Tribunal rules for Assessee, directs AO to delete additions. Partially allows appeals for recalculations.

The Tribunal ruled in favor of the Assessee, directing the Assessing Officer to delete additions made for the assessment years 2004-05, 2005-06, and 2007-08 due to the absence of incriminating material. For the assessment years 2008-09, 2009-10, and 2010-11, the Tribunal partially allowed the appeals, instructing the AO to recalculate additions based on revised rates for different floors. The final order was issued on 30th November 2018.

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Issues Involved:
1. Rejection of books of accounts under Section 145 of the Income Tax Act, 1961.
2. Allegation of receiving on-money based on loose papers found during search proceedings.
3. Estimation of sales price for shops and offices for calculating unaccounted receipts.

Detailed Analysis:

Issue 1: Rejection of Books of Accounts under Section 145
The Assessee contested the rejection of its books of accounts by the Assessing Officer (AO) under Section 145 of the Income Tax Act, 1961. The CIT(A) upheld this rejection, which was challenged by the Assessee. The Tribunal noted that the books of accounts were rejected based on loose papers found during the search and seizure operation on 15.09.2010. However, for the assessment years 2004-05, 2005-06, and 2007-08, the Tribunal found that no incriminating material was discovered during the search. Therefore, the Tribunal concluded that the AO was not justified in rejecting the books of accounts for these years and directed the AO to delete the additions made.

Issue 2: Allegation of Receiving On-Money
The AO alleged that the Assessee received on-money for the sale of shops and offices based on loose papers found during the search. The CIT(A) upheld this contention. The Tribunal examined the facts and noted that for the years 2004-05, 2005-06, and 2007-08, no incriminating material was found during the search. Consequently, the Tribunal held that the AO could not make any additions under Section 153A in the absence of incriminating material. For the years 2008-09, 2009-10, and 2010-11, where the assessments were not completed and were abated due to the search, the Tribunal accepted the principle that the AO could make additions based on the incriminating material found.

Issue 3: Estimation of Sales Price
The AO estimated the sales price of shops and offices to calculate unaccounted receipts, which was upheld by the CIT(A) with some modifications. The Tribunal noted the Assessee's argument that the rates adopted by the CIT(A) were excessive and unreasonable. The Tribunal considered the weighted average rates submitted by the Assessee and the general principle that the price per square meter decreases as one moves from the ground floor to higher floors. Consequently, the Tribunal directed the AO to recalculate the additions based on a reasonable and balanced approach, adopting specific rates for each floor as follows:
- Ground and First Floor: Rs. 30,042 per sq. meter (confirmed).
- Second Floor: Rs. 24,000 per sq. meter (average of the rates submitted).
- Fourth and Fifth Floors: Rs. 16,500 per sq. meter (average of the rates submitted).

Conclusion:
The Tribunal allowed the appeals for the assessment years 2004-05, 2005-06, and 2007-08, directing the AO to delete the additions made in the absence of incriminating material. For the assessment years 2008-09, 2009-10, and 2010-11, the Tribunal partly allowed the appeals, directing the AO to recalculate the additions based on the revised rates for different floors. The final order was pronounced on 30th November 2018.

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