TaxTMI 
TaxTMI 
2026 (3) TMI 783
X X X X Extracts X X X X
X X X X Extracts X X X X
....T/2024, for assessment Year 2017-18, have been taken into consideration for deciding the above appeals en masse. 3. Although, these appeals filed by the assessee and appeals filed by the revenue, contain multiple ground of appeals. However, at the time of hearing we have carefully perused all the grounds raised by the assessee and revenue. We find that most of the grounds raised by the assessee and revenue are either academic in nature or contentious in nature. However, to meet the end of justice, we confine ourselves to the core of the controversy and main grievances of the assessee and revenue as well. With this background, we summarize and concise the grounds raised by the assessee and revenue, as follows: "(i) "The ld. Commissioner of Income-tax(Appeals)-11, Ahmedabad erred on facts as also in law in dismissing ground of appeal related to validity of notice issued u/s 148 of the Income tax Act, 1961. That on facts as also in law, the proceedings-initiated u/s 147 of the Act is invalid and assessment finalized on such invalid initiation deserves to be quashed and may kindly be quashed." (This ground is raised by the assessee in ITA No. 809/RJT/2024 for AY 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Y 2020-21 and Ground no.4 in IT(ss) No.24/RJT/2024 for AY 2022-23. The Revenue's plea in these grounds are that addition made by the assessing officer should be sustained.) (iv) (a) The ld. CIT(A) erred on facts as also in law in retaining addition of Rs. 54,83,000/- out of total addition of Rs. 2,09,63,885/-, made on account of alleged negative cash balance in the Miracle Data. The addition made and retained is bad in law as also in facts therefore the same may kindly be deleted. (This is, assessee's ground No. 5 in ITA No. 811/RJT/2024 for AY 2014-15, Ground no. 6 in ITA No. 814/RJT/2024 for AY 2017-18, Ground no. 7 in ITA No. 815/RJT/2024 for AY 2018-19). (iv) (b) The ld. CIT(A) erred on facts as also in law in enhancing addition of Rs. 1,67,52,762/- on account of alleged negative cash balance in the Miracle Data. The addition made and retained is bad in law as also in facts therefore the same may kindly be deleted. (This is, assessee's ground No.5 in ITA No. 812/RJT/2024 for AY 2015-16, and Ground No.5 in ITA No. 813/RJT/2024 for AY 2016-17.) (v). On the facts and in the circumstances of the case and in law the Ld. CIT(A)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in law the Ld. CIT(A) has erred in directing to delete the profit arising on account of on-money received at 25% for project R K Industrial Park-4 estimated by the AO as protective addition not appreciating that the profit rate had applied on on-money received which was over and above the disclosed business receipt and ignoring the detailed reasoning given by the AO for adopting the GP rate. (This is, revenue's ground no. 3 in ITA No. 794/RJT/2024 for AY 2018-19 and Ground No.3 in ITA No.795/RJT/2024 for AY 2019-20.) (x) The ld. CIT(A)erred on facts as also in law in retaining addition of Rs. 56,99,160/- by estimating profit @ 12% of so called on money receipt in respect of sale of plots at Village Haripar Dist. Rajkot. The addition made and retained is bad in law as also on facts therefore the same may kindly be directed to be deleted. (This is assessee's ground No. 4 in ITA No. 815/RJT/2024 for AY 2018-19, Ground No.4 in ITA No. 817/RJT/2024 for AY 2020-21 and Ground no.3 in ITA No.818/RJT/2024 for AY 2021-22) (This is also revenue's ground No. 4 in ITA No. 794/RJT/2024 for AY 2018-19 and Ground No.4 in ITA No. 795/RJT/2024 for AY ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from the material on record, are as follows. The assessee is an Individual. The Income-tax Return for assessment year (AY) 2017-18, has been filed on 07-11-2017, declaring total income of Rs. 15,20,590/- after claiming deductions under chapter VI-A of the Act of Rs. 1,20,173/-. The gross total income consists of Salary of Rs. 10,50,000/-, Capital Gains of Rs. 5,82,794/-, and other incomes of Rs. 7,968/-. A Search, Seizure and Survey action was carried out by the office of DDIT (Inv.), Unit-1, Rajkot in the case of leading real estate builders of Rajkot and their key associates on 24.08.2021. Four different groups were covered in the operation including the RK Group of Rajkot. All the four groups are in the business of real estate and are mainly concentrated in and around Rajkot. A total of forty-three (43) premises were covered, out of which 32 premises were covered under section 132 of the Income Tax Act 1961 and the other 11 premises were covered u/s. 133A of the Income Tax Act 1961. The premises covered were a mix of residential and business premises of their related entities, their family members, key associates and employees. M/s RK Group is developing multiple projects in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ost of lands (3) Expenses incurred on various projects and other miscellaneous transactions made by RK Group members with various counter parties were maintained in accounting software known as MIRACLE. Details of sale of units maintained in various excel sheets were also found and seized from the premise of Shri Girish Vanjani. Multiple miracle files have been found from the digital data that has been imaged and seized during the search operation. Many miracle files found are duplicate copies of each other or either not fully updated. Some Miracle files are more updated than the other. From the plethora of Miracle files that have been found during the post search analysis, 3 files have been isolated which when studied together cover the financial transactions of the group from 01.08.2009 to 13.08.2021. The details of the three Miracle files are as under: Sr. No. Name of the file 1 DIVYARAJ & CO. (01.08. 