TMI Blog2013 (8) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... Heard on the question of admission. 1. This appeal under section 260A of the Income Tax Act, 1961 has been filed by the CIT, Ujjain, against the order dt. 4-9-2012, passed by Tribunal Bench at Indore in IT(SS)A No. 112/Ind./2012, for the assessment year 2007-08, wherein the learned Tribunal relying on the decision in the matter of Gujarat High Court, directed the assessing officers to take 25 per cent of sale proceeds received in cash as assessees income rather than making addition of entire amount of sale proceeds received in cash and partly allowed the appeal. 2. On the last date, we directed the learned senior counsel for the appellant to verify the decision of Gujarat High Court in case of Dy. CIT v. Panna Corporation (2012) 74 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt or unaccounted cash receipt, what can be brought to tax is the profit embedded in such receipts and not the entire receipts themselves. If that be the legal position, what should be estimated as a reasonable profit out of such receipt, must bear an element of estimation. In view of the legal position that not the entire receipts, but the profit element embedded in such receipts can be brought to tax, in our view, no interference is called for in the decision of the Tribunal accepting such element of profit at ₹ 26 lacs out of total undisclosed receipt of ₹ 62 lakh. In other words, we accept the legal proposition, the Tribunal accepting ₹ 26 lacs disclosed by the assessee as profit out of total undisclosed recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were found from his residence, proceeding under section 153C read with section 153A was initiated in the assessee company. The said document contained the particulars of sale of plot such as plot numbers, money received through cheque and on-money received in cash. The amounts received by way of cheques only were recorded in the books of account of the assessee as sale consideration on the dates mentioned on the said page. Accordingly, addition was made in respect of cash entries found noted on the loose sheets. The defence of the assessee before the assessing officer was that ownership over those documents was of the plot owners and not of the assessee company. The seized papers do not carry any signatures of the directors of the staff of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeds cannot be regarded as profit of the assessee, the net profit rate had to be adopted for the purpose of addition. Accordingly, Hon'ble Madhya Pradesh High Court confirmed the action of the Tribunal for conclusion that entire sale proceeds could not be included in the total income of the assessee and only the amount of net profit should be added. Similarly, Hon'ble Gujarat High Court in the case of CIT v. Saint Synthetics Mill (2010) 326 ITR 410 (Guj), held that addition was to be made not in respect of sale consideration but only in respect of the profits. In case of CIT v. President Industries (2002) 258 ITR 654 (Guj), Hon'ble Gujarat High Court held that where unaccounted sales were revealed during course of survey, enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h element of profit at ₹ 26 lacs out of total undisclosed receipts of ₹ 62 lacs. In the instant case before us, the assessee was engaged in the business of real estate, wherein part of the amount of sale consideration was received through cheque and balance in cash and only cheque amount was entered in the regular books. The assessing officer added entire amount of sales received in cash in assessees income. It was submitted by the learned Authorized Representative that incriminating documents alleged to be found at the residence of the director indicating sales received in cash, did not bear any signature of the authorized person or the directors of the company. He further submitted that in the business of real estate, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proposition laid down by the jurisdictional High Court as well as other High Courts as discussed hereinabove and totality of facts and circumstances of the case, more particularly, keeping in view the nature of the assessees business of purchase and sale of real estate and flats, we direct the assessing officer to take 25 per cent of sale proceeds received in cash as assessees income rather than making addition of entire amount of sale proceeds received in cash. We direct accordingly. 9. Keeping in view the proposition of law laid down by the Gujarat High Court as well as Madhya Pradesh High Court and other High Courts and keeping in view the nature of assessees business of purchase and sale of real estate and flats, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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