TaxTMI 
TaxTMI 
2020 (2) TMI 884
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....dismissed as not pressed. 3. Ground No. 4 to 6 relates to rejection of books of accounts under section 145(3) of the Act, confirming the addition of Rs. 4,72,02,368 on account of entire construction receipts as alleged unrecorded receipts, without appreciating in the right and true perspective, that the expenditure directly incurred for the construction of the residential units, duly recorded in the books of accounts and the accounts are duly supported by authentic evidences i.e. bills, vouchers, Government Approved Valuer reports, work progress filed with HUDCO, and CIT (A) had erred in overlooking and in summarily rejecting the detailed statement of facts hence, addition of entire gross receipts made under presumption , assumption and allegation of non-incurrence of any construction expenditure for the construction of residential units and ignoring various evidence placed in Paper Book furnished before the AO, hence, version of the AO is not justified. 4. Succinct facts are that the assessee is engaged in the business of construction of residential units. The assessee has filed return of income on 08.10.2009 declaring total income of Rs. 8,82,070. Book profit was shown at Rs. 2....
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....sed Profit & Loss Account and balance sheet. The assessee has also increased its expenses from Rs. 6,65,08,089 to Rs. 25,71,84,057 in the revised Profit & Loss Account. The additional expenses have been claimed on the basis of cash vouchers which were not produce before the survey team on the date of survey. The assessee has stated that the auditors did not consider the same correctly in the audited accounts. For some units sale consideration was shown as booking advance. The appellant also stated that even the expenditure has not been correctly accounted for by the auditors. In view of these facts, the Ld. CIT(A) observed that the receipts and expenses have been increased several times in comparison to those reflected in the audited books of accounts, itself is sufficient reason for rejection of the books of accounts of the appellant. Therefore, the rejection of books of accounts by made the AO, was upheld. The Ld. CIT(A) further observed that as per the impounded materials the gross receipts are shown at Rs. 10,39,86,000, while in the return of income the corresponding receipts in respect of 38 units have been disclosed at Rs. 5,67,82,632. Therefore, the difference of Rs. 4,72,0....
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....sessee as the assessee has incurred corresponding expenditure to earn such on-money receipts. Therefore, only profit embedded therein in the line of business which has been disclosed by the assessee should be considered for arriving at true and net income. The learned counsel for the assessee placing reliance on the decisions of Hon'ble Gujarat High Court in the case of CIT v. President Industries [2002] 258 ITR 654 (Gujarat) /124 Taxman 654 (Gujarat) submitted that entire sales could not be added as income of the assessee, but addition could be made only to the extent of estimated profits embedded in sales for which net profit disclosed in the books of accounts was to be adopted. It was further submitted that even otherwise also, the entire on money cannot be taxed in the year of receipt as the same is required to be tax in the year in which actual sales takes place. The learned counsel for the assessee also placed reliance in the case of Jay Builders v. ACIT, 33 taxmann.com 62 and also decision of Hon'ble ITAT, Ahmedabad in the case of Kishor Telwala [199] 64 TTJ 543. It was contended that the addition could be made only in respect of those units where evidences relating to rece....
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....he entire on-money receipts. 8. Per contra, learned CIT(D.R.) relied on the order of CIT (A) and submitted that the expenditure claimed by way of cash vouchers were not produced during survey, hence, same is not found acceptable by the AO lower authorities. The expenditure incurred by the assessee has been already accounted for in audited books of accounts hence, the CIT (A) was justified in confirming addition of entire on-money receipts. 9. We have heard the rival submissions and perused the relevant material on record. We find that the impounded material revealed that the assessee has earned gross receipts amounting Rs. 10,39,86,000 whereas in the return of income, the same were shown at Rs. 5,67, 83, 632. Hence, the AO made addition of difference in gross found and shown by the assessee at Rs. 4,72,02,368 received by the assessee on account on-money on sale of flats during the year under consideration. We find that the assessee had claimed the expenditure by way of filing cash vouchers during the course of assessment proceedings, however, the AO has disbelieved the same without giving cogent reason and investigation and verification. The learned counsel for the assessee conte....
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....ne M that flats were sold at premium - In response to a notice declared undisclosed income of Rs. 30 lakhs - Considering the fact that assessee was entitled supervision charges only and taking into consideration depreciation , salary , etc. . Tribunal determined the profit rate 1.31 percent - same was not disputed by Revenue - Tribunal found that undisclosed income of Rs. 30 lakhs declared by the assessee was not less than net profit calculated at 1.31 percent - investment in land and in construction was not shown to have been made by the assessee - Thus, , Tribunal rendered its decision on appreciation of material placed on record - No referable question of law arises. The learned counsel for the assessee submitted that the decision of Hon'ble Gujarat High Court the net profit rate disclosed at 4.55% during the assessment year under consideration by the assessee in books of accounts and considering the facts that the project undertaken by the assessee comes under deduction of section 80IB(10) hence, there was no occasion to suppress the profit rate as disclosed by the assessee. 12. The Ahmedabad tribunal in above case in the of DCIT v. Abhishek Corporation v. DCIT [1999] 63 TTJ(A....