TaxTMI 
TaxTMI 
2018 (8) TMI 121
X X X X Extracts X X X X
X X X X Extracts X X X X
....td., on 24-12- 2014 and consequent to that, notice u/s. 153A of the Act have been issued. Assessee has filed returns of income in response to notices mostly, admitting the same incomes which were admitted in the returns originally. 3. In the course of assessment proceedings, AO has made an addition of Rs. 11,53,810/- for violation of Section 40(a)(ia) of the Act. In addition, AO noticed that assessee has suppressed its receipts over a period of time and quantified the suppressed receipts at Rs. 10,60,25,463 and distributed over the assessment years as under: A.Y. Suppressed Income (Rs) 2010-11 8,40,000 2011-12 32,44,000 2012-13 95,19,850 2013-14 1,98,99,770 2014-15 3,53,54,958 2015-16 3,71,66,885 Total: 10,60,25,463 3.1. After considering the suppressed receipts in the respective assessment years as above, AO treated the entire amount as income of assessee in respective assessment years. 4. Before the Ld.CIT(A), assessee has made submissions that the disallowance u/s. 40(a)(ia) of the Act does not arise and that the suppressed turnover is not based on any valid material and further, there were mistakes in the computation of s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is available, (ii) where evidence of date of booking is available, and (iii) where neither is available, registered sale value is adopted. The methodology of quantification adopted by the AO is therefore entirely logical and correct, and is backed by solid facts and evidences found in the seized material during the course of the search. The methodology of the quantification is discussed in great detail by the AO in para 4 of the assessment order (which is reproduced in para 6.2 of this order). I therefore find no merits in the contentions of the appellant on this account, and ground nos.4 & 5 related to this issue are DISMISSED". 5.1. Before us also assessee has not furnished any evidence to counter the working of AO. Since there is some basis for working out the so called suppressed turnover and assessee's main contentions are on the reconciliation of the said working, we are of the opinion that estimation of turnover based on the so called registers/entries in pencil cannot be faulted. Thus, the grounds on this issue (Ground Nos. 1 to 6) are accordingly rejected. Determination of suppressed turnover: 6. As seen from the assessment order, AO has worked out the gross rece....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to tax as sales. Hence the actual amounts admitted in the books of accounts post search in respect of these plots on the basis of the receipts should have been reduced from the figure of Rs. 1,23,51,16,787 as against Rs. 2,16,49,500 allowed as reduction by the Assessing Officer. Thus the total reduction should be Rs. 23,74,76,163 (Rs.26,67,61,465 - Rs. 2,92,85,302) as against Rs. 20,47,07,200 by Assessing Officer. 3.6 Further, even according to the Assessing Officer, these plots were registered after the date of search i.e, in the Asst.Year's.2015-16 or 2016-17. Without conceding the fact that the there is no suppressed turnover at all, even if some suppression in turnover is alleged in respect of these plots which were registered in subsequent orders no addition can be made in the Asst. Years under consideration. Any addition in this regard can be made in relevant post asst. years only and not prior to the date of registration. 3.7.1. It is humbly submitted that, without conceding that there is no suppression at all, if the above rectifications were carried out, the alleged suppressed turnover would workout to Rs. 4,62,77,422 as per the details filed before A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0/- is allowed to be reduced for such plots while computing suppression of receipts. Finally, the total value of relief to the assessee on this issue works out to Rs. 20,47,07,200/- as per Annexure "H". The AO has thus clearly observed that in respect of some plots accounted for in future sales, the appellant has shown only Registered value of the said plots as sale value in subsequent years, and therefore, only Registered value of the said plots amounting to Rs. 2,16,49,500/- is being reduced while computing suppression of receipts. I find no infirmity in the order of the AO on this issue. Ground No.6 related to this issue is therefore DISMISSED". 6.3. It was the contention of the Ld. Counsel that assessee has correctly accounted the amounts post search in books of account which should have been excluded while arriving at the gross receipts. In the alternate, since the sales were accounted for at a later period, any difference in sale amount, if any can only be taxed in the post search assessments but not in the pre-search assessment as many plots have not been sold on the date of search and so the question of suppressed turnover does not arise. 6.4. Ld.DR, however,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of profit, as seen from the order of Ld.CIT(A), Ld.CIT(A) relied on the judgment of the Hon'ble Madhya Pradesh and Gujarat High Courts in determining the profit percentage at 40%. There is no basis for arriving at that percentage. It is an admitted proposition that there cannot be any fixed profit percentage in any business. It depends on case to case on the facts. As seen from the turnovers declared by assessee in the books of account, these are the turnovers in respective assessment years. A.Y. Turnover (Rs) 2010-11 10,63,08,947 2011-12 13,03,97,300 2012-13 10,29,96,427 2013-14 13,29,76,651 2014-15 14,69,66,161 2015-16 11,42,81,441 Total: 73,39,26,927 7.1. Compared to the above turnover, the suppressed turnover determined by the AO was roughly at about 14.5% of the total turnover declared. Assessee has admittedly declared only 4% of the profit on the declared turnovers which was not disputed by AO. Consequently, there cannot be 40% profit on the so called suppressed turnover. We are of the opinion that a reasonable profit has to be estimated considering the facts of the case. There are various judgments relied on by the part....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lso ACIT Vs. Pahal Food [IT (SS)A No. 42/Hyd/2005, dt. 30-09-2009] by ITAT, Hyderabad. 9.1. Respectfully following the decisions, we are of the opinion that the entire turnover cannot be brought to tax as such and there can only be an estimation of reasonable profit on the so called suppressed turnover. Therefore, there is no merit in Revenue grounds, accordingly, they are dismissed. 10. One more issue which was raised in AY. 2013-14 is with reference to disallowance of an amount of Rs. 22,000/- u/s. 40(a)(ia) of the Act made by the AO, but deleted by the Ld.CIT(A) for the following reasons: "5.3 I have carefully considered the submissions made by the appellant as well as the observations of the AO in the impugned order. The assessment order, as reproduced in para 5.1 above, on this issue, does not contain any reference to the outcome of the search or any inference derived from the Search that resulted in the impugned addition. Perusal of the assessment record also does not suggest anything to the contrary. The assessee has placed reliance on a plethora of judicial pronouncements, including the decision of the jurisdictional bench of the ITAT in the case of DCIT vs. ....