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2015 (8) TMI 1285 - HC - Income TaxEstimating the profit at 8% of the sale consideration - Appellate Authorities directing the Assessing Officer to allow the expenditure incurred towards 8 acres for development, when the Assessing Officer has taken into consideration the land developed in respect of 6 acres - Held that:- The Assessing Officer having accepted the fact that the agreement entered with S.N.Krishnaiah Setty is only in respect of 6 acres of land, while assessing the undisclosed income, had taken into consideration the entire 8 acres of land , which is contrary to law. In the real estate business the department had accepted the net profit of 8% on the turnover for the last so many years in respect of the M/s.Skytop Builders Pvt.Ltd. The same benefit was extended in case of assessee also. Section 44-AD of the Act contemplates that in the case of an eligible assessee engaged in an eligible business, a sum equal to 8% of the total turnover or gross receipt of the assessee in the previous year on account of such business or, as the case may be. In the instant case, admittedly, the assessee had not maintained books of accounts. The assessee is a doctor by profession, his father and brother are involved in the real estate business. For the last so many years, the Department has accepted the net profit at 8% on the total turnover of the company M/s. Skytop Builders Pvt. Ltd. Accordingly, the Appellate Authority as well as the Tribunal accepted the contention of the assessee and taken 8% of the total turnover as the income. The Assessing Authority during the course of assessment proceedings admitted the f act that the assessee has entered into an agreement and issued power of attorney to Sri.S.N.Krishnaiah Setty for marketing the sites formed in 6 acres of land. In respect of remaining 2 acres of land, the dispute is pending before the Arbitrator. Such being the case, the Assessing Authority ought to have taken the income from 6 acres of land. We find no infirmity or irregularity in the finding arrived at by the First Appellate Authority as well as the Tribunal. The appellants have not made out a case to interfere with the order passed by the Tribunal. - Decided in favour of assessee.
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