TaxTMI 
TaxTMI 
2014 (10) TMI 290
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....onse to notice u/s. 153A. 3. For the A.Y. 2008-09, the assessee did not file return of income within the due date. In response to the notice issued u/s. 153A it filed return of income declaring income of Rs. 2,77,030. For A.Y. 2009-10, the assessee filed its return of income on 27.9.2009 declaring a loss of Rs. 37,19,395. 4. The common ground for all the three assessment years raised before the CIT(A) was that the AO erred in determining income from business by estimating the net profit at 10% of the work-in-progress and further erred in arriving at the net profit of Rs. 14,47,075 for A.Y. 2007- 08, Rs. 5,97,259 for A.Y. 2008-09 and Rs. 19,39,013 for A.Y. 2009-10. 5. The second common ground was that the Assessing Officer erred in not allowing any administrative and financial charges and depreciation while arriving at such net profit. 6. The next ground was that the AO erred in adding income from other sources at Rs. 8,33,673 for 2007-08, Rs. 25,39,366 for A.Y. 2008-09 and Rs. 10,65,025 for A.Y. 2009-10. 7. As regards the ground relating to estimation of net profit from the assessment order it is seen that the appellant is a company engaged in the business of real es....
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....he year as income, entitling the assessee for deduction of administrative expenditure. 10. The Assessing Officer noticed up to Assessment Year 2007-08, the appellant had been constantly showing either profit on advances received or on completion of project. For the Assessment Year 2007-08, even though there were advances, it had not offered any notional profit. He found that it was not clear from records whether the said amounts had been taken into sales or not. However, the same was not in tune with the method adopted by the appellant over the years. On the other hand, in the subsequent years, the appellant had suffered losses due to debiting administrative expenditure to the Profit and Loss A/c, whereas it was capitalizing those in the earlier years. Therefore, the Assessing Officer concluded that the change in method was apparently with a view to off set the income declared u/s. 132(4) of the Act and the assessee had cleverly concealed the declaration. He also noticed that the returns up to the Assessment Years 2007-08 were filed prior to search while that for the Assessment Year 2008-09 was filed on 15-10-2009, after a delay of 1 year. Accordingly, the purpose for the change....
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....s 2008-09 and 2009-10, however, only 10% of work in progress was brought to tax in respect of the ongoing projects as estimated income. 14. Before the CIT(A), as regards the ground relating to estimation of profits @ 10% of work in progress, the learned counsel for the assessee submitted that there was no dispute with regard to the expenditure incurred. However, he contended that such addition should not have been made. It was averred that the appellant had two projects on hand viz., Surabhi Shradha and Eden Bagh. Both the projects were completed and sold during the year the appellant admitted all income of Rs. 9,90,585 by considering the sale consideration of Rs. 6,78,08,928 and thereafter reducing there from the work in progress as at the beginning of the previous year and the expenditure incurred during the year. He submitted that the profit so admitted was accepted by the Assessing Officer. The above said projects were in progress from the Financial Year 2004-05 and initially, the appellant was offering income on advances received which was accepted by the Assessing Officer. Therefore, a different method should not have been adopted during the year, particularly in view of t....
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....e Assessing Officer and in view of the consistent accounting policy followed by the assessee, 10% thereof has been brought to tax during the year. Finding no infirmity in the action of the Assessing Officer, therefore, the additions made are upheld and the ground raised in this regard is decided against the appellant in all the years." 18. The learned DR supported the orders of the Assessing Officer and the CIT(A). 19. The learned AR submitted that the assessee has been adopting a consistent method of arriving at the profit on receipt of advances. The AO had accepted such method for A.Ys. 2005-06, 2006-07 and even for A.Y. 2007-08. He did not resort to any estimation. In such circumstances, it was submitted that deviation from earlier method adopted is not justified. 20. We have heard both the parties. We find from the assessment order that the assessee has been estimating profit with reference to the advances received. The profit is worked out on the advances but while showing the same in Profit and Loss A/c. it was wrongly mentioned as notional profit on work-in-progress. However, the Assessing Officer correctly mentioned in the assessment order that the profit was estim....
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....p; "08.0 I have gone through the facts of the case and the submissions of the appellant. It is seen that the income of Rs. 6,11,260 was dividend on chits and therefore, being dividend income, the same was rightly taken as income from other sources. As regards the income offered of Rs. 15 lakhs, it is clear that in the light of the decision of Hon'ble Punjab and Haryana High Court in the case of Kim Pharma (P) Ltd vs. Commissioner of Income-tax (ITA No. 106/2011) (0&M), such surrendered 'income has to be income from other sources only. As regards miscellaneous recoveries, the appellant has not been able to explain that those were recoveries from the regular business of the appellant itself. Accordingly, no infirmity can be said to exist in the treatment of the above amounts as income from other sources. So far as the income from "rent" of Rs. 3,10,000, profit on sale of office premises of Rs. 36,913 and interest earned of Rs. 58,364 are concerned, the appellant had itself admitted those as income from other sources on the basis of its private knowledge regarding the nature of such income. Even in the course of these proceedings, nothing has been submitted to establish ....