2009 to 30.06.2016) 2 Divyaraj & Co (01.07.2005 to 31.03.2009) 3 RK World (01.04.2009 to ... ) 6. Apart from the above, various documents in the form of loose-papers, excel sheets etc, have also been recovered and seized during the search operation from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... * Unaccounted payments of Rs. 12,70,06,750/- towards purchase of land for the project. (FY 2017-18) * Unaccounted expenses of Rs. 2,38,54,012/- related to the project. * The seized papers indicated 50% beneficiary share of the assessee in R K Industrial Zone 11. (iii) Project - RK Industrial Zone 14 * Unaccounted receipts of Rs. 6,94,80,460/- on account of sale of units as well as repayments / return out of the unaccounted receipts of Rs. 96,02,820/-, on account of cancellation or excess receipt of on-money (FYs 2019-20 to 2021-22) * Unaccounted payments of Rs. 5,61,88,700/- towards purchase of land for the project. * Unaccounted expenses of Rs. 36,68,640/- related to the project. * The seized papers indicated 75% beneficiary share of the assessee in RK Industrial Zone 14 (iv) Project-R K Industrial Zone 15 * Unaccounted receipts on account of sale of units of R K Industrial Zone 15 of Rs. 11,50,71,840/- as well as repayments / return out of the unaccounted receipts of Rs. 56,66,960/- on account of cancellation or excess receipt of on-money (FYs 2019-20 to 2021-22) * Unaccounted payments o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Act and with prior approval of the specified authority as per section 151 of the Act. In response to the notice issued under section 148, the assessee has filed an Income tax return on 11-01-2023. Subsequently, a notice u/s 143(2) of the Income-tax Act has been issued and served on 21-02-2023 on the e-filing portal of the Assessee. Subsequently, notices u/s 142(1) have been issued from time to time seeking primary as well as further details from the assessee for carrying out the assessment. In view of natural justice, the objections raised by the assessee against initiation of proceedings u/s 148 of the Act have been disposed of and the images of original seized material pertaining to the assessee have been supplied and discussed in the notices issued u/s 142(1) of the Act from time to time by the assessing officer. 9. Thereafter, the Assessing Officer, after considering the reply of the assessee, discussed the issues that have direct or indirect implication for assessment of income for the year under consideration, one by one, in the assessment order, as follows: (i) Project - R K Industrial Zone 9- On-money receipts and repayments RK Industrial Zone-9 is an indu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ots numbered 8 to 11 have been sold for Rs. 1,17,12,740/-, in coded form, it is shown as 117127.40. However Rs. 21,17,720/- only have been received through bank and reported on the regular books of the assessee. In response to the summon dated 26/09/2021 issued to Shri Sarvanand Sonwani, he submitted the regular books of accounts on 08/11/2021 and also provided the bank book of RNSB account no.45964. On perusal of the bank book, it was noticed that the bank entries as recorded in the seized Miracle ledger appear in the bank book. Snapshot of relevant part from the bank book is pasted in the assessment order Page No. 13. Moreover, the two bank entries of Rs. 75,060/-, as mentioned in the Miracle ledger has been deposited in the account no. 472100050300641 of Tamilnad Mercantile Bank Ltd of the Industrial Zone 9 Owners Association. The details of the account were called for from the bank and have been examined by the assessing officer. Snap shot of the same is pasted in the assessment order Page No.13. Therefore, assessing officer noticed that all the bank entries as mentioned in the Miracle ledger have been tallied. Thus establishing the correctness of the ledger. The Assessing Offi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eipts and repayments (AO order page no. 26 to 37). (v) Project-RK industrial zone-11-unaccounted payments for purchase of land. (AO order page no. 38 to 44). (vi) Project-RK industrial zone-11- Unaccounted payments for other project related work. (AO order page no. 44 to 53) (vii) Project-RK industrial zone-14- Unaccounted payments for other project related work. (AO order page no. 55 to 58) (viii)Project-RK industrial zone-15- On-money receipts and repayments. (AO order page no. 58 to 71) (ix) Project-RK industrial zone-15- Unaccounted payments for other project related work. (AO order page no. 71 to 73) (x) Project-RK industrial park (phase-4)-On-money payments for acquisition of land for the project. (AO order page no. 73 to 78) (xi) Project-RK industrial park (phase-4)- On money receipts and repayments. (AO order page no. 78 to 84) (xii) Project-RK industrial park (phase-4)- other cash expenses incurred for the project. (AO order page no. 84 to 85) (xiii) The plots at Haripar village ( Pariraj Park)-own money receipts. (AO order page no. 86 to 93) (xiv) Unaccounted cash payments for acquis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s in the project are marketed /sold by R.K Group. In such activity, R.K. group has derived brokerage / commission income only. 13. The assessee explained the modus operandi of conducting huge residential & commercial projects, that first they identify the suitable land for the project and negotiation on the value of land and time-period of payment is made by R K Group with the sellers. Generally, R.K. Group get instalments for making payment for the land up to two years and therefore, payment for the land is mostly funded from the booking advances / instalments received from the investors and customers. Simultaneously, construction activities of the project are commenced with the help of contractor with whom the legal contract is executed for carry out construction activities with or without material. After completing the construction activities, sale deeds of the constructed units are made in favour of the investors & customers and at that point of time, sales are accounted for in the books of account of relevant person / concern. However, at times, the customers / investors cancel his booking and, in that case, R.K.group refunds entire advances received and, in that place, new....
