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TMI Blog2015 (6) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure u/s 69C - CIT(A) delete the addition - Held that:- the profit and loss accounts found at the time of survey is only an estimated profit and loss account in which projected profit is worked out which the assessee expected to earn on the completion of the project. From the profit & loss account found at the time of survey, we find that on income side there was a credit of ₹ 5,63,27,300/- with the narration “contract work income”. The assessee is not doing any contract work, but this amount was the sale consideration which the assessee was expected to receive on the execution of sale deed of the flats booked till the date of survey. At the expenditure side, there is no debit for the value of the land or the opening work-in-progress. Considering the totality of these facts as well as the factual finding recorded by the CIT(A), we are of the opinion that the CIT(A) was fully justified in holding that in the absence of any corroborative evidences indicating the fact that assessee actually incurred more expenditure than what was shown in the books of accounts, no addition u/s 69C can be made. We, therefore, uphold the order of the CIT(A) with regard - Decided against rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und Nos. 1, 2 3 of the Revenue s appeal read as under :- 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of ₹ 2,94,17,251/- made by the A.O. on account of suppression of profit despite the fact that the said addition was made on the basis of the impounded material impounded during the course of survey u/s 133A from the assessee premises. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of ₹ 29,70,895/- made by the A.O. u/ 69C on account of labour charges despite the fact that the said addition was made on the basis of the impounded material impounded during the course of survey u/s 133A from the assessee premises. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in accepting the plea of the assessee that the figures mentioned on page 110 of impounded book BF/7 are nothing but an estimate despite the fact that the book BF/7 was impounded just 3 days before from the closing of the F.Y. 2007-08 and the assessee failed to produce any substantive evidence before the A.O. regarding its claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imated profit loss account as claimed by the assessee before the Assessing Officer as well as CIT(A). He also stated that on the said paper, it is nowhere mentioned that it is an estimated profit loss account or projected profit loss account and not the real profit loss account. He, therefore, submitted that the Assessing Officer was fully justified in making the addition of net profit as disclosed by the Profit Loss account as on 28.03.2007. That the accounting year ended just 3 days after 28.03.2007 and therefore, there cannot be much change in the net profit. He, therefore, submitted that the addition made by the Assessing Officer as per Profit Loss account found at the time of survey was rightly made by the Assessing Officer and the same should be sustained. The ld. Departmental Representative further pointed out that as per Profit Loss account found at the time of survey, the labour payment was ₹ 98,19,829/- while in the audited Profit Loss account filed alongwith return of income, the labour payment disclosed was only ₹ 68,48,934/-. Obviously, the balance labour payment was not recorded by the assessee in the books of accounts. Thus, the same was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since during the year under consideration, the project was in progress, the question of determination of income from the said project could not arose. Therefore, the Profit Loss account prepared till a particular date was only rough/estimated/projected Profit Loss account. The figure of the profit in the said Profit Loss account is near about the profit which was actually earned by the assessee from this project. He, therefore, submitted that merely because the assessee prepared some estimated/projected Profit Loss account till a particular date in the year under consideration, income from the project cannot be assessed. 9. With regard to labour payment, he explained that the labour payment mentioned in the paper was also estimated/projected one, which the assessee was supposed to incur on the completion of the project. He further submitted that except the loose paper, no corroborative evidence was found with regard to incurring of any labour payment over and above what was debited in the books of account. That the labour payment debited in the books of accounts is duly supported by bills and vouchers of the petty labour contractors. The complete details of the labour pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deed was executed. From these facts, it is evident that the project under consideration was far from completion during the accounting year relevant to assessment year under consideration. It was also pointed out by the ld. Counsel that the project was actually completed in the previous year relevant to Assessment Year 2009-10 in which the income from the same project was offered. The assessment for Assessment Year 2009-10 is completed u/s 143(3) and copy of the assessment order is placed on record. These facts, stated by the ld. Counsel, have not been controverted before us at the time of hearing. Considering the totality of these facts, we have no hesitation to hold that the income from the project under consideration during the year under consideration was not assessable in this year, because the project was not completed. Once the income is not assessable, the question of determination of quantum of income from the said project is only academic. In view of above, we do not find any merit in Ground No.1 of the Revenue s appeal and the same is rejected. 