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2021 (5) TMI 714 - AT - Income TaxUndisclosed income as per disallowance on account of provisions - assessee was selected for limited scrutiny through CASS - CIT-A restricted the addition - addition on basis on a paper (loose sheet) found in possession one of the partners in the assessee firm during the course of search proceedings - HELD THAT:- The absence of the above two steps shows that he made the addition causally and without actually going into the depth of the issue and reaching conclusive findings through proper examination of evidences & persons. The 'Skelton' flats' rate is coming to ₹ 3200 to ₹ 3400/- per square feet itself while the 'completed' or 'fully furnished' flat is sold @ 4967/- which difference if not real, would involve an adverse finding from both the service tax department as well as the SRO for tax avoidance if some flats of same measurement are sold at different rates to 'accommodate' cash proceeds. No adverse findings have been gathered by the A.O. from these two departments in respect of the assessee's project. The service tax ledger account shows flat wise tax paid from 2011 to 2016 even on individual payments credited. Hence, just on the basis of one loose sheet of paper with miscellaneous, unconfirmed 86 uncorroborated notings, to make an addition is not fair as this would also mean a suppressed sale of of about 25% against the shown project revenue and jack up the profit to 30% (5.43% already shows) which appears to be astronomical as well as impractical on a single project. The addition dwells more in the realm of presumption than real. It is clear that the A.O.'s examination of the Annexure AS-2 was very casual and not based either on the possible further enquiries or workings or on the appreciation of statements and change in the status of several flats & owners. He has just made a one sided assessment based only on the loose sheet without bringing on record the other corroborative evidences. The addition made by the AO based on the loose paper, which is not conclusive evidence and, therefore, the same is not sufficient to make the addition. We found that the ld. CIT(A) has passed a speaking and reasoned order discussing all the details of the case of the assessee, therefore, we do not find any reason to interfere into or deviate from the findings so recorded by the ld. CIT(A) and we uphold the same. This ground of the Revenue’s appeal is dismissed.
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