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2018 (9) TMI 471 - AT - Income TaxSuppressed Income on sale of plots - sum quantified by the AD on the basis of seized material as "Suppressed Turnover" - Held that:- AO has adopted the value declared in the agreement of sale for registration purpose and not accepted the turnover declared by the assessee in the return of income. Assessee has filed return of income declaring total turnover of sale and contract receipts to the extent of ₹ 3.77 crores and paid the due tax. The turnover already declared by the assessee as per the return of income should be taken as declared turnover. Therefore, we are in agreement with the submissions of AR that the suppressed turnover should be the difference between the turnover found in the document seized and the turnover declared in the return of income i.e. to the extent of ₹ 5,11,00,000/-. Hence, ground raised by the assessee in this regard is allowed. Estimation of income in this line of business - CIT-A restricting the income at 40% of the undisclosed receipts without giving any factual basis which could justify the deduction of 60% allowed against such suppressed receipts - Held that:- We are in agreement with the CIT(A) that only income should be estimated and not the whole suppressed turnover as income - income estimation should be realistic and based on the trend in the industry - the income has to be realistic and appropriate to the kind of business of assessee. As noted, assessee has declared only 5.12% of the declared turnover as profit. The coordinate bench has opined that in the general scenario income is estimated at 12.5% in the case of big contracts. In the interest of justice and fairness to both the parties, in our considered view, 10% is reasonable and in line with the Villa Projects in the real estate industry. Accordingly, we direct the AO to estimate income @ 10% of the undisclosed turnover. Accordingly, ground raised by the assessee is partly allowed. Addition made on account of unexplained investment in land - addition in an assessment u/s 143(3) rws 153C without reference to any seized material - Held that:- Since no incriminating material was unearthed during the search regarding the purchase of the above land, no addition could have been made to the income already assessed u/s 143(3) of the Act, as held by the Hon’ble Delhi High Court in the case of CIT Vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT]. Even the CIT(A) held that when the land is reflected in the balance sheet, which forms a part of the return of income filed by the assessee, the sources are self-evident. He further held that neither does the assessment record show that this issue was even raised and confronted to the assessee during the assessment proceedings. We, therefore, uphold the order of CIT(A) on this issue and dismiss the grounds raised by the revenue in this regard.
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