Nagaiah Kekkireni, Suryapet, Suryapet V. ITO, Ward-1, Suryapet, Suryapet

ITA 179/HYD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5674 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2010-2011
• Appeal Filed On: 06-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ESTHER N HANGAL
• Assessee Lawyers: SREELATA VOOKTKOOR
• Keywords: Cost of acquisition
• Section: 131; 69; 148; 44AD; 142(1); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 178 TO 180 / HYD/201 7 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 20 1 1 - 1 2 NAGAIAH KEKKIRENI , SURYAPET. PAN BHDPK 1670 B VS. INCOME - TAX OFFICER, WARD 1 , HYDERABAD. APPELLANT RESPONDENT A SSESSEE BY: S MT. SREELATA VOOKTKOOR RE VENUE BY: SHRI ESTHER N. HANGAL DATE OF HEARING: 2 8 / 1 1 / 201 8 DATE OF PRONOUNCEMENT: 31 / 01 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H E S E APPEAL S FILED BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDER S OF CIT(A) 3 , HYDERABAD, FOR AY S 2009 - 10, 2010 - 11 AND 20 1 1 - 1 2 . AS COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THE SAME WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. ITA NO. 178/HYD/2017 FOR AY 2009 - 10 2. BRIEF FACTS OF THE CASE ARE THAT A SURVEY U/S 133A OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT) WAS CONDUCTED AT THE BUSINESS PREMISES OF SHRI BEEREDDY JAIPAL REDDY ON 19/02/2013. DURING THE COURSE OF SURVEY, CERTAIN PAPERS BELONGING TO THE ASSESSEE WE RE FOUND AT THE PREMISES OF SHRI BEEREDDY JAIPAL REDDY. SUBSEQUENTLY, A NOTICE U/S 148 02/05/2015 WAS ISSUED AND SERVED ON THE ASSESSEE ON I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 2 06/05/2013. IN RESPONSE TO THE NOTICE, ASSESSEE VIDE LETTER DATED 07/06/2013 REQUESTED A COPY OF SWORN STATEMENT AND THE SAME WAS GIVEN TO ASSESSEE ON 08/08/2013. ASSESSEE FILED HIS RETURN OF INCOME ON 02/01/2014 ADMITTING A NET INCOME OF RS. 4,48,780/ - . ACCORDINGLY, NOTICES U/S 143(2) AND 142(1) WERE ISSUED AND SERVED ON THE ASSESSEE. A SWORN STATEMENT U/S 131 OF THE AC T WAS RECORDED FROM THE ASSESSEE ON 16/05/2013. AT THE TIME OF RECORDING THE STATEMENT, PAPERS IMPOUNDED DURING THE SURVEY AT THE PREMISES OF SHRI BEEREDDY JAIPAL REDDY WERE SHOWN TO THE ASSESSEE AND WAS ASKED TO EXPLAIN THE TRANSACTIONS CONTAIN ED IN THOS E PAPERS. 2.1 ASSESSEE PURCHASED AGRICULTURAL LAND ADMEASURING ACRES 3.03 GUNTAS IN SURVEY NO. 193/VU AT PILLALAMARRI ON 05/02/2009 VIDE REGISTERED DOCUMENT NO. 1099/2009 FROM SHRI BEEREDDY JAIPAL REDDY FOR A CONSIDERATION OF RS. 41.9 LAKHS. SIMILARLY, A SSESSEE ALSO PURCHASED A LAND IN SURVEY NO. 196 FROM TADEPALLI SAIDULU FOR RS. 9,22,050/ - IN THE NAME OF HIS WIFE SMT. K E KKIRENI RENUKA. SINCE THE PROPERTY WAS REGISTERED IN THE NAME OF THE ASSESSEE AND THE PURCHASE CONSIDERATION HAS RECORDED