AI Drafter 
TaxTMI 
TaxTMI 
2025 (2) TMI 397
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....rated on 14.08.2006 and assessee is a builder, developers, colonizers, civil contractors and maintainers of residential buildings, flats, colonies, township and commercial premises etc. The assessee is a subsidiary of M/s. Emaar MGF Land Limited having 100% shares in the assessee company. During assessment proceedings, assessee was asked to submit documentary invoices in respect of inventories shown in the Balance Sheet amounting to Rs. 70.64 crores with particulars of venue, area, completion stage and current status of the inventory. It was also asked to furnish copy of collaboration agreement against which liability of Rs. 70.74 crores was created with mode of payment received. In response, assessee has submitted that it has taken advance against collaboration agreement from its ultimate holding company for acquiring lands. The Assessing Officer observed that assessee has made and executed collaboration agreement on 21.02.2017 with its holding company for a consideration of Rs. 100 crore as interest free refundable advance/ security deposit. Further the Assessing Officer observed from the audited Balance Sheet that advance received towards collaboration agreement on 31.03.2017 is....
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.... filed detailed submissions. After consideration the detailed submissions of the assessee, ld. CIT (A) observed that he has gone through the written submissions and no details were filed on the advances received. Since no details were filed on the sources of advances and the source of the purchases of the properties, hence the addition made by the Assessing Officer is sustained and the appeal of the assessee is dismissed. 5. Aggrieved, assessee is in appeal before us raising following grounds of appeal :- "1. That, in view of the facts and circumstances of the case and in law, the assessment order dated 31.12.2019 passed by the Assessing Officer ('AO') under section 143(3) of the Income Tax Act, 1961 ('the Act'), the order passed by the National Faceless Appeal Centre ('NFAC/CIT(A)') in upholding the assessment order and also the addition made therein is illegal, bad in law and without jurisdiction. 2. That, in view of the facts and circumstances of the case, the addition of Rs. 3,12,41,144/- is illegal bad in law and deserves to be deleted. The Assessing Officer/NFAC has erred in not appreciating the basic fact that the transaction does not....
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....ld. AR of the assessee brought to our notice findings of the Assessing Officer at pages 25 & 26 of the paper book. He further brought to our notice page 89 of the paper book which is the Balance Sheet wherein assessee has declared the inventories of Rs. 70,64,18,294/- and further he brought to our notice other current liabilities which is recorded at Rs. 70,73,56,622/-. He also brought to our notice the similar amounts mentioned in inventories and other current liabilities which are carried forward amounts from 1st April, 2015. Further he brought to our notice page 202 of the paper book wherein the assessee has informed the Assessing Officer that the company is in the real estate business which had acquired the land in various parts of the country during FY 2005-06, 2007-08 and 2007-08. Further there is no movement in closing stock from so many years as there is no current feasibility of launching the project as of now. It was submitted that when the company launches any project then the movement in closing stock would be made as per the terms of the collaboration agreement. 7. Further ld. AR brought to our notice page 492 of the paper book which is the submissions/petition file....
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....ched with the purchase cost of land, The Appellant has inadvertently disclosed amount of Rs. 2,48,94,5641- as one of the line items being land, which is in reality is total of column C, D, E, and F of the abovementioned table (i.e. Rs. 6,22,965 + 2,24,19,600 + 6.31,999 + 12,20,000) i.e., these are the additional costs other than the registry value and stamp paper charges which have been incurred by the Appellant in order to acquire the land. Since, it was a misrepresentation thus in actual the land does not exist in reality hence, it will be not possible for the Appellant to provide sale 1 conveyance deed against this. It is hereby also submitted that all the cost which has been incurred by the Appellant against purchase of these land has been capitalized in the books of account i.e., the Appellant has not claimed expense against these cost in their profit and loss statement and since it has been not claimed in books of account as expense, the addition made by the Ld. AO is clearly unwarranted and bad in law hence, the addition made by the Ld. AO is clearly baseless and incorrect." 9. He submitted that ld.CIT (A) has not considered the above submissions made before him and susta....
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....ion made by the Assessing Officer. 12. After considering the submissions made before us, we observed that as far as Item No.5 is concerned, assessee has submitted additional evidences in the form of sale deed which tallies with the itemwise inventories submitted before the Assessing Officer. Since the relevant information is already submitted by the assessee in the form of additional evidences before the ld.CIT (A) which ld. CIT(A) has failed to acknowledge the same. In the result, we are inclined to allow the above claim made by the assessee. 13. With regard to the inventory list, which is listed at Item No.3 of Rs. 2,48,94,564/-, the assessee has submitted that these are additional costs incurred by the assessee which assessee has inadvertently listed as separate item of inventory which is otherwise should have been apportioned. Since this requires certain verification we deem it fit and proper to remit this issue back to the file of Assessing Officer with limited direction to verify the correctness of the claim of the assessee. 14. Coming to the addition made by the Assessing Officer under section 68 of the Act, we observed that the assessee has received advances from i....