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TMI Blog2013 (11) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... takes in computation of interest chargeable under the above mentioned sections. In view of the above, the assessee-firm is at liberty to move the appropriate authority under the Act with a request to rectify the computation of interest chargeable, if any. The remaining grounds [ground Nos.3 & 4] relate to a solitary issue, namely: "that the CIT (A) erred in adopting the net profit @ 25% as against 18.3% declared by the assessee, thereby confirming an addition of Rs.32.89 lakhs as income from 'Pam Arcade' which was only on estimation as against declared income of Rs.90 lakhs" 3. Though the Revenue has, in its grounds of Memorandum, raised five grounds, the substance of its grievance is confined to a lone issue, namely:- "that the CIT (A) erred in adopting the net profit at 25% on the sale proceeds from 'Pan Arcade' as against 45.7% adopted by the AO." 4. As the issues raised by the rival parties being inter- linked and pertaining to the same assessee, for the sake of convenience, they were heard, considered together and disposed of in this consolidated order. 5. We shall now proceed to take up the assessee's appeal for adjudication as under: I. ITA No.968/B/2011 - By the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of profit not going by the working as given in page 6 of the assessment order. This is more so because even the total consideration is shared in the same ratio and nowhere the total working of profit with its detailed cost break-ups are available in the seized documents. Since much of the cost had been incurred by the three partners separately at the time of purchase of the land, construction of the commercial complex and the other variable and fixed expenses which has gone into different years, the cost sharing is also not indicated in the seized document. It is also not clear as to whether the basic actual cost of the land, interest liability, fixed expenses, variable expenses and other incidental expenses have been allocated in working out the above figure. Hence, it is held that a reasonable profit is to be arrived at based on the seized materials, the appellant's statements and the Department's findings. Hence, an attempt is made to work out the gross consideration based on the seized materials on the basis of the presumptions as found out about the rate at which shops in different floors are sold. Presumption 1: Seized material recorded in page 4 & 5 showed the total co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks out to adoption of net profit of 45.7% on the total turnover. The appellant's contention that the property was purchased for much higher price than what was recorded in the books also is to be taken into account though there is no proof available in the seized documents regarding the exact amount of money paid for the purchase of land. Neither of the two could be accepted as correct since in the light of acceptance of huge sum of money as unaccounted component on the sale of shops, 18.3% net profit on the total sale consideration is too low a percentage. For the same reason, adoption of net profit of 45.7% on the total sale proceeds is also too high. In view of the same, it is held that 25% of the total turnover of Rs.4,91,59,484/- could be considered to be reasonable profit and the AO is directed to adopt the profit figure of Rs.1,22,89,871/- in place of Rs.2,24,66,173/- adopted by the AO." 6. Aggrieved, the assessee has come up before us with the present appeal. During the course of hearing, the learned AR submitted that the CIT (A) erred in estimating the net profit @ 25% as against 18.3% declared by the assessee. It was, further, submitted that the assessee had already off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y pointed out by the CIT (A), it could not be ascertained the actual cost of the land, interest liability, fixed expenses, other incidental expenses have been allocated in working out the figures arrived at by the assessee as well as the AO. Considering the factual issue involved in the case, the CIT (A), had arrived at the gross sale proceeds at Rs.4,91,59,484/- as against the assessee's working of Rs.3.44 crores which was not supported by proper books of accounts. Taking into account the assessee's offer of net profit at Rs.90 lakhs which works out to 18.3% on a turnover of Rs.4.91 crores considered to be too low and that of the AO's working of Rs.2,24,66,173/- which comes to a net profit at 45.7% appeared to be on the higher side, the CIT (A) took a plausible view of 25% of the total turnover of Rs.4.91 crores. The CIT (A) has worked out the net profits on the basis of seized materials in course of search as it evident from the presumption drawn at pages 8 and 9 of the impugned order of the CIT (A). This working of the CIT (A) has not been contradicted by the learned AR with any documentary evidence. 7.2. We have also perused the findings of the earlier Bench of this Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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