IN THE SWORN STATEMENT GIVEN BY SHRI BEEREDDY JAIPAL REDDY, AO ASKED FOR EXPLANATION AS TO WHY THE PURCHASE CONSIDERATION SHOULD NOT BE ADDED AS UNDISCLOSED INCOME, ASSESSEE SUBMITTED THAT ASSESSEE HAS PURCHASED THE ABOVE SAID LAND FROM SHRI BEEREDDY JAIPAL REDDY AT T HE REGISTERED VALUE OF RS. 10,67,455/ - AND HE AGREED FOR RS. 41.90 LAKHS AS PURCHASE VALUE TO BUY PEACE WITH THE DEPARTMENT. HOWEVER, HE MAINTAINED THAT IN GENERAL PRACTICE, IN PURCHASING THE LAND, A TOKEN ADVANCE IN EVIDENCE OF PURCHASE WILL BE GIVEN TO T HE LAND LORD AND THE REMAINING AMOUNT WILL BE PAID TO THE LANDLORD BY TAKING ADVANCES FROM THE PROSPECTIVE BUYERS. HE FURTHER SUBMITTED THAT WHATEVER THE AMOUNT OF PURCHASE CONSIDERATION I.E. RS. 10 LAKHS OR RS. 41.9 I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 3 LAKHS, THE PAYMENTS WERE MADE TO THE LANDLOR D OUT OF THE ADVANCES RECEIVED FROM CUSTOMERS. THEREFORE, HE OFFERED 8% AS NET PROFIT ON PURCHASE VALUE OF THE PROPER TY . 2.2 AO DID NOT AGREE WITH THE ABOVE SUBMISSIONS OF THE ASSESSEE AND MADE ADDITION OF RS. 42.84 LAKHS AS UNDISCLOSED INVESTMENT IN THE PROPERTY PURCHASED AND HE DID NOT AGREE WITH THE ESTIMATION OF INCOME AT 8% OF THE PURCHASE PRICE. 2.3 SIMILARLY, AO MADE ADDITION OF RS. 9,22,050/ - ON ACCOUNT OF THE UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE IN PURCHASE OF PROPERTY IN THE NAME OF HIS WIFE TO THE EXTENT OF RS. 9,22,050/ - . 3. AGGRIEVED WITH THE ABOVE ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A), THE ASSESSEE MADE THE FOLLOWING SUBMISSIONS: I) THOUGH THE LAND OF AC. 3.03 GUNTAS WAS PURCHASED FOR AN AMOUNT OF RS. 42,84,605/ - , THE REGISTERED VALUE IS ONLY RS. 10,76,455/ - II) THE SAID PROPERTY WAS DIVIDED INTO 43 PLOTS WHICH WERE SOLD IN RESPECTIVE FINANCIAL YEARS AS UNDER: FY NO. PLOTS SQ. YARDS CONSIDERATION 2008 - 09 02 1,083.19 1,10,000/ - 2009 - 10 40 9,696 9,77,000/ - 2012 - 13 01 195.5 59,000 III) THE ASSESSEE PURCHASED THE ABOVE LAND FROM THE ADVANCES RECEIVED FROM PROSPECTIVE BUYERS. SINCE HE DID NOT MAINTAIN ANY RECORDS, TAKING CLUE FROM SECTION 44AD TO BUY PEACE WITH THE DEP ARTMENT, PROFIT WAS ESTIMATED @ 8% OF PURCHASES . IV) THERE IS A TRADING LOSS OF RS. 40,30,999/ - . I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 4 PARTICULARS SQ.YRDS RATE/SQ. YRD. AMOUNT PARTICULARS SQ.YRDS RATE/SQ. YRD AMOUNT PURCHASES DOC. 1099/2009 DOC 7791/2008 14883 445.83 288 2068 4284667 922050 SALES DOC 1317/2009 DOC 1318/2009 CLOSING STOCK DOC 1099/2009 BY GROSS LOSS 602 482 10168 446 100 100 100 100 61000 49,000 1016900 48818 4030999 TOTAL 5206717 5206717 SUCH TRADING LOSS SHOULD BE SET OFF AGAINST THE INCOME ASSESSED AS PER SEC.71 OF I.T. ACT, 1961. (V) RELIANCE IS PLACED ON 1. HON'BLE GUJARAT HIGH COURT DECISION IN THE CASE OF CIT VS SHILPA DYEING & PRINTING MILLS PVT LTD. 2. AHMEDABAD TRIBUNAL DECI SION IN THE CASE OF M/S.K.R.AUTOMOBILES VS ACIT, CIRCLE - 2(1), BARODA. 