X X X X Extracts X X X X
X X X X Extracts X X X X
....drawn litigation and to put quietus to the issue, the assessee had voluntarily declared the ad-hoc additional income of Rs. 10.00 crores on behalf of entire group. The said additional income was declared in order to cover up any error, omission, defect or discrepancy in the documents / data seized during the course of search subject to the condition that no penalty or any other harsh measure shall be initiated. Further, it was reiterated that digital data (Miracle Files) recovered from the premises of Shri Girish Vanjani do not contain correct and complete information and as such, reliance placed on such disputed data for making high-pitched addition in assessee's hands is strongly objected. Further, assessee reiterated the averments made in his duly sworn affidavit as well as affidavit of Shri Girish Vanjani, wherein, it has clearly been stated that the data relied upon by the Department is not correct and sacrosanct and hence, addition of unaccounted income cannot be made solely on the basis of such independent data. Furthermore, right from the post-search investigation and in assessment proceeding, all the other members and partners of R K Group have denied any link or relat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e expenditure is found outside the books, under such circumstances, additions made on the basis of loose papers by making certain presumptions, which were found to be untenable or contrary to other evidence on record, cannot be held to be justified and deserved to be deleted. (iv) The co-ordinate Nagpur bench of the Tribunal in the case of ACIT vs. Buldana Urban Co-operative Credit Society Ltd. (2013) 153 TTJ (Nag) 728 in somewhat similar circumstances has observed that presumption given under section 292C is not conclusive but is rebuttable. 15. The assessee, since, in the beginning has denied that the loose papers found were not belonging to him and the same were not in the handwriting of any of the employees; there being no corroborative evidence available on record found during the course of search which may prove wrong the contention of the assessee that the said paper does not belong to him and the assessee offers a plausible explanation regarding the recovery of such a document in his premises, then under the circumstances the additions in the absence of any corroborative evidence cannot be held to be justified. The assessee relied on the decision of Lucknow Benc....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... This proves that the entries made in the seized data is in haphazard manner which serves no purpose to the assessee or any other member/partner of the Group. It is also submitted that assessee or other member/partner of the Group has never accessed such data and there was no use of such incorrect/incomplete /erroneous data for assessee. It was also submitted that various entries in disputed Miracle Files represents the investment in properties, which in fact have not purchased by any of the family members or group concerns. In certain cases, the description of property as inferred from the ledger name had been acquired much before that is, before 2010 but the entries in the seized data is appearing in the assessment years under consideration. Therefore, it is submitted that the seized data is not correct and it does not show true picture of the group affairs. Furthermore, in the SCN itself, it is admitted by the assessing officer that there are various entries in ledger accounts which cannot be identified with reference to any party or project. In this regard, it was submitted that assessee has not carried out any such transactions and hence, income proposed to be added in respec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....valuation standards. Therefore, any doubt regarding valuation of the land or constructed units can also be resolved from the Valuation Cell or by making inquiries with the sub-registrar office. Further, in case of provisions of RERA applicable to any projects, details regarding cost of project, sales, booking amount etc. has been submitted before the authority from time to time, which has also been accepted. Therefore, there is no room for any unaccounted transactions be it receipts or payments in the project. 18. It was also submitted that various family members have been entrusted with various work and duties and all the persons are working independently under the common banner of "R K Group". During the post-search, it was also realized that some of the family members had started to provide add-on services to customers at his own, which includes customization in flat/office, extra civil and interior work, taking connection of electricity, water, gas etc., purchase of stamp papers for registration of Satakhat / Sale Deed, payment of registration fees and legal fees to advocate on behalf of customer etc. These all activities were made by the different family members at their ow....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Similarly, the project "R K Industrial Zone-14" and "R K Industrial Park (Phase-4)" was developed by Smt. Priya Vinod Devra, wherein, assessee has just facilitated her to sale the units under the banner of "R K Group". Therefore, assessee has not earned any income from this project and hence, addition proposed in assessee's hands was strongly objected. 21. It was also submitted that the impugned data is totally misleading and not reliable, even in the various assessment proceeding in Central Charge as is appearing in the decided case laws, the assessing officer has determined the assessable income by estimating the net profit at 6%, and 8%, on unaccounted receipts as the case may be in the case of builders /developers. Even, the scheme of offering an income on estimate basis at the rate of 8% / 6% is also available in the Income-tax Act i.e., Section 44AD of the Act. Therefore, proposing high pitched addition without following the settled judicial interpretations and findings is not the right spirit of conducting assessment proceeding and the same is against the principle of natural justice. Reliance was placed on the following decisions: 1. Hon'ble ITAT, Ahmed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....55.% for the assessment year under consideration and 4.59% for A.Y. 2010-11. Further, the Hon'ble High Court in the case of CIT V. Abhishek Corporation [1998 (8) TMI 110 - ITAT AHMEDABAD-C] has upheld the net profit at 1.31% as declared by the assessee in that case. 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 may not be any intention to disclose the lower rate of profit. Considering these facts, and taking into account net profit in construction business, it would be reasonable to estimate 6% of net profit on total on-money receipts - Appeal of the assessee is partly allowed. (iii). 2022 (2) TMI 815-ITAT CHENNAI - SHRI T.R. SHANMUGASUNDARAM VERSUS DCIT CENTRAL CIRCLE-1, CBE COIMBATORE. AND (VICE-VERSA) "Addition on account of unaccounted/suppressed sales- The sale figures could not be said to be the income of the assessee. It is trite law that only the real income earned by the assessee could be brought to tax. It is the finding that the assessee has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the entries recorded in the seized data are not correct, complete and exhaustive and as such, reliance placed on such data is completely misplaced. Without prejudice to the above and without admitting the authenticity of seized data, it was also submitted that the seized data contains entries of alleged cash receipts / payments from 01/08/2009 and hence, cash balance as on 01/04/2011 is carried forward balance from the earlier year i.e., FY 2010-11. Therefore, it is not a case of fresh receipts/income in FY 2011-12, but the opening balance is result of closing balance of earlier year. Therefore, addition proposed in respect of said opening balance, which is carried forward from earlier year is totally unjustified and hence, strongly objected. As regard the addition proposed of Rs. 2,61,43,920/- in respect of negative cash balance in the cash book as per seized data, it is submitted that said negative balance itself proves that the seized data is not reliable and complete. If the data would have been maintained systematically, there could never be a negative balance. Further, there is no use of such data, which shows negative cash balance and hence, cognizance taken on such unsyste....
