9911796707
TMI Blog2025 (1) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... onourable Ms. Justice Sonia Gokani) by order dated 21.02.2011 admitted the Tax Appeal on the following substantial questions of law. "A. Whether the Appellate Tribunal has correctly appreciated the facts on record so as to restrict the addition to Rs. 8,82,787/- as against addition of Rs. 4,82,938 worked out by the Assessing Officer in respect of undisclosed income from Shilpgram Scheme? B. Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the CIT (A) and thereby directing the Assessing Officer not to charge interest u/s. 158BFA(1) of the Act, when the delay was solely attributable to the assessee?" 3. At the outset, learned advocates for both the sides submitted that Question No. 1 is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er:- Cost of land as Worked out 9,53,83,887 Estimated collection from sale of 416520 sq. yds. @ 351/- as worked out by appellant 14,61,98,520 Less:-shown in books 80,00,000 Less:-Disclosed in books 6,73,73,421 8,73,83,887 7,88,25,099 Profit 58,01,124 Value of unsold plot of 38000 sq. yds. @ Rs. 330/- per sq. yd. Sale Price - Profit Margin Disallowance u/s. 40A(3) 1,25,40,000 18,19,912 9,31,85,011 9,31,85,011 We noted from the order of the CIT(A) that the CIT(A) has enhanced the sale consideration by Rs. 25,00,000/- which has not been disputed by the assessee. The AO has taken the sale considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mers from whom the land was purchased. Section 158BB clearly lays down that undisclosed income has to be computed on the basis of material found and seized during the course of search. There is no dispute that the AO has worked out the sale consideration on the basis of the seized document. Therefore, the cost of land has also to be worked out on the basis of seized document. This is an admitted fact that the CIT(A) has worked out the purchase cost of the land on the basis of seized material i.e. Annexure A/12, therefore, we do not find any illegality or infirmity in the order of the CIT(A) when he allowed the assessee the deduction of Rs. 8,73,83,887/- while determining the profit from Shilpgram Scheme. Thus, the ground taken by the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee be taken be taken to be 70% of the profit of the project. The CIT(A) has confirmed the profit in the hands of the assessee to the extent of Rs. 40,67,717/- being 70% of Rs. 58,01,124/-. Since the closing stock will get reduced in view of our finding given under para-7 of that order by Rs.45,40,000/-, the profit of the project will get reduced to Rs. 12,61,124/-, the assessee's share being 70% will come to Rs. 8,82,787/- and accordingly the addition of Rs. 40,67,717/- will get reduced to Rs. 8,82,787/-. In case the AO finds that the assessee has disclosed the income much more than Rs. 8,82,787/-, then the addition made will not be reduced below the income as the assessee has returned from Shilpgram scheme and the addition remain s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause the assessee cannot be regarded to have committed a default during that period. The learned DR, on the other hand, relied on the order of the AO. After considering the rival submissions, we are of the view that the assessee cannot be held responsible for the period during which he/she could not be allowed the seized material to compile the return. The block return could not have been filed by the assessee without getting the seized material. We accordingly direct the AO not to charge the interest u/s. 158BFA(1) for the period till the assessee was not provided with the photo copies of the seized materials. The interest should also not have been charged for the time which was given by the AO to the assessee for filing the return. Our ..... X X X X Extracts X X X X X X X X Extracts X X X X
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