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[2009] 311 ITR 16 (MAD.) HIGH COURT OF MADRAS Commissioner of Income-tax v. S.M.S. Gardens D. MURUGESAN AND P.P.S. JANARTHANA RAJA, JJ. TAX CASE APPEAL NO. 333 OF 2004 AUGUST 13, 2007 Section 37(1) of the Income-tax, 1961 - Business Expenditure - Allowability of Where assessee was owner of a commercial complex and all amenities and benefits in such complex were commonly enjoyed by all purchasers, reduction of cost of lifts, EPABX, etc., for calculating unit cost of construction was not proper [Assessment year 1992-93] [In favour of assessee] CIT v. S.M.S. Gardens [2009] 311 ITR 16 (Mad.) The assessee-firm's business was that of commercial and residential flats, selling and/or letting out the same. It was the owner of a multi-storeyed complex. The assessee claimed the cost of sale properties at Rs. 3,41,16,011. The Assessing Officer had worked out the unit cost at Rs. 360 per sq. ft. and adopted the cost of the area at Rs. 2,89,45,080. The difference of Rs. 51,70,931 (Rs. 3,41,16,011 minus Rs. 2,89,45,080) had been added back and assessed by the Assessing Officer. The Tribunal deleted the addition holding that the Assessing Officer was not justified in excluding the cost of lifts, excalators, EPABX, etc., since those assets were not purchased by the assessee but were owned by a sister concern. Held that the authorities below had given a finding that all the other benefits and amenities were commonly enjoyed by all the purchasers of flats/shops in the complex and that, therefore, reducing such amounts for calculating the unit cost would not be proper or justified. The rates at which the shops or offices or flats were sold in the complex were inclusive of the above amenities. It was a pure question of fact. The findings given by the authorities below were based on valid materials and evidence. Thus, there was no error or legal infirmity in the order of the Tribunal so as to warrant interference. N. Muralikumaran for the Appellant. S. Ramesh Kumar for the Respondent. JUDGMENT P.P.S. Janarthana Raja, J. - This appeal is filed under section 260A of the Income-tax Act, 1961, by the Revenue, against the order of the Income-tax Appellate Tribunal, Chennai Bench "B",…

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