagya Lakshmi Flats B.Preethi Reddy 1 2513 2 5026 2 5026 2 5026 2 2960 1 2960 1 2960 1 2960 3 2870 2 5740 1 2870 4 2362 1 2362 1 2362 5 2957 1 2957 1 2957 1 2957 6 2359 2 4718 Total in sq.ft 6 16683 6 16175 7 18023 R....
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....ies is Rs. 1,25,00,000/- and Rs.50,00,000/-(1,50,000/3) respectively and registration expenses incurred there on is Rs.16,47,465/- and Rs.1,30,663/-(391990/3) respectively. Accordingly, the value of above immovable properties including registration expenses works out to Rs.1,92,78,128/- (i.e. 12500000+5000000+1647465+130663). The difference of Rs. 36,95,045/- between the value shown in Balance sheet of Rs.22973173/- and calculated as above of Rs.19278128/- was neither explained by the assessee nor produced the relevant information. Hence, the cost of acquisition of assets were taken as per the value reported in purchase documents.) The cost of acquisition of 1042.07 Sq.Yds of land vide General Power of Attorney in Regd.Document No.55/2009 dated 03.02.2009 of SRO, Banjara Hills, Hyderabad for a consideration of Rs.1,50,00,000/- and the registration expenses incurred is Rs.3,91,990/-. The cost of acquisition of the land to the landlords is worked out to Rs. 1,53,91,990/-. The cost of acquisition of undivided share of land i.e.45.09% of 1072.32 sq.yds is works out to Rs. 69,40,248/@ 45.09% of Rs.1,53,91,990/-. The cost of acquisition of land to each land lord is Rs.23,13,416/....
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....on, the developer handed over residential house to the appellant. He, therefore, claimed that he is entitled for exemption u1s 54F in proportion to 3130/4172. In this regard, the appellant relied on the following decisions: The High Court of Andhra Pradesh in the case of CIT vs. Syed Ali Adil dated 20.12.2012 reported in (0213) 33 taxmann.com 212 held that for the purpose of deduction u/s 54F any number of flats can be contained in one building. This view is adopted by the Hon'ble ITAT, Hyderabad in the case of Vittal Krishna Conjeevaram vs. ITO dt. 10.07.2013 reported in (2013) 36taxman.com 542 and in the case of Sri Syed Irfan Jaffer, j Hyderabad Vs. ITO, Ward 6(1), Hyderabad in ITA No.465/Hyd/2013 and also in the case of ACIT vs, Smt. Fazlunnisa Begum reported in ITA No.66/Hyd/2017. 5.7 I have carefully considered the submissions made by the appellant. As per the information available on record the appellant is not in possession of any other residential house. The appellant entered Development Agreement cum GP A on 03 day of December, 2011 and as per the agreement the appellant along with two others entered into development agreement according to which the ....
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.... allowing the exemption u1s 54F of the IT Act, under the facts and the circumstances of the case 4. The Ld. CIT (A) has admitted additional evidence regarding conditions to be fulfilled u/s 54F of the Act without giving the opportunity to AO to examine the same as required under Rule 46A, since the assessee hadn't claimed the exemption before the AO and AO had no occasion to examine the same. 5. Whether Ld. CIT(A) is right in directing the AO to adopt cost of construction at Rs.1,370/- per sq.ft as against the Rs.2,286/- per sq.ft. adopted by the AO, under the facts and the circumstances of the case 6. The Ld.CIT(A) erred, under the facts and the circumstances of the case, in deleting the addition of Rs.50,66,508/- made u/s. 68 of the IT.Act as the appellant had not discharged his onus of establishing the creditworthiness and genuineness of the transaction as required. Reliance is placed on the decision of the jurisdictional AP HC in the case of Dhanalakshmi Steel Retroling vs CIT AP 228 ITR 780 7. Any other additional ground that may be urged at the time of appeal hearing. 11. The assessee has raised the following ground in the Cross Obje....
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.... the AO with a direction to give an opportunity to the assessee to substantiate with evidence to his satisfaction that the assessee did not possess any residential house in his name. The AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the revenue on this issue are accordingly allowed for statistical purposes. 14. Ground of appeal No.5 by the revenue and the only ground raised by the assessee in the cross objection relates to the cost of construction at Rs. 1370 per sq.ft by the ld.CIT(A) as against Rs. 2286/- per sq.ft adopted by the AO. 14.1 After hearing both the sides, we find the AO adopted the cost of construction per sq.ft at Rs.2286/-, the details of which are given at para No.5 of this order. We find the ld.CIT(A) reduced such cost of construction per sq.ft to Rs. 1,370/- by observing as under:- 5.6 Ground Nos.4 and 5 are with regard to determination of sale consideration. The assessing Officer in the assessment order arrived at the cost of construction of the property at Rs.2286/- per sft. It is also found by the Assessing Officer that 92,670/- sf....
