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2015 (11) TMI 1271 - AT - Income TaxAccrual of income - income of the assessee firm as business profit of the assessee firm made by the assessing officer by estimating profit @15% on 30% of the total cost of work-in-progress - CIT(A) deleted the addition - Held that:- The assessee firm has undertaken development of the project Neptune Infotech IT Park during the assessment year 2009-10. The assessee firm has to receive 58% of the area after construction while 42% of the constructed area is to be given to the owners of the land as per agreement with the owners of the land. The assessee firm has spent 14.11 crores till 31.03.2009 and the assessee firm received ₹ 1.85 crores as deposit from its sister concern, Ritesh Exports which was later on refunded to the tune of ₹ 20 lacs in May 2009, while the balance of ₹ 1.65 crores was credited to the partners account. The assessee firm has not sold any unit till assessment year 2011-12 while the total WIP was 28.30 crores as on 31.03.2012 whereby 90% of the project was completed while there was no sale of unit till 31.03.2012. Since the assessee firm has not sold any portion of the constructed area, no hypothetical income can be brought to tax as in fact no real income has accrued to the assessee as per the ratio of decision of Hon’ble Supreme Court in the case of CIT v. Bokaro Steel Ltd. (1998 (12) TMI 4 - SUPREME Court) No infirmity in the order of the CIT(A) qua this issue and upheld the same. Hence, the additions of ₹ 63,52,000.00 made to income of the assessee firm as business profit of the assessee firm made by the assessing officer by estimating profit @15% on 30% of the total cost of work-in-progress is hereby deleted. - Decided in favour of assessee.
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