3. HON'BLE MADRAS HIGH COURT DECISION IN THE CASE OF CIT VS CHENSING VENTURES. (VI) THE ASSESSEE ENTERED INTO AN AGREEMENT TO PURCHASE PLOT OF 600SQYRDS IN SURVEY NO.196 IN THE NAME OF HIS WIFE SMT.K.RENUKA FOR A CONSIDERATION OF RS. 9,22,050/ - . HOWEVER THIS AGREEMENT WAS NOT EXECUTED AND LATER ON WAS CANCELLED. WHEREAS THE ASSESSING OFFICER CONSIDERED UNDISCLOSED INVESTMENT OF RS .9,22,050/ - AS INCOME BASED ON THIS UNEXECUTED DOCUMENT. (VII) THE ASSESSEE OFFERED 8% AS INCOME ON THE AGREEMENT VALUE THOUGH THIS DOCUMENT WAS NOT EXECUTED. VIII) THE AGREEMENT WAS FOR 600 SQ.YARDS WHER E AS THE LAND REGISTERED IN THE NAME OF SMT. K. RENUKA, WIFE OF K. NAGAIAH, WAS ONLY FOR 446 SQ. YARDS AT A DOCUMENTED PRICE OF RS. 48,818/ - . IX) THEREFORE THE ADDITION MADE BASED ON UNREGISTERED DOCUMENT SHALL BE DELETED. 5. AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE, CIT(A) SUSTAINED THE ADDITIONS MADE BY OBSERVING AS UNDER: I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 5 A S STATED IN THE EARLIER PARAS THE APPELLANT DID NOT DID NOT MAINTAIN ANY BOOKS OF ACCOUNT AND THE RECEIPTS AND PAYMENTS WERE MADE IN CASH THE APPELLANT WAS NOT ASSESSED TO INCOME TAX PRIOR TO SURVEY. THEREFORE THE A O 'S ACTION IN ADOPTING THE PURCHASE VALUE AS PER THE IMPOUNDED MATERIAL IS CORRECT AND IS IN ACCORDANCE WITH THE LAW. FURTHER IN HIS TRADING ACCOUNT THE APPELLANT ADOPTED THE PURCHASE VALUE FOR THE TOTAL LAND OF AC.3.03 GTS AND PLOT OF 445SQYRDS AT RS.52,05,717/ - . WHEREAS THE SALES WERE SHOWN FOR TWO PLOTS AT RS. 1 ,10,000/ - AND THE LOSS WAS DETERMINED AT RS 40 ,30,999/ - , WH ICH HE DESIRES TO SET OFF AGAINST THE ASSESSED INCOME. WHEN THE INCOME RETURNED SHOWS 8% OF PROFIT THE QUESTION OF LOSS DOES NOT ARISE. IT IS RELEVANT TO MENTION THAT IF LOSS CLAIMED IS ALLOWED, THE INCOME ASSESSED WOULD BE LESS THAN RETURNED INCOME. 6. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE CIT (A) _ III DATED 29 T H DECEMBER, 2016 FOR THE ASSESSMENT YEAR 2009 - 10 IS CONTRARY TO THE LAW, FACTS AND IN THE CIRCUMSTAN CES OF THE CASE. 2. THE LD. CIT (A) - III ERRED IN CONFIRMING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INVESTMENT OF RS. 42,84,000/ - BASED ON THE SWORN STATEMENT OF THIRD PARTY WITHOUT ANY CORROBORATIVE EVIDENCE AND IGNORING THE SWORN STATEM ENT OF THE ASSESSEE. 3. ALTERNATIVELY THE ID. CIT (A) - III IS NOT PRUDENT IN HER ACTIONS WHILE REJECTING THE CLAIM OF LOSS FROM B USINESS OR PROFESSION STATING THAT IF THE LO SS CLAIMED IS ALLOWED, THE INCOME ASSESSED WOULD BE LESS THAN THE RETURNED INCOM E, IGNORING THE FACT THAT THE AO REJECTED THE RETURNED INCOME FROM BUSINESS OR PROFESSION AND ONLY TAXED THE UNDISCLOSED INVESTMENT UNDER THE HEAD INCOME FROM OTHER SOURCES. 