TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 31
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.... in law in making the addition of 4,11,21,669/- (i.e. 10% of (Rs.95,09,17,900- Rs 53,97,01,209) (Turnover as per Service Tax Turnover as per books) on estimation basis without pin pointing any transactions not recorded in the books of account and rejecting the books of account maintained in the normal course of the business and had been audited both by the Statutory as well as Tax Auditors. Rs. 24818609 3. The Ld. CTT (A) & Ld. Assessing Officer erred on the facts and in law in making an adhoc addition on his whims, fancies, assumptions, presumptions without assigning any reasons, without pointing out any error, flaw, mistake or anomaly either in the books of accounts maintained in the normal course of business or documents/ evidences/ information furnished during the course of assessment. No basis or reason for making 10% addition as a business income has been given in the calculation by the learned Assessing Officer. 4. The Ld. CIT (A) & Ld. Assessing Officer erred on the facts and in law in saying that appellant has not submitted the relevant copy of documentary evidence to substantiate the claim in the reconciliation statement whereas it is not correct; all the documentary ....
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....ainst which the assessee is in appeal before the Tribunal. 5. Ld. AR of the assessee submitted that ground no 2&3 are squarely covered from the assessee own case in ITA NO. 725/Del/2024 for the A.Y. 2014-15 in this case the coordinate Bench held as under : 1. At the time of hearing, ld. AR of the assessee submitted that the assessee company was incorporated on September 9, 1988, under the name of M/s Vidhi Constructions (P) Ltd. and later its name was changed to M/s Aarone Developers Pvt. Ltd. w.e.f. 22.09.2007 and the assessee has regularly been assessed to Income Tax since incorporation. He submitted that the assessment for the assessment year 2011-12, 2012-13, 2013-14, 2014-15, 2017-18 and 2018-19 was completed U/s 143(3) of the Act. He submitted that the company is engaged in the business of Construction & development of Properties by way of outright purchase or through Collaboration and during the year, the company was engaged in the construction and development of its projects at Delhi and Indore. He further submitted that the assessee filed its return of income, for the year under consideration, u/s 139 (1) of the Act on 30.11.2014 and the same was assessed u/s 143(3) of ....
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....of the GSTI has computed the turnover from the same set of books of accounts and the same set of transactions which were appearing in those books of accounts based on which the annual accounts have been drawn. He submitted that the information reported by the office of the DG GSTI, Delhi was very much there and no new facts have been found or detected by the office of the DG GSTI except adoption of computation mechanism as per Service Tax Rules. 7.3 He further submitted that the AO completed the assessment u/s 147 of the Act for the year under consideration on 30.03.2022, by making a trading addition of Rs. 2,90,08,5261- [i.e. 10% of (Rs.36,62,41,517- 7,61,56,255)] on estimation basis by partly accepting the reconciliation statement submitted, without rejecting the books of accounts of the assessee as follows: Returned Income Rs.7,74,81,350/- Add : Estimated Profit @ 10% on Rs. 29,00,85,262/- Rs.2,90,08,526/- Assessed income Rs.10,64,89,876/- 7.4 Further, It is submitted that the Assessee submitted a detailed reconciliation of the difference between the turnover as per Audited statements and turnover as per Service Tax, which is reproduced by the AO on Page 4 to 6 of A....
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.... the stage of completion of the project reaches a reasonable level of development. A reasonable level of development is achieved if expenditure incurred on construction and development costs is not less than 25% of the total estimated construction and development costs. c) At least 25% of the saleable project area is secured by contracts or agreements with buyers. d) At least 10 % of the total revenue as per the agreements of sale or any other legally enforceable documents are realised at the reporting date in respect of each of the contracts. Thus, he submitted that under percentage of completion method, no revenue is recognized (irrespective of the fact that advances from customers have been received) unless at least 25% of the construction has been completed, at least 25% of the area has been sold and at least 10% of the sale value has been received from the customer. Whereas, in case of builders/ developers (treated as Service Provider), As per Service Tax Act, turnover is calculated as per rule 3 of. 'The Point of Taxation Rules 2011 which states that the point of taxation shall be,- a) The time when the invoice for the service provided or agreed to be provided is ....
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.... include advances received, only due to specific provision contained in the Service Tax Act. But, this position cannot be generalized and override the Generally Accepted Accounting Principles or Income Tax Law. 7.5 Ld. AR further submitted that the assessee prepared and submitted the reconciliation statement, before the learned assessing officer, to arrive at the actual turnover as per the Generally Accepted Accounting Principles, from the turnover computed by the office of the Director General, GSTI, Delhi, during assessment proceedings and this reconciliation, cannot be ignored out rightly without assigning any reason. Therefore, he submitted that the Assessing Officer erred in treating the advances received in excess of revenue recognised of Rs. 28,70,66,225/- and expenditure where service tax is paid under reverse charge mechanism of Rs. 1,23,44,953/- totalling to Rs. 29,00,85,262/-(28, 70,66,225+ 12,344,953) as variation in turnover of the assessee company because of the following: * The amounts of Rs. 28,70,66,225/- are the fresh advances against sale of property/plotslf1ats in excess of the revenue recognized as per POCM. The assessee company has already recognised reven....
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.... between the turnover declared for the purpose of service tax and turnover declared in its return of income along with the supporting documents through ITP System. The AO grossly observed that the assessee has not submitted any supporting evidences relating to reconciliation of gross turnover. From the records submitted before us, the assessee has submitted all the relevant information through ITB Portal and for the sake of clarity, the same is reproduced below :- S.No. Particulars Page No. of Paper Book Filed before Ld. AO vide Acknowledgement Number Filed before Ld. CIT (A) vide Acknowledgement Number 1 Reconciliation of Turnover 14 397960481210322 Dated 21.03.2022 544532241071223 Dated 07.12.2023 2 Detail of fresh advances 15-21 397960481210322 Dated 21.03.2022 544532241071223 Dated 07.12.2023 3 Copy of Agreements 22-67 267341951280222 Dated 28.03.2022 397960481210322 Dated 21.03.2022 544532241071223 Dated 07.12.2023 4 Summary of Revenue and PCOM Charts 68-81 267341951280222 Dated 28.03.2022 544532241071223 Dated 07.12.2023 5 Point of taxation rule 3 and notification 82-88 544532241071223 Dated 07.12.2023 6 Details of ....