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TMI Blog2020 (9) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... such receipts can be brought to tax, in our view, no interference is called for in the decision of the Tribunal accepting such element of profit at ₹ 26 lakhs out of total undisclosed receipt of ₹ 62 lakhs. We accept the legal proposition, the Tribunal accepting ₹ 26 lakhs disclosed by the assessee as profit out of total undisclosed receipt of ₹ 62 lakhs, would not give rise to any question of law. - R/Tax Appeal No. 168 of 2020 - - - Dated:- 10-9-2020 - Honourable The Chief Justice Mr. Vikram Nath And Honourable Mr. Justice J.B.Pardiwala For the Appellant(s) : Mrs Kalpanak Raval ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. This tax appeal under Section 260A of the Income Tax Act, 1961 (for short the Act, 1961 ) is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Surat dated 13th December, 2019 in the ITA No.2036/Ahd/2016 for the A.Y.2013-14. The Revenue has proposed the following questions of law for the consideration of this Court; (i) That on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appellate Tribunal ( the Tribunal for short) dated 1.9.1999. 2. The respondent assessee is a partnership firm engaged in the business of construction of flats and residential complexes. The assessee started construction of a total of 120 flats in a complex called Ashoplab Apartments in the city of Surat. The scheme contained three types of flats admeasuring 725 square feet, 750 square feet and 975 square feet respectively. The flats were sold at a disclosed rate of ₹ 185/- per square feet. A search was carried out on 4.7.1996. Initially, a disclosure was made of undisclosed income of ₹ 3.5 lakhs by a partner of the assessee firm Shri K. R. Sardara. This disclosure was confirmed by the other partner of the firm Shri Janakbhai P. Balar in his statement on 5.7.1997. In response to notice issued by the Department, the assessee filed return declaring undisclosed income of ₹ 26 lakhs. During the search of the residential premises of Shri Balar, a loose paper No.31 was found and seized. The paper pertained to details of sale of two of the flats. The statement of Shri Balar under section 132(4) of the Income Tax Act, 1961 was recorded on 4.7.1996. On the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is only the income and not the entire receipt. He submitted that the Tribunal having accepted that such income could not exceed ₹ 26 lakhs out of total receipt of ₹ 62 lakhs, no interference is called for, since estimation of income could not give rise to any substantial question of law. 8. In support of his contentions, the counsel relied on several decisions, reference to which we may make at slightly later stage. 9. Having heard the learned counsel for the parties and having perused the orders under consideration, what emerges is that the findings arrived at by the Assessing Officer that the respondent partnership firm received on money of ₹ 62 lakhs during the block period for sale of the flats, is not seriously in dispute. The Tribunal confirmed such findings arrived at by the Assessing Officer. However, the Tribunal did not permit the revenue to collect the tax on the entire receipt believing the it was only the income embedded in such receipt which can be subjected to tax. 10. As pointed out by the counsel for the respondent, this Court in the case of Commissioner of Income Tax v. President Industries, reported in (2002) 258 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to show that there was any unexplained investment made by the assessee which was reflected by the alleged undisclosed sales, the finding of the Tribunal that only the gross profit on the said amount can be brought to tax does not call for any interference. 12. Counsel also relied on the decision in the case of Commissioner of Income Tax v. Samir Synthetics Mill, reported in (2010) 326 ITR 410, wherein the High Court confirmed the view of the Tribunal accepting only the profit of unaccounted sale for the purpose of collecting tax. 13. Our attention was also drawn to the decision of the M. P. High Court in the case of Man Mohan Sadani v. Commissioner of Income Tax, reported in (2008) 304 ITR 52, wherein referring to and relying upon the decision of this Court in the case of Commissioner of Income Tax v. President Industries (supra) and other decisions of other High Courts, the M. P. High Court had also taken a similar view. It was observed that entire sale proceeds of the assessee should not be added in his income and that the Tribunal has erred in doing so. 14. We may recall that the Tribunal, in the impugned judgement, relied on its previous judgement in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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