4. THAT ON FACTS AND IN LAW, THE ID. CIT (A) - III HAS GRIEVOUSLY ERRED IN NOT A LLOWING THE SET OFF OF BUSINESS LOSS AGAINST THE ADDITION U/S.69 OF THE ACT AS PER PROVISIONS OF SECTION 71. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 6 7. IN AYS 2010 - 11 AND 2011 - 12 ALSO, THE FACTS AND GROUNDS ARE SIMILAR TO THAT OF AY 2009 - 10, E XCEPT THE QUANTUM OF ADDITIONS. 8. BEFORE US, THE L D. AR REITERATED THE SUBMI SSIONS AS MADE BEFORE LD. CIT(A). BEFORE US, SHE SUBMITTED T WO ALTERNATIVE WAYS OF TREATING THE TRADING ACTIVITIES OF SALE OF PLOTS AND TREATMENT OF UNDISCLOSED INVESTMENT ON PURCHASE OF PROPERTY. SHE SUBMITTED THAT THE UNDISCLOSED INCOME WHICH IS PART O F PURCHASE COST OF LAND SHOULD BE ALLOWED TO CLAIM AS EXPENDITURE FOR THE YEAR AND THE LOSS INCURRED BY THE ASSESSEE SHOULD BE ALLOWED TO CARRY FORWARD TO BE ADJUSTED IN THE SUBSEQUENT YEARS. SHE SUBMITTED ALTERNATE METHODS OF TREATMENT IN THE PAPER BOOK F ILED BEFORE US. 9. LD. DR SUPPORTED THE ORDERS OF REVENUE AUTHORITIES AND SUBMITTED THAT NEW ALTERNATIVES OR NEW EVIDENCE CANNOT BE SUBMITTED NOW. 10. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT IN THE SURVEY PR OCEEDINGS AT THE PREMISES OF SHRI BEEREDDY JAIPAL REDDY CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND . AS PER THE SWORN STATEMENT OF MR. JAIPAL REDDY, ASSESSEE HAS PURCHASED LAND FOR RS. 41.90 LAKHS. THE ASSESSEE MAINTAINED THAT HE HAS PURCHASED THE PR OPERTY FROM THE AMOUNTS COLLECTED BY HIM FROM THE PROMINENT PURCHASERS. HE DID NOT CONFIRM WHETHER HE PURCHASED FOR THE VALUE AS PER REGISTERED DOCUMENT OR AS PER THE VALUE MENTIONED IN THE SWORN STATEMENT GIVEN BY MR. JAIPAL REDDY. SINCE, ASSESSEE DO ES NOT HAVE PROPER SOURCES FOR SUCH HUGE INVESTMENT, TO BUY PEACE WITH THE DEPARTMENT, HE WA S WILLING TO DECLARE THE VALUE AS DISCLOSED BY MR. JAIPAL REDDY BUT WANTED TO TREAT THE DISCLOSED INCOME AS BUSINESS I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 7 LOSS, WHICH CAN BE CARRIED FORWARD. FURTHER, ASS ESSEE WOULD LIKE TO DECLARE THE BUSINESS PROFIT @ 8% ON THE PURCHASE VALUE OF THE PROPERTY. THE LD. AR HAS SUBMITTED PROFIT CALCULATION IN TWO DIFFERENT ALTERNATIVES. 1 ST ONE ON THE BASIS OF ADOPTING THE PURCHASE COST OF LAND ON REGISTERED VALUE AND ANOTHE R ALTERNATIVE ADOPTING THE VALUE OF PURCHASE AS PER SWORN STATEMENT OF MR. JAIPAL REDDY. AFTER CAREFUL CONSIDERATION, WE NOTICE THAT THE ASSESSEE HAD DECLARED AND ACCEPTED THAT THE VALUE OF THE PROPERTY PURCHASED BY HIM FROM MR. JAIPAL REDDY WAS AT RS. 42.84 LAKHS. AT THE SAME TIME, HE CLAIMS THAT THE ABOVE FUNDS WERE ARRANGED FROM THE CUSTOMERS AS ADVANCES. SINCE, ASSESSEE HAS NOT BROUGHT ANY COGENT MATERIAL IN SUPPORT OF THE ABOVE CLAIM, WE ARE INCLINED TO DETERMINE THE PURCHASE COST OF THE PROPERTY AT RS. 42.84 LAKH S. ACCORDINGLY, GROUND NO. 2 IS REJECTED. 