Appeals partially allowed, remitted for fresh adjudication. Additional evidence considered, fair hearing ensured.

The Tribunal partly allowed the appeals, remitting the issues back to the AO for fresh adjudication. The AO was directed to consider additional evidences and provide a fair opportunity for the assessee to be heard before determining taxability and adjustments of disclosed income.

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Issues Involved:
1. Admission of additional evidences and grounds.
2. Disallowance of expenses under Section 40(a)(ia) of the Income Tax Act.
3. Declaration of income from the sale of TDR/FSI.
4. Adjustments against disclosed income.
5. Year of taxability of the disclosed income.

Issue-wise Detailed Analysis:

1. Admission of Additional Evidences and Grounds:
The assessee filed additional grounds and evidences for AY 2009-10, arguing that these would go to the root of the matter and were necessary for a fair adjudication. The Tribunal admitted the additional evidences under Rule 29 of the ITAT Rules, 1963, as they were deemed to help in adjudicating the issue. The additional grounds were also admitted as they were legal in nature and crucial to the case.

2. Disallowance of Expenses under Section 40(a)(ia):
The AO disallowed expenses amounting to Rs. 94.69 lakhs and Rs. 1.89 crores for AYs 2007-08 and 2008-09, respectively, on the grounds that the project was completed in AY 2006-07 and no further expenses were necessary. The FAA, however, found that the project was completed in AY 2008-09 and that the expenses were genuine and should be adjusted against the profit declared. The FAA also noted that the AO did not bring any evidence to prove the expenses were bogus and that the disallowance should be made under Section 69, not Section 37.

3. Declaration of Income from the Sale of TDR/FSI:
The assessee argued that the income declared during the survey for the sale of TDR/FSI should be considered for AY 2009-10. The FAA and AO had not provided a clear finding on the taxability of this income. The Tribunal directed the AO to reconsider the issue and determine the correct year of taxability after providing a reasonable opportunity for the assessee to be heard.

4. Adjustments Against Disclosed Income:
The FAA held that the disclosed income of Rs. 2 crores was in addition to the disallowance of Rs. 53 lakhs under Section 40(a)(ia). The Tribunal found that the disclosure was made to cover errors and omissions in the project and directed the AO to reconsider this issue along with the main issue of disclosure, ensuring a fair hearing for the assessee.

5. Year of Taxability of the Disclosed Income:
The Tribunal noted that the AO and FAA had not considered the statements made during the survey and subsequent submissions together. It directed the AO to re-evaluate the year of taxability for the disclosed income from the sale of TDR/FSI, ensuring that the assessee is given a reasonable opportunity to present their case.

Conclusion:
The Tribunal partly allowed the appeals filed by both the AO and the assessee, remitting the issues back to the AO for fresh adjudication. The AO was directed to consider the additional evidences and provide a fair opportunity for the assessee to be heard before making a final determination on the taxability and adjustments of the disclosed income. The order was pronounced in the open court on 26th July 2017.

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