TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 217
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....well as in facts in restricting the addition of Rs.24,19,085/- to Rs.2,88,082/- made by the Assessing Officer on account of inadmissible expenses. 4. The order of Ld CIT(A) is perverse in law and on facts. 5. The appellant craves leave to add, amend an all of the grounds of appeal before or during the course of hearing of the appeal. I.T.A. No.2039/Del/2012:- 1. The order of the Ld CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Ld CIT(A) has erred in law as well as in facts in deleting the addition of Rs.24,19,085/- made by the Assessing Officer on account of estimating the profit under percentage completing method. 3. On the facts and in the circumstances of the case, the ld CIT(A) has erred in law as well as in facts in deleting the addition of Rs.2,34,594/- made by the Assessing Officer as income from other sources. 4. The order of Ld CIT(A) is perverse in law and on facts. 5. The appellant craves leave to add, amend an all of the grounds of appeal before or during the course of hearing of the appeal. C.O. No.237/Del/2012:-  ....
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....sp; b) The Assessing Officer has rejected the books of accounts u/s 145(3) without any valid reasons. c) The Assessing Officer has applied method of accounting not relevant to the assessee's business while assessee has adopted and opted standard method of accounting approved b Accounting Standard of ICAI. d) The Assessing Officer has failed to appreciate that assessee is not engaged in the business of construction of building or structures but engaged in the business of development of land/selling of plots of land. e) The Assessing Officer has also failed to appreciate that sale of plot of land is made by registered documents by handing over the plot and no ownership vest in the property before final payment is made while in construction activities building is made by making part payments on construction basis. Both these appeals were heard together and for the sake of convenience a common order is being passed. 2. The brief facts of the case are that the assessee is engaged in the business of real estate development. A search & seizure o....
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....4,594/- as other income as per P&L Account. Both the assessment orders were challenged before Ld CIT(A) And Ld CIT(A) on the basis of various submissions filed by the assessee partly deleted the additions made by the Assessing Officer in respect of assessment year 2007-08 and completely deleted the addition in respect of assessment year 2008-09 by holding as under:- Assessment year: 2007-08: "I have carefully considered the submission, perused the order of assessment and evidence placed on record. The dispute as raised by the appellant, pertains to treating the interest income of Rs.24,19,085/-as income of other sources and disallowance of the expenditure against that income by the Assessing Officer. In view of the above analysis of the assessment order of the Assessing Officer vis-à-vis the comments and arguments of the AR of the appellant, I have reached to the conclusion that Assessing Officer has picked and chose the item of income in complete disregard of the facts that the main business of the appellant company was the real estate development and interest earned was an incidental activity to the main business to utilize prudently the surplus....
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....hrust of the Assessing Officer while making the addition is that the appellant is deferring the payment of taxes. However, this allegation of the Assessing Officer is devoid of merits and cannot be accepted because the appellant is consistently following a method of accounting which is recognized in real estate development business. It cannot be said that the Project Completion Method could result in deferment of payment of taxes. It has been held by the Hon'ble High Court, Delhi in above case that AS-7 issued by ICAI also recognizes the position that in case of construction contracts the appellant can follow either of the two methods. This project Completion Method has been accepted by the Assessing Officer in earlier years, hence arguments of the AR of the appellant has a strong acceptance. Thus estimation of profit amounting to Rs.5,13,48,000/- in place of total taxable income declared by the appellant of Rs.15,83,923/- including profit on project completion method is not accepted. Therefore, addition made by the Assessing Officer is hereby deleted and the return of income of Rs.15,83,923/- filed by the appellant is accepted. This ground of appeal is allowed. Simil....
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.... in the P&L Account. In view of the above, it was argued that Ld CIT(A) has rightly deleted the addition. With respect to second year, the Ld AR heavily relied upon the order of ld CIT(A) as he submitted that Ld CIT(A) has relied upon the case of Manish Build Well (P) Ltd. (supra) as decided by the Hon'ble Delhi High Court. 7. We have heard the rival submissions of both the parties and have gone through the material available on record. With respect to first year i.e. assessment year 2007-08 we find that Ld CIT(A) has wrongly arrived at the conclusion that interest was earned from incidental activity of real estate developer. We observe that the income was earned out of surplus funds advanced by the assessee to its sister concern which was not a business activity of the assessee and neither the Ld AR could prove that advances were given for business purposes. Therefore, we do not agree with the findings of the Ld CIT(A) to this extent. However, we are in agreement with the arguments of Ld AR that even if the income is treated under the head income from other sources even then the total income of the assessee would be computed after setting off losses under other sources including ....