10.1 FURTHER, ASSESSEE HAS COME UP ON APPEAL BY RAISING GROUND NOS. 3 & 4 ON THE ALTERNATIVE PLEA THAT THE TRANSACTIONS ARE BUSINESS TRANSACTIONS AND THE LOSS SUSTAINED BY THE ASSESSEE SHOULD BE ALLOWED. THE LOSS SUSTAINED SHOULD ALSO BE ALLOWED TO BE CARR IED FORWARD U/S 71. 10.2 WE HAVE CONSIDERED THE PROFIT & LOSS STATEMENT DRAWN BY THE ASSESSEE. THE ASSESSEE RECORDS THE PURCHASE COST AS PER THE ACTUAL COST AGREED WITH MR. JAIPAL REDDY BUT DECLARED SALES VALUE AS P ER THE REGISTERED SALE DEED, THEREBY, DECLARING HUGE LOSS. WE ARE ALSO NOT IN A POSITION TO ACCEPT SINCE THE PURCHASE COST IS DECLARED ON ACTUAL AGREED PRICE BUT THE SALES VALUES ARE DECLARED AS PER REGISTERED SALE DEED, WHICH IS NOT THE ACTUAL SALE PRICE. SINCE, IN THIS AY, AO HAS ONLY MADE ADDITION U/S 69, WE CAN ONLY ADJUDICATE ON THIS ASPECT. SINCE THE ASSESSEE HAS ACCEPTED THE PURCHASE PRICE AND AO HAS MADE THE ADDITION U/S 69, WE DIRECT THE AO TO ALLOW THE I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 8 ASSESSEE TO DECLARE THE VALUE OF CLOSING STO CK BASED ON THE PURCHASE PRICE AS BELOW: AREA RATE/SQ.YD. AMOUNT (RS.) PURCHASE 14883 288 42,84,667 SALES 1084 288 3,12,192 NORMAL LOSS APPORTIONMENT (3352 X1084/14883) 244 288 70,272 CLOSING STOCK 10448 373.50 39,02,203 SINCE THE COST OF PURCHASE IS TREATED AS INVESTMENT IN LAND, THE ASSESSEE IS ALLOWED TO CARRY FORWARD THE UNSOLD VALUE OF LAND AS CLOSING STOCK AS DETERMINED ABOVE. THE ASSESSEE CANNOT TREAT THE DIFFERENCE BETWEEN PURCHASE PRICE AND SALES PRICE AS LOSS AND IS ALSO NOT ELIGIBLE TO CARRY FORWARD AS BUSINESS LOSS U/S 71. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE PARTLY ALLOWED. AY 2010 - 11 11. IN THIS AY, THE ASSESSEE HAS RAISED BASICALLY TWO GROUNDS, I.E. GROUND NO. 2, WHEREIN, ASSESSEE OBJECTS THAT AO HAS MADE ADDITION U/S 69 AND NOT ALLOWED ASSESSEE TO DECLARE PROFIT @ 8% ON PURCHASE COST. IN GROUND NO. 3, THE ASSESSEE OBJECTS THAT HE WAS NOT ALLOWED TO CARRY FORWARD THE BUSINESS LOSS. WITH REGARD TO CARRY FORWARD OF BUSINESS LOSS U/S 71, WE HAVE ALREADY DISCUSSED THIS IN EARLIER YEAR AND ADJUDICATED THAT IT CANNOT BE CARRIED FORWARD. 11.1 COMING TO DISALLOWANCE U/S 69, AND DETERMINING THE BUSINESS PROFIT, WE HAVE VERIFIED THE INFORMATION SUBMITTED BEFORE US. THERE IS NO DISPUTE THAT ASSESSEE HAS INVESTED RS. 54.05 LAKHS DURING THIS YEAR. WE NOTICE THAT ASSESSEE HAS SOLD LANDS DURING THIS YEAR AND PREVIOUS YEAR. IT HAS SOURCES FROM THE SALE OF THE LAND. ON CAREFUL READING OF THE STATEMENT I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 9 SUBMITTED BY ASSESSEE, WE NOTICE THAT ASSESSEE HAS DECLARED PURCHASE COST OF RS. 42.84 LAKHS AND REGISTERED