TMI Blog2018 (6) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per INTURI RAMA RAO, AM : These are appeals filed by the assessee directed against the order of the learned Commissioner of Income-tax (Appeals),[ CIT(A) ] Mysore, dated 31/08/2017 for the assessment years 2010-11 2011-12. During the course of hearing of Stay Petition Nos.143 144/Bang/2018 filed by the assessee, we felt that the issue involved in the present appeals is short requiring remand to the ld.CIT(A). Therefore, we had taken up the appeals for disposal. 2. The assessee raised the following grounds of appeal: 1. The order of the 1st appellate authority dismissing all the grounds raised by Appellant is illegal, arbitrary, whimsical and without application of mind to the facts of the case. 2. The Appellate Authority ought to have appreciated that there is no due service of notice by the Respondent Assessing Officer before concluding the best judgment assessment under Section 144 of the Income Tax Act. 3. The 1st Appellate Authority ought to have appreciated that the notice issued under section 142 (1) of the Act was returned by the postal authorities with the comment 'no such office' and therefore there is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have failed to appreciate that the appellant has failed to commence the business and to carry on with the business operations and therefore Appellant did not succeed in its business of real estate, resulting in multiplicity of litigations including the one relating to the layout formation.Huge monies have been returned / refunded to the customers of the appellant owing to the orders passed by the District Consumer Disputes Redressal Forums. This fact has never been appreciated by the authorities below. ii. The authorities below erred in considering only the bank deposits for the purposes of determining the taxable income ignoring the payouts made by the appellant towards the purchase of land, conversion charges, formation of layout, etc apart from other general costs such as labour, machinery, administrative costs, etc. iii. The Appellant followed the project. completion method of accounting and did not offer any income to tax during the assessment years in question since rip project was completed. Appellant had not competed even 25% of the project during the assessment years in question. iv. In addition, the project in question ran into litigations on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appreciating that there was no taxable income that was liable to be disclosed to tax by the appellant during the 2 assessment years in question since the Appellant had not executed any sale deeds favouring any customers as the developmental activities were in progress. viii. Until and unless a sale deed is executed by the appellant, the advance amount received from the intending purchasers cannot be considered as income chargeable to tax and accordingly Appellant did not offer to tax the advance amounts received. Given the fact situation, the authorities below erred in holding that the entire deposits received by the s of the appellant are liable to be taxed under the provision of the Income Tax Act, without recording a finding that the Appellant has executed the sale deeds favouring the intending purchasers during the assessment years 2010-11 and 2011- 12. 6. The learned assessing authority refused to furnish the reasons for recording supporting the reopening of the assessment under section 148 in spite of a specific request from the appellant and therefore the reassessment order is void. i. The authorities below erred in not providing the reasons recorded for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and development of the barren land into sites in a residential layout. It is impossible for any developer to sell the sites to the prospective purchasers without carrying out the aforesaid basic minimum requirements. These facts have been conveniently ignored by the learned assessing authority as well as the 1st appellate authority. 9. The alleged addition of ₹ 3,75,70,374/- as undisclosed income made by the assessing Officer is unsustainable, arbitrary and deserves to be deleted. i. The learned assessing officer did not bring on record under which provision the deposit amounts were added as alleged income of the appellant and addition made is vague, based on mere suspicion. ii. The learned CIT appeals erred in holding that the assessed income of the appellant constituted unexplained investment that were not recorded in the books of accounts and that the explanation offered by the appellant about the nature and sources of such deposits was not satisfactory in the opinion of the assessing officer, when no such findings are forthcoming from the assessment order. The lacuna in the assessment order in passing a judicious order cannot be filled in by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n called for before the AO. The said information had not been considered by the AO in the assessment order and brought the entire cash deposits in bank accounts to tax. Even the ld.CIT(A) had failed to discharge his judicial function to consider this material while affirming the action of the AO. 4. We heard rival submissions and perused the material on record. Undisputedly, the appellant had filed information before the AO in support of explaining sources for cash deposits in bank accounts. There is nothing in the assessment order or in the order of the ld.CIT(A) indicating that these material was considered by the AO/ld.CIT(A). Therefore, it is a fit case to remand the mater back to the file of the ld.CIT(A) for de novo adjudication considering information/material filed by the appellant before the AO on 30/03/2015 and to pass the order after giving due opportunity of hearing to the appellant. 5. In the result, the appeals filed by the assessee are allowed for statistical purposes. 6. Since the appeals giving rise to stay petitions have been disposed of, the stay petitions become infructuous and are accordingly disposed. Order pronounced in the open court on 08th J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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