X X X X Extracts X X X X
X X X X Extracts X X X X
....naccounted income from various real estate projects proposed to be added in assessee's hands against addition proposed on account of peak cash balance as per the aforesaid seized data. Since, the entries of cash inflow / outflow in the above-stated two data filed i.e., "Shrushti Enterprise" and "Nav Shrushti Enterprise" are not identifiable or attributable to any specific person / entity, it was requested to treat the same as rotation of own funds i.e., funds available with various family members and associated concerns and once, additional income has already been estimated and taxed in all such cases, further making addition in respect of peak balance will tantamount to double addition. 25. Conclusion of the assessing officer The assessing officer, after considering the above reply of the assessee, decided to tax only the profit element embedded in the entire set of various kinds of unaccounted transactions that came to surface from the seized Miracle data. After thorough examination of the response to show- cause notices and rebuttal of various contentions raised by the assessee in its reply, the assessing officer noticed that the seized digital data in the form of acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rat), the Assessing Officer had found evidence of suppression of sales. He adopted the entire receipt (sales) as income but the Hon'ble Jurisdictional High Court has held that the entire undisclosed receipts (sales) cannot constitute income. The sales only represent the price received by the seller of the units for which the seller has already incurred the cost in order to acquire or process the inventory. Therefore, it is the realization of excess consideration over the cost incurred which should be assessed as profit or income. In other words, profit component embedded in the sales could be treated as income. The assessing officer also noticed that recently, in the case of PCIT v. Ms. Jay Kesar Bhavani Developers Pvt. Ltd. in Tax Appeal no. 267 of 2022, the Hon'ble Guj. High Court has held that only profit element embedded in the gross on-money receipts can be taxed. For this, the Hon'ble court has derived reference from its earlier decision delivered in the case of DCIT Vs. Panna Corporation reported in [2012] 74 DTR 89. Relevant part of the decision is as under : "it has been consistently held by this court and some other courts have been following the prin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....surplus range was primarily attributable to the stage in which a particular project has reached since its inception. For example, if any project is just launched then its % of net surplus funds would be lower because most of the funds are spent / applied on inventory and the inflow of on-money has not started in full pace. Due to combined effect of these two aspects the availability of surplus funds remains either on lower side or sometimes in negative state. Thus, it is understood that taking reference from the net surplus / unaccounted profits of such 'just launched' projects would not give true picture of the potential profitability of such projects. In order to estimate a reasonable rate of profit, it is taken that only those projects for which maximum data is available from the seized material should be relied upon. At the same time it is also ensured that the project that almost reached its final stage (with respect to construction activity and receipt of on-money both) should only be taken as reference for adoption of an appropriate rate of profit. After considering all the above aspects, following ten projects have been identified by the assessing officer as referen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g in such unaccounted transactions. Having said that and considering the facts of the present case and binding judicial precedents as discussed earlier, if all the expenses / payments are disallowed then the ratio laid down by the Hon'ble High Court with regard to not taxing all the receipts would remain on papers only. Thus, with a view to strike a proper balance between the factual vis-à-vis the legal aspects, it is decided to further enhance the aforementioned average net profit rate from 21% to 25%. Accordingly, 25% has been set as benchmark rate for the projects where details of unaccounted receipts as well as unaccounted expenses have been recovered from same set of the seized material. 29. The assessing officer further noted that there are some projects where details of only unaccounted receipts were recovered from the seized material. It would not be fair if the same benchmark of 25% is also taken for such projects, where no evidence regarding any kind of unaccounted payments are gathered during search or available on records. At the same time, because all the projects are being pursued by the same group of people, it is more likely that they would have deploy....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; 16,00,000 2,62,35,100 Profit @ 25% 4,00,000 65,58,775 R K Industrial Zone 11 (Protective 50% stake) Net on Money Receipts 67,55,500 6,00,10,655 2,08,65,291 1,06,46,765 Profit @ 28% 18,91,540 1,68,02,983 58,47,881 29,81,094 RK Industrial Zone 14 (Protective 75% stoke) Net on Money Receipts 2,74,31,588 Profit @ 25% 68,57,897 RK Industrial Zone 15 Net on Money Receipts 4,45,32,560 Profit @ 25% 1,11,58,140 RK Industrial Park 4 (Protective 50% stake) Net on Money Receipts 1,44,33,605 1,08,13,51....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he bank receipt as per the miracle ledger is Rs. 1,43,640/- (1,43,64,000 -1,42,20,360) which is nothing but lesser receipt in the bank of the assessee on account of TDS @ 1% of the sale value. Further, the difference in the purchase cost as reported by the assessee and the bank payment as per miracle ledger also is nothing but on the account of the stamp duty and registration charges born by the assessee at the time of acquisition of the property @ 6% (approx.) of the purchase value. Thus, it is abundantly clear that the cash receipt and cash payment in the seized miracle ledger is not reported by the assessee at the time of filing his income tax return. Therefore, the differential amount of cash receipt and cash payment, that is Rs. 28,87,490/- was treated as undisclosed short -term capital gain in the hands of the assessee for AY 2017-18. Therefore, assessing officer made addition of Rs. 28,87,490/- being undisclosed Short Term Capital Gain. 34. Additions as per the provisions of chapter-VI of the Income-tax Act The assessing officer observed that the opening balance (as on 01-04-2011 Rs. 3,12,54,700/-) of the common cash book of the three Miracle files on the account of it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....these files are not explained by the assessee, the maximum cash available for each and every year of the common-constant cash book of these two files should be brought to tax in the hands of the assessee. Accordingly, addition of maximum cash balance in respective years that was necessary to carry out the unaccounted transactions found noted on these two files is also being made in hands of the assessee as unexplained money within the meaning of section 69A of the Act, as under F.Y. Maximum Balance Surplus available from earlier years (as per column E cumulative) Difference Addition to be made A B C D=B-C E=B-C 2012-13 2,59,60,555 2,59,60,555 2,59,60,555 2013-14 4,69,24,440 2,59,60,555 2,09,63,885 2,09,63,885 2014-15 3,56,13,930 4,69,24,440 -1,13,10,510 -- 2015-16 2,85,63,760 4,69,24,440 -1,83,60,680 -- 2016-17 8,23,46,050 4,69,24,440 3,54,21,610 3,54,21,610 Therefore, assessing officer also made addition based on two miracle files to the tune of Rs. 3,54,21,610/-, under section 69A of the Act for assessment 2017-18. 