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2024 (2) TMI 926 - AT - Income TaxUnaccounted income on sale of plots in cash - estimation of Net profit - estimation on the on- money received by the assessee - assessee submitted that the entire on-money is taxed by the Ld. Assessing Officer whereas the profit element at 8% embedded therein is only taxable in the hands of the assessee HELD THAT:- Assessee company was incorporated on 01.04.2010 and developed residential 358 plots in Phase-I ranging from 500 to 1398 sq. yds. and 397 plots in Phase-II ranging from 150 to 300 sq.yds. Price of the plots are determined based on the improvements/growth of particular area are based on its infrastructure, development, public utilities, etc. Market value of the land and Jantry value differs from place to place. More unaccounted moneys are utilized on sale and development of lands/plots which are converted from Agricultural to Non- Agricultural purpose. In such cases it is impossible to estimate the net profit unless the method adopted in manufacturing activities. Therefore the claim of the assessee that net profit is to be adopted in the land development transactions, wherein on-money was received by the assessee is legally not tenable. Assessee failed to disclose the proper details of expenses, development charges, etc. before the lower authorities even in the second round also. Therefore the claim made by the assessee to adopt net profit method on the on-money received by it, in real estate transaction is hereby rejected and the case laws relied before us are clearly distinguishable, which are not relating to development of plots. Decided against assessee.
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