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"1. The order of ld. CIT (A) is not correct in law and facts.
2. On the facts and circumstances of the case, the ld. CIT (A) has erred in deleting the addition of Rs.65.46 crores made by the Assessing Officer on account of wrong budgeted estimated used in POCM.
3. On that facts and circumstances of the case, the ld. CIT (A) has erred in law in deleting the addition of Rs.105,90,50,000/- made by the AO on account of Sham transaction.
4. On the facts and circumstances of the case, the ld. CIT (A) has erred in law in deleted the addition of Rs.2,33,47,177/- made by the AO under the head income from other sources as against claimed as netted off against project cost."
However, an actual FAR of 2,30,689.33 square meters was built as per the plan submitted by Emaar MGF for obtaining Completion certificate from DDA. The Developer, therefore, constructed an area of 25,549.33 square meters in excess of the approved plans. This was almost 12.5% more than the approved FAR.
• Excess Cost of Project The assessee company adopted percentage of completion method (POCM) of accounting for recognition of revenue from real estate project being executed i.e. CWGV project. As per the POCM method of accounting, the revenue of project is recognized based upon the percentage of completion achieved at the end of the financial year.

26. It was argued that the accounts have been maintained as per the accounting standards and no defect in relation to Section 145(2) or Section 145(3) has been found out by the revenue authorities.

27. It is further submitted that the Budgetary expenditure on the project is Rs. 1597.43 crores as on 31st March 2009 and actual expenditure upto this date is Rs. 917.03 crores. This will yield a ratio for POCM at 57.40% (Rs. 917.03 / 1597.43 X 100 = 57.40%). In this budgetary estimate of expenditure construction cost has been taken at Rs. 1027.06 crores. Thus, other budgetary cost of the project comes out to be Rs. 570.37 crores (Rs. 1597.43 - Rs. 1027.06). However, by adopting cost of construction at Rs. 2875 per square feet, total cost of construction has been worked out by AO at Rs. 752.34 crores. The same amount has been taken as budgetary estimate by him and included in the other cost to work out total budgetary cost at Rs. 1322.71 crores (Rs. 752.34 + Rs. 570.37), this figure has been used by AO as denominator to determine ratio of POCM at 69.32% (Rs. 917.03 / 1322.71 X 100 = 69.32%). It has lead to a high ratio of allocable revenue which is incorrect as per accounting principles because one has only to adopt budgetary estimate of total expenditure and not part of the budgetary expenditure.

accepted. This reduction in estimated expenditure consequently resulted in working of POCM at 69.32% instead of 57.40%. This resulted in the absolute figure of Rs.87.97 crores rise in the estimated income of the assessee which is not without any tangible basis and hence cannot be accepted. The AO's contention that the negligible profit declared by the assessee warrants the alteration in POCM is also cannot be accepted. We also rely on the judgment of CIT Vs Vikram Plastics 239 ITR 161 (Guj.) wherein it has been held that, where no discrepancies or defects pointed out in the books of account and further that they were regularly maintained and also on the finding that there was no material brought on record to establish that purchases or expenses were inflated or sales suppressed. The profits declared by the assessee cannot be altered. Similarly, the Hon'ble Delhi Court in the case of Winner Constructions Pvt. Ltd. in ITA 796/2011 held that low gross profit or net profit may be a ground are reason to conduct detailed and thorough investigation and verification but on that stand alone the profits cannot be rejected. System of accounting adopted by the assessee cannot be rejected on the grounds that gross profit disclosed by the assessee was low. It is also a fact and as submitted by the revenue that the assessee had constructed 230,689.33 sq. mt. against the approved built up area of 205,140 sq. mt. In that case, it is a natural corollary that the cost incurred for construction of the plots would be more than the estimated cost. The fact that the DDA purchased the flats for Rs.11,000 per sq. ft. and sold in auction @ Rs.24,000 per sq. ft. has been ignored by the Assessing Officer and took a fixed stance that the cost of construction cannot be more than RSs2875 per sq. ft. The factor such as increase in the input cost, exit of the main contractor, change in the specification are not considered by the Assessing Officer. In the instant case, there has been no evidence of inflation of purchases, the Assessing Officer has not rejected the books of account, the accounts have 2002, 5827 & 6114/Del/2014 ITA Nos. 913, 914 & 1253/Del/2017 Emaar MGF Construction Pvt. Ltd.