11. So far as the difference between the labour payment mentioned in the profit loss account found at the time of surv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome . The assessee is not doing any contract work, but this amount was the sale consideration which the assessee was expected to receive on the execution of sale deed of the flats booked till the date of survey. At the expenditure side, there is no debit for the value of the land or the opening work-in-progress. Considering the totality of these facts as well as the factual finding recorded by the CIT(A), we are of the opinion that the CIT(A) was fully justified in holding that in the absence of any corroborative evidences indicating the fact that assessee actually incurred more expenditure than what was shown in the books of accounts, no addition u/s 69C can be made. We, therefore, uphold the order of the CIT(A) with regard to Ground Nos. 2 3 of the Revenue s appeal and thus, these grounds of Revenue are rejected. 13. Ground No.4 of the Revenue s appeal reads as under:- 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of ₹ 2,57,358/- made by the A.O. after disallowing the transportation exp. despite the fact that the assessee failed to produce any substantive evidence in support of these exp. and thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue s appeal reads as under:- 5. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of ₹ 4,41,28,000/- made by the A.O. on account of unexplained investment in land despite the fact that the addition was made on the basis of the loan documents in possession of State Bank of Mysore and the valuation made by the bank was very well accepted by the assessee to avail the loan facility. 17. The relevant facts relating to Ground No.5, as given by the Assessing Officer in his order, read as under:- 6.1 The bank has mortgaged the open plot of land and as per their valuation, the value of the open plot of land is of ₹ 448.59 lacs whereas in the books of accounts the purchase cost of land is of ₹ 7,31,000/-. The assessee was issued show cause which is reproduced as under: As per the copy of sale deed of /and in question dated 16.2.2006, you have purchased the lend admeasuring 6523 Sq, mtrs. at Revenue Survey No. 112 of Village Singanpore, T.P. 26, Final Plot No.50/3, for ₹ 7,31,000/-. From the copy of the sale deed, it is also found that the same is registered at Sr. No..1830 of Katar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, purchasing of land admeasuring 6523 sq. rnt on 16.2.2006 for ₹ 7,31,000/- is not believable. It is also found that the assessee has constructed residential towers/complex on it. As per local news paper Divya Bhaskar dated 1.6.2008, the market price of a small hut in slums of Surat was between ₹ 3 lakhs to ₹ 7 lakhs and the price of shop at ₹ 8.5 lakhs (see Annexure'A'). Therefore, the value of purchase of land admeasuring 6523 sq. mts. For ₹ 7,31,000/- is apparently not justified. To substantiate its claim; i) The assesses did not enclose copy of so called jantri as per the jantri rate of the land which was purchased by it for mere consideration of ₹ 7,31,000/-. ii) The assessee did not furnish the valuation report of approved registered valuer. iii)The assessee has not adduced any document to prove that the work of leveling, fencing etc. was carried out by them. Even if it is assumed that the work of leveling, fencing etc. was carried out by the assessee, it is difficult to believe that the market value of the open plot of land can rise by as high as 6136%. 6.5 Besides, the assessee itself admitted that the financial, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06-07. We, therefore, hold that the issue of addition u/s 69 in respect of purchase of land as on 16.02.2006 cannot be considered in Assessment Year 2007-08. Therefore, any addition for alleged understatement of purchase price of plot purchased on 16.02.2006 cannot be sustained in Assessment Year 2007-08. With this remark, we hold that the deletion of addition by the CIT(A) for unexplained investment in the purchase of plot was fully justified and therefore, his order on this point is sustained. Thus, Ground No.5 of the Revenue s appeal is rejected 20. Ground No.6 of the Revenue s appeal reads as under:- 6. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in allowing the claim of the assessee regarding deduction u/s 80IB of the Act despite the fact that the A.O. brought many evidences on record that assessee has violated the provisions of the Act thus making him ineligible for the claim. 21. After considering the arguments of both the sides and facts of the case, we find that this ground raised by the Revenue is misconceived. The CIT(A) has not given any finding that the assessee is entitled to deduction u/s 80IB. The relevant findin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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