TaxTMI 
TaxTMI 
2018 (9) TMI 471
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....as duly recorded by the AO. Notice u/s 153C of the Act dated 21/10/2016 was issued and served on the assessee. In response to the notice, the assessee filed its return of income for AY 2013-14 on 18/11/2016 admitting total income of Rs. 19,44,350/- comprising of only business income. Accordingly, notice u/s 143(2) was issued and duly served on the assessee. 2.1 In this appeal, AO quantified the undisclosed income in the AYs 2012-13, 2013-14 and 2014-15 to the extent of Rs. 18,75,85,000/-, as such, there is no dispute on the above turnover quantified by the AO. However, AO gave credit to the extent of sale value disclosed as per the agreement while registering Villas to the extent of Rs. 5,77,27,500/-. For this AY i.e. 2013-14, the turnover quantified by the AO Rs. 8,88,10,000/- and AO allowed the sale value as per the agreement to the extent of Rs. 2,07,63,500/- 2.2 Assessee appealed against the above quantification of undisclosed turnover by the AO overlooking the turnover disclosed in the return of income, which has two parts, viz. a) sales and b) contract receipts for the constructions of Villas to the extent of Rs. 3,76,56,378/-. Further, AO treated the whole undisclosed sale....
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....ppressed receipts? 3. Whether on the facts and circumstances of the case, and in law, the ld. CIT(A) erred in not appreciating that all the expenses and costs related to the undisclosed receipts are already factored-in in the regular books of account? 4. Whether on the facts and circumstances of the case, and in law, the ld. CIT(A) was correct in deleting the addition made on account of unexplained investment in land ignoring that the assessee failed to explain the sources of investment in land which was a part of work in progress on which villas were constructed for which suppression of the income was quantified by the AD on the basis of seized material? 5. Whether on the facts and circumstances of the case, and in law, the ld. CIT(A) was correct in holding that the sources are self-evident when the land is reflected in balance sheet without appreciating the fact that the land in balance sheet is different from the land in question ? 5. Whether on the facts and circumstances of the case, and in law, the Id. CIT(A) was correct in holding that the sources are self-evident when the land is reflected in balance sheet without appreciating the fact that the land in question has ....
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....cord and it does not have any expenditure since assessee has already claimed the expenditure in the return of income and he relied on the orders of AO. He submitted that the whole suppressed turnover should be brought to tax. 7. Considered the rival submissions and perused the material on record. We notice that during search operation a diary was found and as per such diary, assessee has recorded the turnover to the extent of Rs. 8.88 crores whereas assesse has declared in its return of income sales at Rs. 1.46 crores and contract receipts at Rs. 2.31 crores. AO has adopted the value declared in the agreement of sale for registration purpose and not accepted the turnover declared by the assessee in the return of income. Assessee has filed return of income declaring total turnover of sale and contract receipts to the extent of Rs. 3.77 crores and paid the due tax. Therefore, the turnover already declared by the assessee as per the return of income should be taken as declared turnover. Therefore, we are in agreement with the submissions of the ld. AR that the suppressed turnover should be the difference between the turnover found in the document seized and the turnover declared in t....
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....arned on an unaccounted / suppress sales and not on the entire sales itself. Similar view was also taken in the case of ACIT, Cir1 Vs. M/s. Archana Trading Co in ITA No. 351 & 352/Coch/2011, dt. 28-02-2013 and also ACIT Vs. Pahal Food in ITSSA No. 42/Hyd/2005, dt. 30-09-2009, ITAT, Hyderabad. 6.1. Respectfully following the principles laid down by various High Courts and Co-ordinate Bench decisions, we are of the opinion that the entire turnover cannot be brought to tax as such and there can be reasonable profit estimation on the above amount. Generally income is estimated at 12.5% in the case of big contracts and since assessee has already offered @ 10% profit on the accounted turnover, we are of the opinion that income can be determined on the balance of the turnover at 12.5% of the turnover. AO is directed to do so. Accordingly, assessee's ground are partly allowed." 7.2 In the above case, we notice that assessee has already declared profit @10% on the accounted turnover, whereas, in the given case, assessee has declared 5.12%. In our considered view, the income has to be realistic and appropriate to the kind of business of assessee. As noted, assessee has declared only 5....