2023 (5) TMI 55 - AT - Income Tax

Tax Appeal Outcome: Revenue's Appeal Dismissed, Assessee's Partial Success on Excess Advance and Net Profit Estimation

The Revenue's appeal was dismissed, and the appeals filed by the assessee were partly allowed for the assessment years 2012-13 and 2013-14. The Tribunal ... Accrual of income - amount received as advances and retained by the assessee was not refunded to the companies - HELD THAT:- CIT(A) has stated that the profits retained from SRM and Good Earth by the assessee has already been considered while computing the profits from the four projects in the above given assessment years. Accordingly, the ld. CIT(A) has observed that there is no need to retain the above addition separately. Thus, we find no infirmity in the order passed by the ld. CIT(A) on this issue. Accordingly, the ground raised by the Revenue is dismissed. Confirmation of net profit @ 30% being sale of lands at Chavadi - We find that the above estimation of net profit is on higher side. Thus, in the absence of any comparables, we are of the considered opinion that the estimation of net profit @ 15% on sale of the plots would be reasonable. Accordingly, we set aside the order of the ld. CIT(A) on this issue and direct the AO to estimate the net profit @15% towards sale of plots. Thus, the ground raised by the assessee is partly allowed. Issues involved:The judgment involves issues related to the assessment years 2012-13 and 2013-14, including the treatment of advances received and retained by the assessee, estimation of net profit on sales of land, and the exparte order passed by the ld. CIT(A) for the assessment year 2013-14.Assessment Year 2012-13:The Revenue appealed against the deletion of an addition of Rs.2,27,20,347 made by the Assessing Officer, arguing that the excess advance retained by the assessee should be recognized as income. The ld. CIT(A) observed that the addition had already been considered while computing profits from the projects in previous years. The Tribunal upheld the ld. CIT(A)'s decision, stating that the profits retained had been factored into previous assessments.Assessment Year 2012-13 - Net Profit Estimation:The assessee challenged the confirmation of a net profit of Rs.1,35,97,822 at 30% on sales of lands at Chavadi. The Assessing Officer estimated the profit at 30% of gross receipts, which the ld. CIT(A) confirmed. The Tribunal found the estimation to be on the higher side and directed the Assessing Officer to estimate the net profit at 15% on the sale of plots, partly allowing the assessee's appeal.Assessment Year 2013-14 - Exparte Order:The assessee contested an exparte order confirming an addition of Rs.67,66,367 at 30% net profit on sales. The ld. CIT(A) dismissed the appeal due to non-representation by the assessee. The Tribunal noted that a similar issue was addressed in the assessment year 2012-13, where the net profit was estimated at 15%. Accordingly, the Tribunal directed the Assessing Officer to estimate the net profit at 15% of gross receipts, partly allowing the assessee's appeal.In conclusion, the Revenue's appeal was dismissed, while the appeals filed by the assessee were partly allowed for the assessment years 2012-13 and 2013-14.