2025 (11) TMI 1497

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.... of its order that the profits were estimated without first rejecting the books of accounts. 2. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in adopting the project revenue as Rs. 16,16,99,630/- disregarding the factual matrix of the case. 3. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in adopting the project cost as Rs. 10,72,87,747/- disregarding the factual matrix of the case. 4. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the addition by computing the project profit at Rs. 5,31,20,768/-; disregarding the factual and legal matrix of the case. ITA No.3017/MUM/2024 1. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the Impugned assessment order passed by the Ld. Assessing Officer under section 143(3); even after observing in para 16 of its order that the profits were estimated without first rejecting the books of accounts. 2. In the facts and circumstanc....

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....ld commercial shops Rs. 2.02 Crores Balance area to be given to Omkar Shriram Kokate As per supplement agreement dated 10.11.2014 42, 556 sqft Commercial area to-be given to Kokate 3322 sqft Details of estimated cost + estimated sales of Omkar Heights Rupees (In Crs) Sales Realisation as on date 09/02/2019 20.24 Estimated sale proceeds of Unsold Residential Flats 0.70 Estimated Sale proceeds of Unsold commercial shops 2.02 Total Sales realization 22.96 Work in progresses as on Date 09.02.2019 22.26 Lift estimate Cost 0.75 open land tax payable 2.25 Concrete Water Tank 0.25 Occupancy & Other Cost 1.00 Total Cost 26.51 Estimated Loss (-) 3.55 3.2. According to the assessee, it had made an application for construction of total 21 floors building with six wings, admeasuring total 6,66,000 sq ft. In the first phase, the approving authority sanctioned construction of building for seven floors. The total constructed area as on 31.03.2017 was Rs. 1,20,321 sq. ft. Thus, the percentage of work completed as on 31.03.2017 was only 18.07%. Contrary to this fact, ld. Assessing Officer took into consideratio....

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....he correct factual aspects not considered by ld. CIT(A) is tabulated for both the Assessment Years as under: Computation of Project Profit or Loss based on % completion method AY 2017-18 AY 2018-19 (a) Total saleable area of the project [Sq ft.] 1,04,320 1,04,320 (b)Area to be given to Anant S Kakote [Sq ft.] 46,525 46,525 (c) Total Saleable area. with the appellant [Sq ft.] [(a) - :(b)] 57,795 57,795 (d) Total area sold upto the end of relevant years [Sq.ft.] 44,105 52,490       (e) Actual Direct Cost of the project 21,76,77,106 21,76,77,106 (f) Estimated Direct project cost to be incurred 4,25,00,000 4,25,00,000 (g) Total Direct Cost of the Project [(e)+(f) J. 26,01,77,106 26,01,77,106 (h) Actual Direct Cost incurred upto the end of relevant years towards the entire project 17,95,12,676 19,88,17,634 (i) Percentage of work completed based on direct cost incurred upto relevant years to the total cost of project [(h)/(g)*100] 69.00 % 76.42 %       (j) Total Sale Consideration 17,85,16,169 20,55,27,640 (k) Revenue recognition for the re....

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....18 and Rs. 16,12,718/- for Assessment Year 2018-19 but failed to consider the same for the period prior to these Assessment Years, that is from the inception of the project. Ld. Counsel thus, claimed that both direct and indirect costs are required to be taken into account for computing the gross profit/loss for the entire project which should, not only be the two years under consideration but also which is incurred up to the relevant years. Thus, by considering the above contentions, the re-working was furnished which gave rise to loss scenario for both the Assessment Years, out of which for Assessment Year 2018-19, ld. CIT(A) had also re-computed a loss scenario. 4.4. Ld. Counsel also asserted that ld. Assessing Officer has applied percentage completion method without rejecting the books of accounts and re-computed the profits for making the addition. What ld. Assessing Officer has considered, is the position that the project is completed and accordingly, made his working based on actual sales of the flats in the said project. However, from the re-computation made by the ld. CIT(A) by factoring in the actual cost incurred for the period beyond the two Assessment Years which wa....