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Asstt. Commissioner of Income Tax Versus M/s Mac Enterprises

2016 (6) TMI 554 - ITAT MUMBAI

Addition to surrendered income during the course of survey - sale of property - bifurcation of consideration into two assessment years - Held that:- The records before us reveals that the declaration was made for the entire project and since some shops and flats remained unsold during the assessment year 2007-08 and therefore some money for the flats was not received and therefore the income of ₹ 35 lakhs was credited in the books of the assessee as per the terms of declaration made by the .....

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he selling of flats and shops in that year. But if some stocks in the form of shops and flats remain to be sold then the same would be carried forward and the additional income qua those flats and shops as sold in the next year would be shown accordingly. Accordingly, the ld. CIT(A) further observed that the income of ₹ 90 lakhs was further spread over the period of 2 years and ₹ 35 lakhs was offered for tax in the assessment year 2007-08 and the balance addition income of ₹ 55 .....

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sq. ft in that year. We therefore after considering the facts and circumstances of the case and the order of first appellate authority are of the opinion that the assessee’s additional income of ₹ 90 lakhs was duly assessed and offered to tax in the assessment years 2007-08 and 2008-09 and therefore, the addition as made by the AO is wrong and unwarranted - Decided in favour of assessee - I.T.A. No. 5710/Mum/2011 - Dated:- 9-6-2016 - Shri Mahavir Singh, JM And Shri Rajesh Kumar, AM For t .....

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e records before us and hearing the ld DR. 3. Common issue raised in the all the grounds of appeal is with respect to the deletion of additions of ₹ 55 lakhs by the ld. CIT(A) which was added to the total income of the assessee by the AO on the ground that the assessee surrendered ₹ 90.00 Lacs during the course of survey, however while filing the return of income only disclosed ₹ 35 lakhs and hence short return by ₹ 55 lakhs. 4. The facts in brief are that the assessee fi .....

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unt of cash money accepted at the time of sale of flats. The said disclosure was made over a period of two years i.e. assessment years 2006-07 and 2007-08 for an amount of ₹ 15 lakhs and ₹ 90 lakhs for area sold of 13000 sq.ft and 35000 sq.ft respectively. The case was selected for scrutiny and the statutory notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. During the course of scrutiny assessment proceedings, the AO noticed that the assessee has cred .....

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t pursuant to the declaration made during the survey. The assessee while referring to the foot note to the declaration made during survey submitted that this declaration will be for the completion and sale of the entire project but in the case the flats/shops remained unsold then the profit will be declared in the next assessment year because money for sale of flats was not received for each and every flat. Therefore, the AO while rejecting the contention of the assessee, framed the assessment v .....

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as not received for each and every flat I reject the above contents of the note of the assessee. Because once a declaration for a particular year is declared it cannot be prolonged for any other assessment year on any reasons. A question arises why the assessee has shown area sold of 35000 Sq Feet in the AY. 2007-08 on the basis of which he has made declaration of ₹ 90,00,000/- to that specific assessment year. It is merely an admittance of the assessee due to unrecorded transactions found .....

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ding that no penal proceedings u/s.271 (1) (c) shall be initiated on the firm". When on the basis of such a commitment the declaration is made by the assessee, why on other grounds part of the declaration i.e. ₹ 35,00,000/-only is offered for taxation and not the whole declaration of ₹ 90,00,000/- Further on verification of Balance sheet liability side it is seen that the assessee has shown advances received against flats of ₹ 53,97,500/- During the survey action it was ob .....

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ble issue. Considering the above facts the additional income as offered in letter filed on 20/11/2006 is considered the declaration for the AY.2007-08 and additions of balance uncovered declaration of ₹ 55,00,000/is made to the income of the assessee. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) who after considering the submissions of the assessee gave relief to the assessee. Aggrieved by the decision of the ld.CIT(A), the revenue is in appeal be .....

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assessee declared this amount in respect of the entire project and while making the declaration the assessee appended a note in declaration which reads as under : This declaration will be for the completion and sale of the entire project till the A.Y. 2007-08, but in the case the flat/shop will remain unsold than the profit will be declared in next assessment year without tax because money for sale of flat was not received for each and every flat The records before us reveals that the declaratio .....

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