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2020 (4) TMI 433 - AT - Income TaxReopening of assessment u/s 147 - re-opening was done based on the report of the Valuation Officer - additional ground was not raised while filing of appeal - HELD THAT:- The contention that, Reference to DVO made when no proceeding pending and re-opening made is devoid of any merit and based on wrong and misleading facts and contrary to record. Additional ground is neither maintainable as no argument and justification is given and how it has come to be raised in second round of assessment proceedings which was carried out at the behest of Tribunal for supplying reasons for reopening of assessment only, Nor this grounds of appeal was taken before the AO, hence, it is not maintainable in law and also liable to be dismissed on merits due to facts as discussed above. - Additional grounds dismissed. Addition being difference between the value determined by the DVO - HELD THAT:- The assessee has failed to adduce any evidence of cost of construction before the DVO. The perusal of DVO report showed that the AO even try to stop the DVO for making inspection of property and it was done in the presence of Inspector of Department. Therefore, the objection relating to DVO Report is not correct hence, it is not acceptable. Further, seen that the construction was started from 1996-97 and reached finality in the A.Y. 1999-2000. The assessee has not shown any work in progress as no return for A.Y. 1996-97 to 1999-2000 has been ever filed. - As per the records, the assessee has shown project completion method, hence, the profit is liable to be taxed in the assessment year under consideration only , hence, we hold the same. In the Registered Valuer report, the assessee shown rate of construction at 325 per Sq. Ft. for the total construction area of 16980 sq. Ft. However, these figures are not supported by the books of accounts as the assessee failed to produce any books of accounts before the income-tax authorities as well as DVO. The assessee has not cooperated with DVO also nor filed any details. The assessee has not established its claim of cost by producing books of accounts before the AO. In such circumstances and non corporative attitude of the assessee, the AO could not do justice with the assessee. The assessee himself has total cost at ₹ 66,77,000 and expenses at ₹ 65,97,000 of which difference comes to ₹ 87,000 which is the net profit according to the assessee. - Same is also not disclosed as no return of income was filed. Similarly, in such type of project where 21 flats have been constructed, it would be reasonable to adopt Net Profit Rate as applicable to construction business. It is settled law that entire receipts cannot be taxed. In the light of these facts, only net profit is required to be taxed not the entire receipts. Therefore, real income is only to be taxed. - it would meet the end of justice if 5% of net profit rate is to be applied to gross receipts - Decided partly in favor of assessee.
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