36. Aggrieved by the various additions made by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the previous year 2021-22 (01.04.2021 to 31.03.2022) and relevant assessment year is 2022-23 (01.04.2022 to 31.03.2023). Therefore, assessment year 2022-23 became first assessment year and assessment year 2013-14 became 10th assessment year, therefore, notice under section 148 of the Act, issued by assessing officer for reopening assessment for assessment year 2012-13 is barred by limitation, as per section 149 of the Act. Therefore, reassessment proceedings initiated under section 147/148 of the Act, by the assessing officer against the assessee for assessment year 2012-13 should be quashed. 40. On the other hand, learned DR for the revenue fairly agreed that assessment 2012-13, falls beyond the period of 10 year, hence reassessment proceedings cannot be initiated. However, on merit, learned DR relied on the findings of the assessing officer. 41. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We find merit in the submissions of learned Counsel for the assessee, to the effect that where search was conducted in Financial Year 2021-22, assessment year 2022-23 became first a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessment year 2016-17, became tenth assessment year, so notice under section 148 issued for reopening assessment for year 2015-16 was barred by limitation as per section 149 read with sections 153A and 153C of the Act. The detailed findings of the Hon'ble Court is reproduced below: "ANALYSIS AND OPINION: 7. We have heard the learned advocates at length. We have also perused the case laws cited above and have considered the provisions threadbare. 8. The facts which are established from the pleadings are that a search action under Section 153A of the Act against the searched person was undertaken on 09.05.2024, which indubitably falls in the Financial Year 2024-25. The revenue found some incriminating material against the present petitioner and accordingly issued the impugned notices for reopening the assessment for the year 2015-16. The notice has been issued under Section 148 of the Act. With reference to the date of search, it is necessary to refer to the provisions of Section 152(3) of the Act, which read as under: "Section 152(3) "Where a search has been initiated under section 132 or requisition is made under section 132A or a su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich has elapsed from the end of the "relevant assessment year". The relevant assessment year in the present case is 2015-16, which is prior to the cut-off date of 1st April, 2021, as specified in the first proviso. The link between Section 149 and Sections 153A and 153C of the Act is found in the first proviso to Section 149(1) of the Act. The expression "relevant assessment year" is explained under Explanation 1 to the fourth proviso to Section 153A(1). The first proviso to Section 149(1) of the Act bars the issuance of notice under Section 148 of the Act for the relevant assessment year beginning on or before 01st April, 2021, if a notice under Section 148 or Section 153A or Section 153C of the Act could not have been issued at that time on account of it being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of Section 149 of the Act or Section 153A or Section 153C of the Act. In the present case, the notice under Section 148 of the Act emanates from the search proceedings undertaken under Sections 132/132A of the Act, and hence the provisions of Sections 153A and 153C of the Act would get attracted, and the reassessment of the petitioner has....
X X X X Extracts X X X X
X X X X Extracts X X X X
....less- (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years, (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years, and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017 Explanation 1 For the purposes of this sub-section, the expression "relevant assessment year shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made." 9.2 The provisions of Sections 153A/153C of the Act find place in the proviso to Section 149 of the Act and, hence, the limitation as provided in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e case of the six relevant AYs. 90. Viewed in that light, and while keeping the period of 01 April 2021 to 31 March 2022 as the constant, the relevant AY would be AY 2022-23. The ten AYs would have to be computed from 31 March 2023 with the said date indubitably constituting the end of the AY relevant to the previous year of search. Viewed in light of the above, the block period of 10 AYs would be as follows .- Computation of the six-year block period as provided under section 153C read with Section 153A No of years AY 2022-23 1 AY 2021-22 2 AY 2020-21 3 AY 2019-20 4 AY 2018-19 5 AY 2017-18 6 AY 2016-17 7 AY 2015-16 8 AY 2014-15 9 AY 2013-14 10 91. Tested on the aforesaid precepts, it would be manifest that AY 2022-23 would form the first year of the block of ten AYs' terminating in AY 2013-14. We, in this regard also bear in consideration the following instructive passages as appearing in the decision handed down by a learned Judge of the Madras High Court in A.R.Safiullah. We deem it appropriate to extract the following paragraphs from that decision: - "9 Explanation-I is clear as to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sion. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity, Such a provision cannot be elastically construed. 11. One other contention urged by the standing counsel has to be dealt with. It is pointed out that the petitioner has invoked the writ jurisdiction at the notice stage. Since the petitioner has demonstrated that the subject assessment year lies beyond the ambit of the provision, the respondent has no jurisdiction to issue the impugned notice. Once lack of jurisdiction has been established, the maintainability of the writ petition cannot be in doubt." In our considered opinion, the decision in A.R Safiullah correctly expounds the legal position and the interpretation liable to be accorded to the identification of the ten AYs which are spoken of in sections 153A and 153C." 9.3 Thus, it is precisely held hereinabove that the statute prescribes different modes of co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssion on the limitation prescribed in the first proviso, which relates to Sections 153A or 153C of the Act. Hence, it is not dealt. 