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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 ..... ed, the assessee, a firm engaged in the business of civil contractors and developers, for the year under consideration, filed the return of income declaring a total income at Rs.99,04,465/-. In the assessment framed under section 143(3) of the Income Tax Act, the AO had assessed and thereby determined the total income at Rs.16323570/-.The said determination of the total income included the additions of Rs.64,19,106/- and Rs.18,00,000/- on account of estimated sale profits from the project and the disallowance of cost of the project from the sale profits respectively. The AO made the said additions/disallowances on the basis of the statement of Shri Salim G. Goud, Managing Partner of M/s. B. H. Constructions recorded on 12.03.2007 during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference of Rs.6,660/-, in cash in hand and cash found. Ans: We have made petty cash expenses of Rs.6,660/- for which bill have not been entered in the books of accounts. 9. I am showing you a sheet of paper marked as "Annexure A" found in the drawer of your office cabin, which gives details as under:- Rs. in crores Total sale proceed Rs.2.65 Closing stock Market Value Rs.0.50 Cash Receipt Rs.0.30 Less Direct Cost Rs.2.20 Indirect Cost Rs.0.30 Rs.2.50 Profit (Approx,) Rs.0.95 It is a computerized printout of the working of project profit. Please let me know as to when this was drawn and also explain in details entry therein. Ans: This is working of project profit prepared by the firm as on 02.03.2007 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in CSE as stated in question no.9. This is supported by the ledger copy which shows the entry appearing on 13th March 2007 and the copy of trial balance for the period April 01, 2006 to March 13, 2007 where the credit of Rs.30 lakhs is appearing under the head "Miscellaneous Cash Receipt" (sales account). The assessee has demonstrated that only one flat remained unsold has been given by considering the advances received against sale of flat no. 403 from Mr. Richard Macdonald Pearl on 19.02.2007. Rs.5 lakhs and agreement for Rs.35 lakhs has been lying in the office. The balance amount of Rs. 30 lakhs has been receivable and received on 15.03.2007. The assessee has received advance of Rs.5 lakhs against sale of flat no. 401 from Ulfat Ni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproximately 95 lakhs as against returned taxable income at Rs.99 lakhs. In the above circumstances, we are of the considered opinion that since the AO has not correctly appreciated the facts while estimating the income by ignoring the audited book, the Ld.CIT(A) is not justified in confirming the impugned addition of Rs.64,19,106/- made by the AO on account of estimated sale profits from the project and hence the same is deleted. 5. As regards the addition confirmed on account of disallowance of cost of the project from the sale Rs.18,00,000/-, it is pertinent to mention that the assessee, in the P&L account, has debited the said amount against „project land cost - Kalina‟ on account of the expenditure incurred for acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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