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TMI Blog2016 (4) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... ogether and disposed of by way of this common order, for the sake of convenience. 2. The brief facts of the case are that the assessee is a partnership firm which is engaged in the business of development of apartments & flats. A search and seizure operation was carried out in the group cases of the assessee on 3.2.2009. Consequent to search, the case was centralized to Central Circle, Rajahmundry vide notification FNo.62/Juris/CIT/RJY/2009-10 dated 29.6.2009 and accordingly, a notice u/s 153C of the Income Tax Act, 1961 (hereinafter called as 'the Act') dated 3.3.2010 was issued to the assessee. In response to the notice u/s 153C of the Act, the assessee has filed its return of income for the assessment year 2008-09 on 26.3.2010 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is at Rs. 1,200/- per sq.ft. As per these seized documents, it was noticed that Shri Badam Sundara Rao, Kakinada, Approved Valuer for banks and financial institutions have valued 3 flats in the name of Smt. Lalitha, Shri Bhawarlal & Shri Rajendra Kumar and arrived at a fair market value of the flat at Rs. 1,200/- per sq.ft. Based on such valuation report, the A.O. was of the opinion that the financial results declared by the assessee for the year under consideration is not reliable as the assessee has failed to bring on record the total sale receipts in the books of accounts. Therefore, issued a show cause notice and asked to explain why the value of Rs. 1,200/- per sq.ft. should not be adopted for the total built up area of project to ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68,110/-declared by the assessee. 6. Aggrieved by the assessment order, the assessee preferred an before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the assessing officer. The assessee further submitted that the valuation report found during the course of search in the residential premises of one of the partner cannot be taken as basis for arriving at the sale price of the flats. The valuation report obtained by the prospective buyers for the purpose of obtaining bank loan is valued by taking into fair market value of the project which is not the real construction cost or the sale price of the project. The assessee further submitted that it has maintained regular books of accounts, wherein recorded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further held that though the valuation report issued by registered valuer is not the basis for estimation of sale price, compared the sale value declared by the assessee in respect of 3 flats for which the valuation report was seized by the department and arrived at a difference of Rs. 8,65,000/- in respect of 3 flats. With these observations, the CIT(A) directed the A.O. to sustain the addition to the extent of Rs. 8,65,000/- and delete the balance amount of Rs. 65,84,620/-. Aggrieved by the CIT(A) order, the revenue as well as assessee are in appeal before us. 8. The Ld. D.R. submitted that the CIT(A) was erred in deleting the additions made by the A.O., as the addition was based on a seized document. The Ld. D.R. further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not reliable, therefore, he has estimated the net profit from the project by taking into account the total built up area sold multiplied by value arrived by the registered valuer. It was the contention of the assessee that the registered valuer's report cannot be taken as basis to arrive at a sale price of the project. The assessee further contended that it has maintained regular books of accounts and bills & vouchers in support of the expenditure claimed in the P&L account. It was not the case of the A.O. that there is a mistake in the books of accounts maintained by the assessee. The books of accounts are audited by a Chartered Accountant u/s 44AB of the Act and found no errors, which is evident from the audit report issued by the audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the A.O. cannot estimate the sales based on the valuation report. The sales declared in the books of accounts are supported by sale deeds registered in the office of the Sub-Registrar. The A.O. did not pointed out any mistakes in these documents. The registered valuer valued the building by taking into account, fair market value of the property which is based on prevailing market rate available as on the date of valuation. The said valuation report was issued for the purpose of obtaining bank loan by the prospective buyers. 13. In the present case on hand, on perusal of facts, we notice that the assessee entered into Joint Development Agreement with land owners. As per the said Joint Development Agreement, separate sale deeds are execute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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