10. For the foregoing reasons, the impugned notice dated 31.03.2025 issued under Section 148 of the Income-tax Act, 1961 by the respondent - Department seeking to reopen the income-tax assessment of the petitioner for the respective assessment year is hereby quashed and set aside. The petitions are allowed accordingly. RULE is made absolute accordingly, with no order as to costs.' 43. From the above judgement of the jurisdictional High Court of Gujarat, in the case of Jayantibhai Karamshibhai Maniya(supra). It is vivid that when the law has prescribed a particular length, it is not for the court to stretch it. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the Department. Consid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r search assessment of search party as well as third-party are made under section 147 of the Act, unlike in the earlier/ old scheme of search assessment, wherein the search assessment of searched party was made under section 153A of the Act, whereas the assessment of third-party, was made under section 153C of the Act. Since, in the present reassessment proceedings, both of the searched party, as well as third party assessments are covered. It is observed that the initiation of reassessment proceedings in the present case is valid in law. While passing the assessment order, the assessing officer also observed that search was carried out at the assessee's premises on 24.08.2021, and pursuant to the search, notice under section 148 of the Act, was issued in case of the assessee. As search was carried out in the case of the assessee after 01.04.2021, wherein, provisions of section 148 were amended and provides deemed satisfaction for three assessment years prior to the date of search, and even on this ground, the assessing officer has validly issued notice under section 148 of the Act. Hence, there is no defect in the reassessment proceedings, therefore, we dismiss the ground rais....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o.4 in IT(ss) No.24/RJT/2024 for AY 2022-23. The Revenue's plea in these grounds are that addition made by the assessing officer should be sustained.) (viii). The ld. CIT(A)erred on facts as also in law in retaining addition of Rs. 1,92,000/- by estimating profit 12% of so called on money receipt in respect of project "R K Industrial Zone- 9 (Phase-4)". The addition made and retained is bad in law as also on facts therefore the same may kindly be directed to be deleted. (This is, assessee's ground No. 3 in ITA No. 815/RJT/2024 for AY 2018-19, and Ground No.3 in ITA No. 816/RJT/2024 for AY 2019-20) (This is also revenue's ground No. 1 in ITA No. 794/RJT/2024 for AY 2018-19 and ITA No.795/RJT/2024 for AY 2019-20. The plea of the revenue in these grounds are that addition made by the assessing officer should be sustained.) (x) The ld. CIT(A)erred on facts as also in law in retaining addition of Rs. 56,99,160/- by estimating profit @ 12% of so called on money receipt in respect of sale of plots at Village Haripar Dist. Rajkot. The addition made and retained is bad in law as also on facts therefore the same may kindly be directed to be del....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f such receipts, must bear an element of estimation." Besides, Hon'ble jurisdictional ITAT Ahmedabad Bench, in many cases held that profit estimation at the rate of 8% on "on money", is sufficient to protect the interest of the revenue. Therefore, learned Counsel for the assessee, contended that profit estimation on "on- money", made by the Ld. CIT(A), is on very higher side. Therefore, it should be reduced to a reasonable extent as per the mandatory jurisdictional judgement of Hon'ble Gujarat High Court, on this issue. 52. On the other hand, learned DR for the revenue submitted that profit estimation made by the assessing officer on, "on money" should be upheld. 53. We have carefully considered the facts of the case, the submission of the Learned Counsel for the assessee and ld. DR for the Revenue and evidences on record. In the case of Union of India v. Raghubir Singh (1989) 178 ITR 548 (SC), the Supreme Court held that the doctrine of binding precedent has merit of promoting certainty and consistency in judicial decisions. As per the doctrine of precedent, all lower Courts, Tribunals and authorities exercising judicial or quasi- judicial functions are bound by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly, this is because, due to location of the project and moreover, the cost and expenses are more than other similar projects. In these circumstances, we find that profit element embedded in commercial projects and housing projects should be estimated by applying the uniform rate of 10% on "on-money". Therefore, considering the mandatory judgement of the jurisdictional Hon'ble Gujarat High Court, in the case of Ms. Jay Kesar Bhavani Developers Pvt. Ltd(Supra) and considering the peculiar facts of the assessee's case, narrated above, we are of the view that profit estimation on, "on money" at the rate of, 10% is fair and reasonable. 55. We note that issue under consideration is squarely covered in favour of the assessee in the assessee's own group cases, M/s R.K. Group, in ITA No. 528/RJT/2024 & others in the case of M/s. R K Infralink LLP, by the decision of Coordinate Bench of ITAT Rajkot. The findings of the Co-ordinate Bench of ITAT Rajkot is reproduced below: "14. In this summarised and concise ground, the plea of the assessee is that estimated profit at the rate of 16% on the so called "on money" is on higher side, considering the judgement of the jurisd....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g it at 20% HELD THAT :- CIT(A) has also not mentioned any attending circumstances for harbouring a belief that 20% could have been earned from this activity. Thus after taking guidance from the judgment of Kishor Mohanlal Telwala [1998 (9) TMI 106-ITAT AHMEDABAD-Al we deem it proper that the assessee has rightly disclosed the profit element embedded in the gross profit at 8%. Accordingly, we allow the ground of appeal raised by the assessee, and hold that profit which has been directed to be adopted by the Ld.CIT(A) at 20% of the alleged turnover should be taken at 8%. (ii) Tax appeal No.267 of 2022 dated 07.07.2022 M/S. JAY KESAR BHAVANI DEVELOPERS PVT. LTD. (Guj-HC) "Rejection of books of accounts u/s 145(3) On money receipt estimation of income addition on account of entire construction receipts as alleged unrecorded receipts - HELD THAT: CIT (A) was not justified in confirming the addition of entire on-money receipts amounting to 4,72,02,368. Therefore, only estimated net profit is required to be taxed. We find that the assessee has shown net profit at 4.55.% for the assessment year under consideration and 4.59% for A.Y. 2010-11. Further, the Hon'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from said transactions which has been admitted by assessee at Rs. 45,00,000/- can only be assessed to tax more so when the assessee has disclosed in PMGKY the said undisclosed income of Rs. 45,00,000/- and paid tax in accordance with scheme and received certificate there for from Pr. Commissioner of Income Tax, hence the same disclosed income cannot be included as income is assessment as per Section 199-l of PMKGY. However Ld. A.O. has allowed credit of amount of disclosed income in PMKGY from total income as so the addition on this account is restricted to Rs. 45,00,000/- and balance is deleted. The assessee thus gets relief of Rs. 3,02,00,000-45,00,000 = Rs. 2,57,00,000/-. " (v) Greenfield Reality P. Ltd IT(SS) A No. 320,321 and 322/Ahd/2018 & 329/Ahd/2018: "16. We have duly considered rival submissions and gone through the record carefully. On an analysis of the record, it would reveal that during the course of search not only details of on-money received by the assessee on booking of flats and shops in "Vesu Project" was found, but details of certain expenditure, which are not recorded in the books were also found. This included cash payment for purchase of la....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oping that flat. Thus, in other words, the expenditure whose details were found being incurred in cash could be construed as coming out of these Rs. 92/-. Thus, there cannot be any separate addition of unexplained expenditure. The Ld.CIT(A) has rightly deleted the addition." 15. We note that the assessee is in appeal before us and praying the Bench that estimated addition is very higher side and it should be reduced, at a reasonable level. However, learned DR for the revenue submitted that addition made by the assessing officer may be confirmed. We note that the estimation of income is based on facts and will vary from business to business and year to year, depending on the business conditions. We note that ld.CIT(A) has estimated the profit on the "on-money" at the rate of 16% but the ld. CIT(A) has failed to bring on record any comparable case in support of his estimation that too @ 16% and in some cases 8% and 12% etc. No doubt estimate of the profit can be resorted to in these types of cases but the estimate and that too at a particular percentage or fraction of percentage which ld CIT(A) has adopted has to be based on sound reasoning in comparison with the past result....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the revenue. " 56. Therefore, respectfully following the binding judgement of the Co-ordinate Bench of ITAT Rajkot in assessee's own case (Supra) we partly allow the following appeals of the assessee: (i) Ground No. 3 & 4 in ITA No. 809/RJT/2024 for AY 2012-13, (ii) Ground No. 3 & 4 in ITA No. 810/RJT/2024 for AY 2013-14, (iii) Ground No. 3 & 4 in ITA No. 811/RJT/2024 for AY 2014-15, (iv) Ground No. 3 & 4 in ITA No. 812/RJT/2024 for AY 2015-16, (v) Ground No. 3 & 4 in ITA No. 813/RJT/2024 for AY 2016-17, (vi) Ground No. 3 & 4 in ITA No. 814/RJT/2024 for AY 2017-18, (vii) Ground no.5 & 6 in ITA No.815/RJT/2024 for AY 2018-19, (viii) Ground no.4 & 5 in ITA No.816/RJT/2024 for AY 2019-20, (ix) Ground no.5 & 6 in ITA No.817/RJT/2024 for AY 2020-21, (x) Ground no.4 & 5 in ITA No.818/RJT/2024 for AY 2021-22, (xi) Ground no.3 & 4 in ITA No.819/RJT/2024 for AY 2022-23. (xii) Ground No. 3 in ITA No. 815/RJT/2024 for AY 2018-19, (xiii) Ground No.3 in ITA No. 816/RJT/2024 for AY 2019-20 (xiv) Ground No. 4 in ITA No. 815/RJT/2024 for AY 2018-19, (xv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Miracle data. In this regard, the findings of learned CIT (A) is relevant, which is reproduced below: "16.13 As per the working of re-casted cash flow submitted by the assessee, it is seen that after merging the different cash books (five miracle files seized) and other documents seized from the premises of Shri Deepak Purswani, Shri Brijlal Sonvani and the assessee himself, highest negative cash balance works out to Rs. 5,63,12,000/-, which is bifurcated in various years from AYs 2014-15 to 2018-19 as under: AY Amount 2014-15 54,83,000/- 2015-16 1,67,52,762/- 2016-17 2,96,69,238/- 2017-18 4,90,000/- 2018-19 39,17,000/- Total 5,63,12,000/- 16.14 Since, the unaccounted transactions as per the merged cash book are already taken care while determining the unaccounted income in the hands of various real estate group concerns and members of RK Group, there is no reason in making addition in respect of peak (maximum) cash balance from the merged cash book. However, negative cash balance (deficit of fund) implies that the assessee has infused his own capital for the various business operations by RK Group, which has not been reco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on is squarely covered in favour of the assessee in the assessee's own group cases, M/s R.K. Group, in ITA No. 528/RJT/2024 & others in the case of M/s. R K Infralink LLP, by the decision of Coordinate Bench of ITAT Rajkot. The findings of the Co-ordinate Bench of ITAT Rajkot is reproduced below: "30. The brief facts qua the above summarise ground are that during the assessment proceeding, the assessing officer had found that the promissory notes seized from the premises of Shri Deepak Puruswani reveals that the assessee -firm had advanced cash loan to various persons. In this regard, the assessee- firm had objected the allegation of the assessing officer and denied of advancement of cash loan. However, without prejudice, the assessee had requested to provide benefit of telescoping as the addition had been made on account of alleged profit embedded in the unaccounted transactions from the project "R K Empire". Therefore, if any addition on account of alleged unaccounted income would be made in case of assessee- firm then application of such income in form of alleged unaccounted loans/advances is to consider to avoid duplication of addition. The submission made by the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g the year under consideration and the assessing officer had made addition of Rs. 4,59,15,807/-, on account of estimation of net profit @35% of total net 'on-money' receipt of Rs. 13,11,88,020/-. Further, while adjudicating the appeal of the assessee, the ld. CIT(A) has confirmed unaccounted profit @ 16% of total "on-money" receipt. It means that estimated unaccounted profit was more than the cash advanced by the assessee. Therefore, the assessee is entitled to get the benefit of telescoping of confirmed unaccounted profit against the cash advanced of Rs. 97,30,000/-. Therefore, considering these facts, the learned CIT(A) deleted the addition. We have gone through the above findings of the learned CIT(A) and noticed that there is no infirmity in the conclusion reached by the learned CIT(A). That being so, we decline to interfere with the order of ld. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed." 63. Therefore, respectfully following the judgement of the Co-ordinate Bench of ITAT Rajkot, in the assessee's own group case (supra), the following appeals of the revenue,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng officer noticed that the cash receipt and cash payment in the seized miracle ledger is not reported by the assessee at the time of filing his income tax return. Therefore, the differential amount of cash receipt and cash payment, that is Rs. 28,87,490/- (7,49,86,590-7,20,99,100) was treated as undisclosed short term capital gain in the hands of the assessee for AY 2017-18. 66. On appeal, the ld.CIT(A) confirmed the action of the assessing officer. The ld.CIT(A) noticed that the digital data contains the details of land purchased and sold by the assessee at village Munjka. The purchase and sale of land at Munjka has been recorded as "Munjka 37" in such digital data which was also corroborated by the AO from the ledger maintained by the accountant named as "Munjka 37" wherein the bank entries recorded in the Miracle ledger was matched with the document price of land and books of account. The entries has been backdated by 10 years and the amount has been divided by 100, so as to mislead the reader of the data. Therefore, ld.CIT(A) confirmed the action of the assessing officer. Aggrieved by the order of the learned CIT(A). The assessee is in further appeal before us. 67. We ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITA No. 795/RJT/2024 for AY 2019-20, Ground No.1 in ITA No.796/RJT/2024 for AY 2020-21 and Ground No.1 in IT(ss) No. 24/RJT/2024 for AY 2022-23.) (ix). On the facts and in circumstances of the case and in law the Ld. CIT(A) has erred in directing to delete the profit arising on account of on-money received at 25% for project R K Industrial Park-4 estimated by the AO as protective addition not appreciating that the profit rate had applied on on-money received which was over and above the disclosed business receipt and ignoring the detailed reasoning given by the AO for adopting the GP rate. (This is, revenue's ground no. 3 in ITA No. 794/RJT/2024 for AY 2018-19 and Ground No.3 in ITA No.795/RJT/2024 for AY 2019-20.) (xi) On the facts and in circumstances of the case and in law the Ld CIT(A) has erred in directing to delete the profit arising on account of on-money received at 25% for project RK Industrial Zone-14 estimated by the AO, as protective addition not appreciating that the profit rate had applied on on-money received which was over and above the disclosed business receipt and ignoring the detailed reasoning given by the AO for adopting the GP ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No: 8410/DEL/2019) ii. Hon'ble Delhi ITAT"A" Bench in the case of Anand Kumar Jain vs ACIT (ITA No: 1318/Del/2019) 86.2 In this regard, it is relevant to mention here that the undersigned has adjudicated the appeal in the case of Smt. Priya Devra and have confirmed substantive addition for the project R K Industrial Zone 14 in her case and have estimated profit @ 12% on the unaccounted cash receipt on merit vide appeal no CIT(A), Ahmedabad-11/10700/2019-20 dated 18.06.2024. 86.3 Since the undersigned has confirmed the substantive addition in cases of Smt. Priya Devra and have estimated profit @ 12% on the unaccounted cash receipt for the project R K Industrial Zone 14 on merit, therefore, the protective addition for the same addition in the hand of appellant does not survive. 86.4 In view of the above, the AO is directed to delete the protective addition made. Thus, the ground of appeal no 5 is allowed." 73. We note that Indian tax jurisprudence clearly holds that protective additions cannot survive once substantive additions on the same income are finally sustained in the hands of the correct assessee, because the same income cannot be ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ised and concise ground No.14, is reproduced below for ready reference: (xiv) The Ld CIT(A) has erred in directing the AO, to tax, the unaccounted profit in the year in which sale deed is executed instead of the year in which the on-money has been received, ignoring that the same is not in accordance with Accounting principles as per ICDS-3 applicable to Real Estate Developers and also not appreciating that the income on account of undisclosed on-money receipt was required to be assessed in the year of receipt. (This is revenue's ground No. 7 in ITA No. 794/RJT/2024 for AY 2018-19, Ground No.6 in ITA No. 795/RJT/2024 for AY 2019-20, Ground No. 6 in ITA No. 796/RJT/2024 for AY 2020-21, Ground No. 5 in IT(ss) No. 24/RJT/2024 for AY 2022-23)" 77. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We have heard learned DR for the revenue in detail and learned Counsel for the assessee also. In our considered view, it was wholly erroneous on the part of the authorities below to apply the accounting principles of ICDS-III, as it is not applicable to the assessee, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore, ICDS-III is not applicable to the assessee under consideration. Hence, we are of the view that ICDS-III applies to Contractors (not contractees). Fundamental Accounting Principle, as per ICDS-III is the Percentage of Completion Method (POCM). The Percentage of Completion Method is mandatory method under ICDS-III. Under ICDS-III the Revenue from variations, claims and incentives shall be recognised only when there is reasonable certainty of its ultimate collection. 24. We note that even if the addition on account of estimated profit on alleged "on-money" cash receipts is made, the same should be made in the year of actual sale when the conveyance deed is executed in the favour of buyer when the significant risk and rewards are transferred. It is observed that the assessee has consistently followed revenue recognition method whereby sale is offered to tax when registered sale deed of particular unit is executed, that is, date on which significant risk and reward has been transferred to buyer. This method of accounting has been followed consistently by assessee on year to year basis and assessing officer has not disturbed such methodology. This method of accounting of re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 292 wherein it was held as under: "Section 145 of the Income-tax Act, 1961 Method of accounting (Project completion method) - Assessee was engaged in construction business - It was subjected to a survey action which was conducted on business. premises - During course of survey, statement of one partner of firm was recorded in which, he admitted of firm having received a sum of Rs. 26.05 crores not disclosed in books of account-While doing so, he further stated that same would be subject to registration of sale deeds When assessment was undertaken, assessee contended that firm was following project completion method of accounting and income would be offered to tax as and when final sale deeds were registered Assessee firm thus offered only a sum of Rs. 1 crore during year under consideration Assessing Officer rejected assessee's stand and added entire amount of Rs. 26.05 crores as income of assessee during current year Tribunal accepted assessee's contention that since firm was following project completion method for offering income to tax, same would be subjected to tax upon completion of sale, though amount may have been received earlier from buyer Revenue filed ....