TMI Blog2015 (8) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... business or, as the case may be. In the instant case, admittedly, the assessee had not maintained books of accounts. The assessee is a doctor by profession, his father and brother are involved in the real estate business. For the last so many years, the Department has accepted the net profit at 8% on the total turnover of the company M/s. Skytop Builders Pvt. Ltd. Accordingly, the Appellate Authority as well as the Tribunal accepted the contention of the assessee and taken 8% of the total turnover as the income. The Assessing Authority during the course of assessment proceedings admitted the f act that the assessee has entered into an agreement and issued power of attorney to Sri.S.N.Krishnaiah Setty for marketing the sites formed in 6 acres of land. In respect of remaining 2 acres of land, the dispute is pending before the Arbitrator. Such being the case, the Assessing Authority ought to have taken the income from 6 acres of land. We find no infirmity or irregularity in the finding arrived at by the First Appellate Authority as well as the Tribunal. The appellants have not made out a case to interfere with the order passed by the Tribunal. - Decided in favour of assessee. - I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even as on date and the following works are pending. i. Formation of two roads ii. Water supply and sanitary works iii. Electricity sanction and connections iv. Overhead water tank v. Statutory payments to City Municipal Corporation by way of betterment charges. As the layout is still not fit for residential use and pending completion the assessee will offer income from layout business on completion of the same 3. Assessee is the son of Sri.C.V.L. Sastry and is also one of the partners of C.V.L. Sastry Group. The father and Sri.B.L.Nagendra Prasad, brother of the assesse e were carrying on Real Estate business in the name and style M/s. Skytop Builders Pvt. Ltd. A search was conducted under Section 132 of the Act on 26-11-2002 in the office premises of the Skytop Builders Pvt. Ltd. and residential premises of the assessee. On the basis of some documents found during search, a notice was issued to the assessee under Section 158BC on 28-10-2003 calling upon the assessee to file return for the block period from 01-04-1996 to 26-11-2002. In response to the said notice, the assessee filed ret urn of income declaring NIL undisclosed income on 11-12-2003. In purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon to file his objections. The assessee filed his objections to the Draft Assessment. After considering the objections, the Assessing Authority concluded the assessment and called upon the assessee to pay tax on the said amount, by its order dated 30-11-2004. 4. The assessee being aggrieved by the order dated 30.11.2014 passed by the Assessing Authority prefer red an appeal before the First Appellate Authority contending that the order of assessment is contrary to law and the Assessing Officer is not justified in determining the undisclosed income of ₹ 42,17,430/ - for the block period from 01-04-1996 to 26-11-2002. The entire transaction has been reflected to the Department. The facts of the case has not been disputed by the Assessing Officer, thus the sum determined does not constitute the undisclosed income. The Assessing Officer is not justified in assessing income contrary to the method of accounting followed by the assessee. The assessee clearly stated that he has not maintained the books of accounts. Along with the returns, the assessee has clearly disclosed that the assessee will offer the income from the real estate business on completion of the layout. For so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sale consideration when the seized material found during course of search reflected the actual expenditure incurred by the assessee and consequently recorded a perverse finding? 2. Whether the Appellate Authorities were correct in directing the Assessing Officer to allow the expenditure incurred towards 8 acres for development, when the Assessing Officer has taken into consideration the land developed in respect of 6 acres only as contended by the assessee? 7. We have heard Sri.Jeevan J Neeralagi, learned counsel appearing for the appellants and Sri. A. Shankar, learned counsel appearing for the respondent. 8. The records clearly disclose that the respondent - assessee is a Doctor by profession. He has been filing the income tax return every year disclosing the income from his profession and also the salary he was getting from Bhagawan Mahaveer Jain Hospital. During the assessment year 2002-03 along with the return, the assessee had filed a note with regard to purchase of 8 acres of land in the year 1996-97. The father an d brother of assessee are in the Real Estate business . Initially the assessee entered into an agreement with the HMT Employees Co-operative House ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not 8 acres of land. The cost of 6 acres of land is ₹ 1,74,40,550/- instead of ₹ 2,25,01,050/-. Normally, in the real estate business, the net prof it would be taken at the rate of 8%. Hence, the Appellate Authority, taking into consideration the net profit at 8% on the total amount of income arrived at undisclosed income of ₹ 13,95,240/- as against ₹ 42,17,430/- assessed by the Assessing Officer. Accordingly modified the order passed by the Assessing Authority and the said order was confirmed by the Tribunal after re- examining the matter afresh. The finding recorded by the First Appellate Authority as well as the Tribunal is purely a question of fact. The Assessing Officer having accepted the fact that the agreement entered with S.N.Krishnaiah Setty is only in respect of 6 acres of land, while assessing the undisclosed income, had taken into consideration the entire 8 acres of land , which is contrary to law. In the real estate business the department had accepted the net profit of 8% on the turnover for the last so many years in respect of the M/s.Skytop Builders Pvt.Ltd. The same benefit was extended in case of assessee also. Section 44-AD of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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