2014 (1) TMI 1359

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....case are during the course of survey conducted in the business premises of the assessee on 19/02/2009, certain incriminating material was found and impounded. Subsequently, assessee filed a revised return offering additional income of Rs. 10 lakhs and admitting the net income at Rs. 4,50,870/-. During the course of scrutiny, on verification of impounded material, the Assessing Officer had noticed that the partners of the firm purchased four acres of agricultural land during the year and the assessee had shown the cost of this land at Rs. 40,00,000/- in the P&L A/c whereas the value of land as per the registered sale deed is Rs. 1,60,000/-. In the absence of any explanation from the assessee for variation in the value of the land, the Assess....

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....that the cost of acquisition of land is Rs.10,00,000/- per acre except relying on the books of account. Considering the facts and circumstances, the CIT(A) was of the opinion that the transaction affects only the work- in-progress. Therefore, he directed the AO to reduce the work-in- progress to be carried forward by an amount of Rs.38.40 lakhs. 5. Aggrieved, the Revenue is in appeal before us. 6. Before us, the learned DR submitted that though the assessee has recorded the cost of land in his Books of Account, no corroborative evidence was furnished in support of its claim either in .post-survey or assessment proceedings. It is submitted that a mere entry in the Books of Account or in any document is not a conclusive piece of evidenc....

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....re no sales in the year under consideration the difference, at best, has to be reduced from working progress and cannot be added to the income returned by the assessee, the learned DR submitted that the argument of assessee is not tenable since as per the assessment order it is clear that that the Assessing Officer has brought the difference in cost of the lands purchased to tax and the addition made was not on account of inflated purchase cost of the land which has the character of unexplained investment U/s.69 of IT Act. It is submitted that by inflating the rates the assessee suppressed the profits and arrived at a net loss of Rs.5,49,126/-. The learned DR submitted that a minor lapse on the part of the Assessing Officer in not mentionin....