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" The AO has bifurcated the sums received by HUDA from plots as under:-

             a) Land Cost-            14.02%
             b) Development Cost-      44.61%
             c) Indirect charges-    29.79%
             d) Others-               11.30%

Out of indirect charge at 29.79%, commercial interest escalation charges, license fees, conversion charges, security fees and services charges totaling to 22.2% are not retained by the assessee at all and are parted by it either with the government or with the plot owner under directions of the court.

Further, it is reiterated that the cost sheet which was taken as the basis for adopting an assumptive NP rate is a projection of the cost expected to be incurred for developing a sector. This cost was based upon the historical data and the past figures and as per PWD estimates, which are based in scientific postulates and calculations.

The Indirect Charges include some amounts which are compulsorily payable by the assessee to other departments/persons and are not retained by the assessee at all. For the purpose of making these charges, the assessee is treated at par with private colonizers and are to be paid to various departments. Thus, even if the presumption of the AO that Indirect charges are to be taxed as income, expenditure incurred under the head commercial interest, escalation charges, License Fees, Conversion Charges, Security fee and service charges (totaling to 21.17%) is not retained by the assessee and is paid to various departments and only 6.13 %, which is administrative charges can only be considered (though incorrectly) for the purpose of calculation of profit in this manner.

Out of indirect charges taken as 29.79%, commercial interest, escalation charges, license fees, conversion charges, security fees and service charges totaling to 21.17 % are not retained by the assessee at all and are parted by it either with the government or with the plot owners under directions of the Court.

In respect of the year under question, the assessee has paid a sum of Rs.50 cores to the State Government of Haryana on account of license fee, conversion charges and infrastructure development charges.

vi. HUDA has worked out various administrative charges on estimate basis whereas actual expenditure is much less that again generates profit. Commercial properties, Malls, School sites etc are put to auction which are sold above reserve price. There is clear intention to earn profit.

4.2 The CIT(A) order for AY 2007-08 was adjudicated first & the rate was reduced from 30% to 20% on the following reasons: (a) There is a merit in assessee's submission that license fee, conversion charges, scrutiny fee and service charges [10.17%] cannot be taken to be income of the assessee as same are directly parted/given to the State Govt., (b) Similarly, the appellant is correct in stating that actual amount on account of indirect charges is 27.3% as against 29.79% computed by AO, accordingly giving relief, the percentage is taken as 20% as against 30% adopted by AO, and (c) The receipts on account of enhancement compensation granted by the courts does not have any element of income. Therefore he directed the AO to exclude enhancement compensation from the amount of receipts. The CIT(A) order for AY 2007-08 was followed by CIT(A) in all the years.