9911796707
TMI Blog2021 (7) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... Act") relevant to the Assessment Year 2008-2009. 2. The assessee has raised the following ground of appeal: 1. The learned Commissioner of Income Tax (Appeals) - I!, Baroda ( hereinafter referred to as the "CIT(A)") erred in fact and in law in confirming the action of Deputy Commissioner of Income Tax Circle-2(2), Baroda ( hereinafter referred to as "the AO") in rejecting the books of accounts without pointing out any defects in the same. 2. The learned CIT(A) erred in fact and in law in confirming the action of AO in estimating Gross Profit @ 30% from residential units and 40% in case of Commercial units thereby making a total addition of Rs. 10,83,700/-. 3. The learned CIT(A) erred in fact and in law in confirming the action of AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77.47 only. Likewise the cost shown by the assessee including the land with respect to the commercial project stands at Rs. 751.06 square feet and selling rate stands at Rs. 1,175.69 per square feet. As per the AO the cost of construction shown by the assessee with respect to the commercial projects which is higher than the residential project is not satisfactory. It is for the reason that the assessee has to provide several amenities with respect to the residential projects whereas no such amenity is required with respect to commercial projects. As such the assessee with respect to commercial projects has to provide 3 walls with shutter. Therefore the AO was of the view that the assessee has shown higher cost with respect to the commercia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, is without any basis. The Assessing Officer has made the estimation of profit on the basis of assessee's own sister concern which is building projects in almost same vicinity. Appellant has not been able to demonstrate in any manner that how the profit rate in his case should be lower than the neighboring projects. The assessee was asked for the explanation why the profit in the case where claim u/s. 80 18(10) is higher rate of profit as compared to the project undertaken as shown 23.47% in the case of residential projects and 36.12% in the case commercial project The only argument of the assesses is that it is due to differential rate of land of the project under taken and different projects undertaken in which deduction u/s. 80 IB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales of Rs. 86,04,400}. Considering the total facts, it is held that the action of the Assessing Officer does not call for any interference and the addition made by him is confirmed. 6. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 7. The learned AR before us filed a paper book running from pages 1 to 102 and submitted that the assessee during the assessment proceedings has produced audited financial statements, books of accounts, bills, vouchers, cash book, ledger accounts and the bank book which were verified by the AO on test check basis. Accordingly the learned AR contended that the question of estimating the profit does not arise without rejecting the books of accounts. Accordingly the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has made the addition after recording the finding that the assessee has shown lesser profit with respect to its residential project in comparison to the project of its sister concern which was eligible for deduction under section 80 IB(10) of the Act. Likewise, the AO made the addition with respect to its commercial projects on the reasoning that the assessee has declared higher cost in the commercial project then the residential project. The view of the AO was based on the reasoning that there was no amenity to be provided with respect to commercial projects. 9.3 Now the question arises whether the basis adopted by the AO for estimating the profit is sustainable in the eyes of law. The answer stands in negative. It is because the book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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