AI Drafter 
TaxTMI 
TaxTMI 
2019 (10) TMI 1571
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....noring the calculation error pointed out in the rectification petition. For this assessee has raised the following ground NO. 1 to 6 as under : - "1. Because, the Ld. CIT(A) has erred in law and on facts in upholding the addition of Rs. 6,5141,621/- made in the assessment order. 2. Because, the Ld. CIT(A) has erred in law and on facts in holding that the entire amount of Rs. 8,51,00,000/- was received during the impugned assessment year. 3. Because, the ld. CIT(A) has erred in law and on facts in holding that the entire amount of Rs. 8,51,00,000/- received overa span of the three assessment years was chargeable to tax in the impugned assessment years. 4. Because, the ld. CIT(A) has erred in law and on facts in holding that the proportionate land cost of freehold area was Rs. 1,99,58,379/- ignoring the calculation error pointed out in the rectification petition as well as before him. 5. Because, the ld. CIT(A) has erred in law and on facts in holding that appellant was not entitled to set off SRA costs against Rs. 8,51,00,000/- received on account of the development agreement. 6. (i) Because, the ld. CIT(A) has erred in law and o....
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....ed consideration of Rs. 89.51 crores would compute at Rs. 1,99,58,379. Accordingly, the AO computed profits of Rs. 6,51,41,621 as profits or gains from transfer of development rights. The assessee has submitted that the AO had failed to understand the nature of business in which the appellant had sought to develop the property by typing up with independent developer raising funds, constructing rehab building, getting the developer to construct and handover the assessee's share of area and finally earn profit out of selling share of free sale area. The construction and sale of free land building would be based on the successful completion of the Slum project i.e. the rehab building. The following date event chart may be referred to - Date Event 24.04.2009 Revised letter of intent from SRA granting 2.910 FSI 28.07.2009 Obtained commencement certificate from SRA 24.06.2009 Agreement between M/s Prabhav Properties and M/s Raajyam Realty LLp. 02.01.2012 Intimation of approval issued by SRA 04.06.2012 Obtained occupancy permission for part project from SRA 10.10.2012 Obtained commencement certificate for free sale area 22.03.2013 ....
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.... The question under appeal is also the cost to be considered to be reduced from the sales price. The total land cost is R784,67,971. The assessee has argued that the cost of construction of the rehab project should be considered as cost and allowed as a deduction. I do not agree with this view of the assessee. The assessee has received the consideration for transfer of development rights. Thus, the cost of the same will have to be reduced, which in this case would be the proportionate land cost for development of the tree sale building. The cost of construction of the rehab building has no relevance here except that the costs have been met by the assessee from the consideration receive which has impacted the assessee's cash [low and not the taxability. As regards the total area of land, the assessee had filed a rectification application with the AO requesting that the total land area be considered at 2130 sq. meters as against 2855.90 sq. meters. The AU disposed off the rectification application stating that the area as per development agreement works to 2855.90 meters. The AO has rightly held in his order that in the substance all the develop....
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.... Santacruz East Rs. 12025/- per sqr feet 12025 X 11223 13,49,56,575.00 5. He argued that the above detail was as on 31.03.2019 and project would be completed within 6 months i.e. during the financial year ending as on 21.03.2020. The assessee filed a letter dated 27.03.2019 which read as under: - "In this connection, and as required by the Honourable Bench, please find enclosed a statement showing the projected details of the Vakola Project upto 31st March, 2019. It is expected, as mentioned during the course of hearing that the project would be completed within six months, that is, during the financial year ended 31st March 2020. Further, on perusal of the aforesaid statement, it can be seen that upon completion, the project is expected to make a profit of approximately Rs. 10.40 crores, which will be included in the computation of total income for income-tax assessment year 202021 in as much as our clients are following the project completion method for calculating their area where the project is being developed. This is the minimum profit that our clients expect though the ultimate realization may be on higher side." 6. The as....