AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 1653
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.... (in short the "Act") as well as restricting the addition to Rs. 2,67,767/- from Rs. 58,32,000/- estimated by the Assessing Officer at 25% of net profits on relevant project. Heard both the parties. Case file perused. 2. It emerges from the case records that the revenue seeks to revive Assessing Officer's action in both rejecting assessee's books as well as estimating its net profits to Rs. 58,32,000/- @ 25% of the total sales. Both the learned representatives take us through learned CIT(A)'s findings elaborately discussing the relevant facts, Assessing Officer's reasons as well as assessee's submissions as under:- "3.4. I have considered the facts of the case and submissions made by the appellant. In this case the AO has mad....
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....n the basis of the jantri rate is found correct but not genuine as the appellant was very silent regarding discrepancies found specially in respect of Flat No.501, 502 and 503 which is sold with terrace right with same built up area i.e. 113 sqr. Yards. It is pertinent to mention that for Unit No.502 the appellant had charged Rs. 55 lakhs but the same sale price has not been charged on other terrace right units like 501 and 503. In view of the discrepancies found the books of accounts of the appellant were rejected by invoking the provision s of Section 145(3) of the Act and thereafter the net profit of Rs. 58,32,000/- on this project was estimated @25% on sale of Rs. 2,33,28,000/-. 3.5. During the course of present appellate proce....
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....ther it was submitted that the claim of expenses with regard to the RCC work from labour contractors namely M/s Jay Ambe Construction were at Rs. 9,38,090/- and not the labour expenses of Rs. 13,92,532/- as observed by the A.O. 3.8. Further with regard to the charges of RCC work for the 6th and 7th floor @ 65% by Shri Pravin P. Chotalia it was submitted that the payments to him was made in addition to the base rate. The base rate was Rs. 52,775/- and for carrying out the terrace level work additional 65% of the base rate was charged by him i.e. on 6th and 7th floor. The 65% rate was as per the terms of extra 10% charges for every floor. So it was pleaded that in fact there was no additional RCC work bill but it was only considered ....
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....proceeds of some flats which was less than the sale proceeds of the other flats, it has been pleaded by the appellant that the sale rate of each and every unit could not be same and it depends upon various factors. It varies from one unit to another unit. However, it was submitted that the sale price of all the units were more than the jantri rate. Thus, it cannot be said that any of the flats have been shown below the jantri rate. Further pleaded that the AO had issued the summons u/s.131 of the Act to all the buyers and during the course of assessment proceedings they have been examined. But no discrepancies with regard to any suppression of the sale proceeds in respect of sale of any unit has been found. This means that the amount record....
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.... expenditures have been made. 3.12. Further with regard to the observations of the AO that the sale price of each of the flats must be same is without any base. It is worth here to mention that sale rate of the flat depends upon various factors like its location, booking time, mode of payment, terms of payment and other various factors.. The sale price can never be similar to all the units. Even in the examination proceedings u/s.131 of the Act of the buyers no instance of any understatement of the sale price has been found by the A.O. Thus, on presumption basis no inference can be drawn about the understatement of the sale proceeds of few flats. 3.13. In view of the aforesaid discussion, the AO's stand of rejecting th....
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.... @ 25% on the total sales coming to Rs. 2,33,28,000/-. He particularly places a strong reliance on Assessing Officer's reasons as discussed in CIT(A)'s order in paragraph 3.4 that the assessee had failed on multiple issues making the Assessing Officer to reject its books of accounts under section 145(3) of the Act. Mr. Divatia on the other hand highlights the fact that the assessee has followed percentage completion method. He takes us through the relevant corresponding incomes right from the assessment year 2008-09 onwards hereinabove. His case therefore is that the assessee's books of accounts have been correctly maintained throughout. He then quotes Hon'ble jurisdictional High Court's judgment in CIT vs. Vikram Plastic & Ors, 239 ITR 161....