TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 343
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....was carried out in the case of the assessee and its group concern on 06-09-2017. Accordingly, the proceeding under section 153A of the Act was initiated. The AO during the assessment proceeding examined the financial records and transactions related to the construction and sale of flats in the scheme known as MAM Classic Towers complex, built between the years 2012 and 2015 in Gulbarga. The project comprised 45 flats spread across five floors, with a total plinth area of 45,000 square feet. Each floor contained 9 flats, primarily consisting of 2 BHK units. 4. Based on documentary evidence, including receipts from buyers, found at the office of Dr. Md. Abdul Mujeeb in Luqman College of Pharmacy, the AO noticed that the assessee has shown receipts of Rs. 3,08,37,455/- for the sale of 17 flats, which indicated an average sale price of Rs. 1,830 per square foot. However, the AO within these transactions, observed significant variations in pricing which are detailed as under: * The highest sale rate was recorded for Flat No. SF-7 at Rs. 2,755 per square foot, amounting to Rs. 24 lakhs for 871 square feet. * The lowest sale rate was noted for a first-floor flat (Flat....
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....tion with respect to the allegation of receipt of on money in the project. 10. The assessee further submitted that the project MAM Classic was launched in the F.Y. 2011-12 at the outskirt of the city, which is not surrounded by any big bazaar, market or complex etc. From the launch of the project, the assessee has received advance booking from the prospective buyers which are duly recorded in the books and disclosed in the return of income. The rate of the flats which were booked at the beginning of the project was as per the prevailing market price at that time without any premium. Therefore, the consideration worked out by the AO for making addition of Rs. 5,61,76,200/- is without any basis. The assessee in support of its contention furnished copy of statement showing opening stock, flat/shop constructed/developed, sale of flat/shop and closing stock for the period 1-04-2011 to 31-03-2019, along with copy of sales ledger, copy of trading and profit loss account for said period. 10.1 The learned CIT(A) after considering the facts in totality deleted the addition made by the AO on merit by observing as under: 5.0 With respect to the appellant's claim that no warrant ....
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....athered any evidence to justify the addition made. The only reference was to the sale deeds and the price at which some apartments were sold to determine the average selling rate for residential and commercial spaces. The AO had not brought any material record to show what was the investigation conducted, who were enquired, what was the outcome of the enquiry, whether such evidence gathered was confronted to the appellant to elicit his response at the stage of investigation or at the stage of assessment, etc. The AO should have justified with the evidences why the highest sale value per sq. ft. is to be considered as the average rate for all the apartments and commercial units sold by the appellant. Merely stating that the appellant would have received on-money from other buyers without any reference to incriminating material and estimating the additional income of the appellant is unjustified and illogical. 7.1 In light of the above, the addition of Rs. 5,61,76,200/- on account of estimated unaccounted income is deleted, and the ground of appeal in this regard is allowed. 11. Being aggrieved by the order of the learned CIT(A), the revenue is in appeal before us. 12.....
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.... of Rs. 3,83,23,800/- only in the books of accounts. The AO, therefore, concluded that the difference of Rs. 5,61,76,200/- represented unaccounted receipts, which were added to the income of the assessee in the assessment order made under Section 144 (Best Judgment Assessment), since the assessee had allegedly failed to cooperate by not submitting books of accounts, bills, and vouchers in response to the notices issued under Sections 142(1) and 144 of the Act. 13.2 The assessee, being aggrieved by this addition, filed an appeal before ld. CIT(A), arguing that no incriminating material had been found during the search proceedings to justify the addition. The assessee further contended that its project was launched in F.Y. 2011-12 in an area located on the outskirts of Gulbarga, without proximity to commercial centres or premium locations. Given the market conditions prevailing at the time of the launch, flats were booked at competitive rates, and all transactions were properly recorded in the books and disclosed in its returns of income. The assessee also furnished detailed documentary evidence, including sales ledgers, trading and profit and loss accounts, and a statement of sto....