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2013 (10) TMI 752 - AT - Income TaxAssessment done outside the search material – Held that:- Scope of assessment remains limited to the search material and other issues not considered at the time of making the assessment u/s 143(3) of the Act - The company is represented through its Directors, therefore, material found at the residence of the Director is relevant and has to be considered for making the assessments u/s 153A – Decided in favor of Revenue. Disallowance of commission paid out of books of accounts – Applicability of section 69C of the Income Tax Act - Amount paid for commission during the year is less than the amount of bills of commission seized by the department at the time of search and therefore an addition of difference amount was made by the AO – Held that:- CIT (A) has granted part relief by deleting the addition of Rs.2,72,21,668/- - There was mistake in addition by way of duplication of same amount on account of various seized papers. There was also overlapping of addition among various financial years - No fresh evidence was filed. Assessing Officer had failed to consider the seized material in its entirety - Assessee has failed to explain the reasonable explanation with regard to the commission, therefore, confirmed the order of Commissioner(A). The issue of estimation of the profit by Revenue Authorities - Assessing Officer has not made any addition but estimated the profits - The assessee has recognized the sales of the plot when the possession of the plot is transferred to the customer and full consideration for the plot had been received. The assessee was following the project completion method which has been accepted by the department in the earlier years – Held that:- The Assessing Officer adopted percentage completion method while assessee is adopting project completion method - The plots are being sold and the payment is being received within a period of 45 days to six months. The assessee is adopting project completion method regularly. The only presumption of the Assessing Officer is differing the payment of taxes and on that basis, the Assessing Officer has adopted the percentage completion method - There was no sufficient material with the Assessing Officer which could establish that the assessee was differing the payment of taxes by adopting the project completion method. Assessee was consistently following this method which is a recognized method of accounting income in the business of real estate development – Decided against the Revenue.
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