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....e assessee in the Cross Objection are accordingly allowed for statistical purposes. 16. Ground of appeal No. 6 by the revenue relates to the order of the ld.CIT(A) in deleting the addition of Rs. 50,66,508/- made u/s. 68 of the I.T.Act. 17. After hearing both the sides, we find the AO made addition of Rs. 65,66,508/- on the ground that the above figure appears in the balance sheet as on 31.03.2012 and although, the assessee produced the details of sundry creditors and confirmation letter from the creditor M/s. V. Paveen Kumar Reddy & Co, Kadapa for Rs. 50,66,508/- and copy of the acknowledgment of the income tax return filed for AY 2012-13, however, the assessee did not substantiate the commercial expediency and utilization of loan for business, date of borrowal, mode of receipt and genuineness of transaction etc. We find the ld.CIT(A) deleted the addition, the reasons of which are already reproduced in the preceding paragraph. It is the submission of the ld.counsel for the assessee that the above amount is outstanding since 01.04.2010 and therefore, the same should not have been added in the AY 2012- 13. Since the confirmation letter filed before the AO shows that the same a....
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.... 323 wherein it held that assessee is not entitled to claim exemption which was not made in the Return of Income. 4. The Ld. CIT (A) has admitted additional evidence regarding conditions to be fulfilled u/s 54F of the Act without giving the opportunity to AO to examine the same as required under Rule 46A, since the assessee hadn't claimed the exemption before the AO and AO had no occasion to examine the same. 5. Whether Ld. CIT(A) is right in directing the AO to adopt cost of construction at Rs.1,370/- per sq.ft as against the Rs.2,286/- per sq.ft. adopted by the AO, under the facts and the circumstances of the case 6. whether the CIT(A) is right in directing the AO to delete the creditors of Rs.1,01,99,767/- under the facts and circumstances of the case. 7. whether the ld.CIT(A) is right in directing the AO to disallow only 30% of the agricultural income claimed by the appellant, under the facts and circumstances of the case, since the agricultural income claimed by the appellant is significantly higher than the agricultural income claimed by the appellant for preceding and succeeding assessment years. 8. Any other additional ground....
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....tion 68 of the Income tax Act. After considering the facts and circumstances of the case, I am of the view that the creditors of the preceding years cannot be added for the year under consideration and hence the AO is directed to delete the creditors of Rs.1,01,99,767/- pertaining to earlier years and balance creditors of this year to the tune of Rs.11,40,000/- is confirmed. 23. We do not find any infirmity in the order of the ld.CIT(A) on this issue. Since the ld.CIT(A) has given a finding that creditors to the extent of Rs. 1,01,99,767/- belong to the earlier year and are brought forward balances for which addition u/s. 68 cannot be made on account of creditors of the preceding years, therefore, in absence of any contrary material brought to our notice, we do not find any infirmity in the order of the ld.CIT(A) on this issue. Accordingly, the ground raised by the revenue on this issue is dismissed. 24. Ground of appeal No.7 relates to the order of the ld.CIT(A) in directing the AO to disallow only 30% of the agricultural income. 24.1 After hearing both the sides, we find the AO made addition of Rs. 9,25,000/- out of the agricultural income of Rs. 12 lakhs shown by the as....
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....3-14, assessee has shown 'nil' agricultural income, the AO averaged the income of the three years and gave credit of only Rs. 2,75,000/-. Similarly, the ld.CIT(A) on the basis of the certificate issued by the MRO and land holding of the assessee directed the AO to restrict the disallowance to 30% of the agricultural income for the year under consideration which is also without any basis. Considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion that disallowance of 50% of the agricultural income in absence of any details for sale of the produce and towards expenses for earning agricultural income will meet the ends of justice. We therefore direct the AO to restrict the disallowance to 50% of the agirucltural income as against 30% restricted by the ld.CIT(A). The ground raised by the revenue on this issue is partly allowed. 27. There is one more issue raised by the assessee in the cross objection i.e. confirming the addition of Rs. 11,40,000/-. So far as the addition of Rs. 11,40,000/- is concerned, the ld.CIT(A) sustained the same on the ground that creditors to the tune of Rs. 11,40,000/- relate to AY 2012-13. However, he....