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TMI Blog2017 (4) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to pay a sum of ₹ 38 lakhs to the erstwhile organizer of NTC and further a amount of ₹ 21.91 lakhs for the land to various persons and it had also to spend a sum of ₹ 158 lakhs on the cost of construction for which necessary deduction has to be allowed. In any case what can be taxed is the profit which could have been earned by the assessee on the alleged unaccounted receipts amounting to ₹ 1,32,91,840/- and not the entire amount. Further, the AO has not brought any material on record that the assessee in fact had made any initial investment of ₹ 15 lakhs as alleged. In any case even if it is assumed that the assessee did make an initial investment of ₹ 15 lakhs which is to be taxed under section 69C t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 lakhs disclosed by the assessee as undisclosed income in the return filed in response to notice under section 158BC. - Decided in favour of assessee. - I.T.A No. 2369/Ahd/2013 - - - Dated:- 5-12-2016 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER And SHRI MAHAVIR PRASAD, JUDICIAL MEMBE For The Appellant : Shri Mudit Nagpal, Sr.D.R. For The Respondent : Shri K.K. Shah, A.R. ORDER PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : This appeal has been filed by the department against the order of the Commissioner of Income Tax(Appeal), Surat dated 28/01/2013 for Assessment Year (AY) 2006-07 and following grounds have been taken:- (i) On the facts and in the circumstances of the case and in Law, the Ld.CIT(A) has erred in al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses has been shown by you. You are therefore, requested to show cause as to why average rate of each row houses should not be taken as ₹ 8,00,000/- and difference of ₹ 44,60,000/-(Rs.48,00,000 - ₹ 3,40,000) should not be treated as your undisclosed income earned from the said project for the year under consideration and be added to your total income, 2. In perusal to the above notice assessee/appellant replied that he has sold 08 plots of Manav Row House and executed sale deed for plot with every purchaser. The assessee has sold all these plots in F.Y.2005-06 i.e. A.Y.2006-07, for which income from the sale of these plots have been duly offered for income tax in the return of income filed for A.Y.2006-07. Summary o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000 03. --do-- 2007-08 07,51,500 04. --do-- 2008-09 13,71,812 Total :- 34,09,312 4. With regard to the statement given before Id.ADIT, assessee clarified that the details and figures given at the time recording statements were approximate and not exact. As the assessee was less educated and not having proper accounting knowledge, it was possible that some variations seen between the statement recorded and actual facts and documents produced. But Id.AO was not satisfied with the contention of the assessee and me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of ₹ 20,00,000/- is accepted, it would amount to 71.5% of turnover which in my opinion is impossible to achieve. The appellant has asked for the determination of income as per section 44AD and has also relied on decisions where income from development has been considered at 8% to 10%. The income of the appellant cannot be determined, owner of the project and not just executing civil contracts. In his opinion it was reasonable to adopt a profit rate of 12% on sale price. The income of the appellant from raw house project is therefore determined at ₹ 3,36,000/- and the A.O. was directed to consider this in the computation of income. 6. We have gone through the relevant record and impugned order and assessee filed a judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the assessee on the alleged unaccounted receipts amounting to ₹ 1,32,91,840/- and not the entire amount. Further, the AO has not brought any material on record that the assessee in fact had made any initial investment of ₹ 15 lakhs as alleged. In any case even if it is assumed that the assessee did make an initial investment of ₹ 15 lakhs which is to be taxed under section 69C the corresponding deduction will have to be allowed u/s 37 of the Act as the investment was made in acquisition of business assets and as such the amount spent, was for the business of the assessee. 7. In respect of flats and the Mumbai Bench of the tribunal in the case of Mrs. Mehroo IV. Irani in ITA No.ll40/Bom/89 has taken the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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