THE DOCUMENT AT RS. 10.67 LAKHS. THIS IS NOTHING BUT 4 TIMES OF THE VALUE DECLARED IN THE REGISTERED DOCUMENT. THEREFORE, THE ASSESSEE DECLARED RS. 100/ - PER SQ.YARD AS THE VALUE OF SALES IN THE REGISTERED SALE DEED. WHEN WE MULTIPLY THE SALE VALUE WITH THE CONVERSION VALUE OF 4, THE SAME CONVERSION ADOPTED TO UNDERVALUE THE LAND PURCHASED, THE SALE VALUE PER SQ. YARD WILL BE RS. 400/ - . THEREFORE, ASSESSEE HAS SOLD 1084 SQ. YARDS IN PREVIOUS YEA R AND THIS YEAR 9696 S Q . YARDS. THE TOTAL AREA SOLD IS 10780 AND THE SALE VALUE WILL BE RS. 43,12,000/ - . HENCE, AO CAN DISALLOW U/ S 69 TO THE EXTENT DETAILED BELOW: INVESTMENT IN THIS YEAR RS. 54.03 LAKHS FUN D S AVAILABLE FROM SALE OF LAND RS . 43.12 LAKHS RS. 10.91 LAKHS ============ WITH REGARD TO PROFIT EARNED BY ASSESSEE DURING THIS YEAR, ASSESSEE HAS SOLD LAND 9696 SQ. YARDS THIS YEAR, THE PROFIT EARNED BY THE ASSESSEE IS AS BELOW: SALES 9696 SQ. YEARDS @ RS. 400/ - RS. 38,78,400 COST OF LAND (REFER EARLIER PARA) @ RS. 373.50 RS. 36,21,450 RS. 2,56,944/ - =========== THEREFORE, GROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. AY 2011 - 12 12. ASSESSEE HAS RAISED SIMILAR GROUNDS IN THIS AY AS RAISED IN AY 2010 - 11. WE, THEREFORE, DIRECT THE AO TO DETERMINE THE PROFIT AS DISCUSSED ABOVE AND CAN DETERMINE CONVERSION VALUE BASED ON THE VALUE AGREED BY THE ASSESSEE ON PURCHASE OF PROPERTY AND RESPECTIVE REGISTERED VALUE IN THIS YEAR, ASSESSEE HAS PURCHASED ADDITIONAL LANDS. HENCE, AO I.T.A. NO S . 178 TO 180 /HYD/1 7 KEKKIRENI NAGAIAH, SURYAPET 10 SHOULD CALCULATE THE VALUE OF CLOSING STOCK AS PER ABOVE GUIDELINES AND SALES VALUE SHOULD B E ARRIVED AFTER CONSIDERING THE REGISTERED VALUE IN THE SALE DEED MULTIPLIED BY THE CONVERSION VALUE. PROFIT CAN BE DETERMINED BY FOLLOWING THE METHOD AS PER AY 2010 - 11. WITH REGARD TO ADDITION U/S 6 9 , AO CAN DETERMINE THE ADDITIONAL INVESTMENT FOR THIS YE AR AND THE FUNDS AVAILABLE IN THE BUSINESS SHOULD BE ARRIVED BASED ON THE REGISTERED VALUE IN THE SALE DEED AND MULTIPLIED BY CONVERSION VALUE. IF THERE IS ANY DIFFERENCE, THE ADDITION CAN BE MADE ONLY TO THAT EXTENT. 13. THEREFORE, GROUNDS RAISED BY THE ASSESSEE IN AY 2009 - 10 AND 2010 - 11 ARE PARTLY ALLOWED AND FOR AY 2011 - 12, THE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, APPEALS IN AY 2009 - 10 AND 2010 - 11 ARE PARTLY ALLOWED AND APPEAL IN AY 2011 - 12 IS ALLOWED FOR STATISTICAL PURPO SES. PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY , 201 9. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 31 ST JANUARY , 201 9 KV COPY FORWARDED TO: 1. KEKK IRENI NAGAIAH, S/O SAIDULU, H.NO. 1 - 1 - 109/A, TALLAGADDA, SURYAPET 508 213. 2 . ITO, WARD 1, SURYAPET 3 . CIT (A) - 3 , HYDERABAD 4. PR. CIT 3 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE