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TMI Blog2014 (2) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... of project - Held that:- The cost of project land was disallowed by the AO on the basis of the sheet of paper "Annexure A" found during the survey which contained the estimated account for the period 14.03.2006 to 31.03.2007 and as on the date of survey, the accounts are not complete - The authorities are not justified to make/confirm the disallowance on the false presumption based on the said sheet of paper found during the survey when the assessee is entitled for deducting the cost of acquisition the project land - Decided in favour of assessee. - ITA No. 850/Mum/2011 - - - Dated:- 4-2-2014 - Shri D. Karunakara Rao And Dr. S. T. M. Pavalan,JJ. For the Appellant : Shri K. Gopal For the Respondent : Shri Pitambar Das ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord, it is pertinent to mention that the sheet of paper Annexure A‟ dated 02.03.2007 found in the drawer of the office cabin during the course of survey is an estimate showing the amount of estimated sale from project as well as the estimated profit for the year ended 31.03.2007. The assessee has explained the said sheet of paper by giving the statement under section 133A which has been recorded and accepted by the survey party. The extract of the statement of Shri Salim G. Goud, Managing Partner of M/s. B. H. Constructions recorded on oath under section 131 of the Income Tax Act, 1961, during the course of survey under section 133A reads as under: 5. Upto what date your books of accounts are written? Ans: Books of accounts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores and after deducting the direct and indirect cost the project profit is about Rs.95 lakhs. This working has been based on the actual and real derived by the absence exact details of the expenditure I hereby offer Rs. 1 crore as minimum profit from the project. Palm Acre for the financial year 2006-07. Since I have already paid advance tax of Rs.9 lakhs so far, I hereby hand over two post dated cheques for balance tax payment of Rs.25 lakhs." The perusal of the statement aforementioned indicates that the department started recording statements on 12th March which was completed on 13th March 2007. As on the date of survey as recorded in answer given for question no. 5, books of accounts have been written up to 10th March 2007. As per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the project Palm Acre wherein the agreement entered for flat no. 403 with Mr. Richard Macdonald Pearl, but pending for registration has been considered in sale proceed of Rs.2.65 crores. The answer to question no.9, working show that total sale proceed of the flat sold as per agreement value, supports this view. Considering the entirety of the facts, we find merit in the contention of the assessee that the total sale proceeds shown at Rs. 265 lakhs towards sale of flat should be read as under:- Sale proceeds accounted as sale in books Rs. 235 lakhs. The sale consideration net of advance for flat 403 Rs.30 lakhs Total Rs. 265 lakhs The closing stock and amount receivable break ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the sales made during year under consideration and the Ld.CIT(A) has confirmed the findings of the AO. It is observed that the said disallowance has been made by the AO on the basis of the sheet of paper Annexure A‟ found during the survey which contained the estimated account for the period 14.03.2006 to 31.03.2007 and as on the date of survey, the accounts are not complete. When the facts are being so, we do not find any justification on the part of the authorities below to make/confirm the disallowance on the false presumption based on the said sheet of paper found during the survey when the assessee is entitled for deducting the cost of acquisition the project land. In view of that matter, we are of the considered view th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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