TaxTMI 
TaxTMI 
2025 (5) TMI 1790
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....the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year 2017-18. 2. Brief facts of the case the assessee is a Private Limited Company and owner of land at Asarva, Ahmedabad. The land was given for development to M/s. Jas Infra Space Private Limited as a Developer and constructed shops and offices on the said land under a development agreement. The constructed shops and offices were sold jointly, with Sale Deeds executed by the assessee and Developer as confirming party. The sale consideration was appropriated between the assessee and M/s. Jas Infra Space Pvt Ltd. i.e. Developer. The closing stock for the assessee was of land only. 2.1. For the Asst. Year 2017-18, assessee filed its Return of Income ....
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....law and facts by not deleting the addition of Rs. 2,88,49,653/- made by the learned Assessing officer, on account of low Gross Profit for the year under consideration and therefore, your Honor is requested to direct the ld.AO to delete the addition in full, while computing the total income. 4 That your appellant craves a leave to add, alter or amend any grounds at or before the time of hearing. 5. At the outset Ld Counsel Shri Prakash D Shah appearing for the assessee submitted that the assessee is NOT pressing Ground No.1 namely wrong issuance of notice u/s. 143(2) of the Act, recording the same Ground No.1 is dismissed. 6. Regarding merits of the case the Ld Counsel submitted a detailed Written Submission, summery of the same is that ....
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....31.03.2017 Total cost incurred till date including interest cost till 31.03.2017 1,53,98,72,205 Total units sold till 31.03.2017 886 Sales Price of units sold 160,56,68,400 Total sales price estimated 267,42,86,500 % of sales price of units sold 60.1 % of unit in stock 39.9 Total value of stock 614409009.8 (39.96*1539872205/100) Say, 614411278 6.4. Thus, the assessee had valued the closing stock which was inclusive of interest. The sales are made at a specific rate while the opening stock included interest capitalized so far. Therefore, the rate of profit had gone down from year after year. Opening stock ....
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....ales could not be achieved at a faster rate. This has caused interest cost to the company which has increased the cost of valuation of land. The assessee further submits that the books of accounts are accepted by Assessing Officer and no defect in the books of account is found out by the AO. No comparable case is given by AO while making estimation, therefore there is no justification of estimation of gross profit and addition thereof. 6.7. The Ld. Counsel further submitted that gross profit in the previous Asst Year 2016-17 was 4.49% which is accepted by the department while passing the scrutiny assessment order u/s 143(3) of the Act on 24.12.2018. Whereas for the present asst. year the AO has estimated gross profit of 9.94% which is even....
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.... model is unique - the assessee is a landowner and not a developer. Thus, expecting unit-wise inventory details is misplaced, as land does not undergo typical trading or manufacturing transformation. 8.1. We find neither specific or material defect in the books of account nor any instance of sales suppression or unrecorded transactions. Further there is no purchase of new land by the assessee. Thus the Assessing Officer is not correct in rejecting the books of accounts as maintained by the assessee. 9. Next issue is Estimation of Gross Profit. The Ld AO adopted an average GP rate of 9.94% based on earlier years' data. However for the Asst. Year 2016-17, the GP of 4.49% was accepted by the department in the scrutiny assessment u/s. 143(3) ....