TMI Blog2019 (8) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... 28-8-2019 - Shri Shamim Yahya, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : Shri M ilin Bakhai, A.R For the Respondent : Shri Rajeev Gubgotra, D.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(A)-50, Mumbai, dated 26.02.2016, which in turn arises from the order passed by the A.O under Sec. 271(1)(c) of the Income Tax Act, 1961 (for short Act‟), dated 27.09.2017 for A.Y. 2010-11. The assessee has assailed the impugned order on the following grounds of appeal before us: 1. The learned Commissioner of Income Tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeds in respect of flat sold during the year. ₹ 4,00,00,000/- 2. Addition towards profit under percentage completion method. ₹ 2,39,00,000/- 3. Disallowance of loan processing charges. ₹ 1,40,77,082/- Accordingly, the income of the assessee company was assessed at ₹ 8,45,04,190/-. 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after necessary deliberations deleted the addition of ₹ 4,00,00,000/- on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) before the CIT(A). However, the CIT(A) not finding favour with the contentions advanced by the assessee upheld the penalty of ₹ 25,55,610/- imposed by the A.O under Sec. 271(1)(c) of the Act. 6. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short A.R‟) for the assessee had submitted that the addition of ₹ 85,18,702/- as regards the profit in respect of the unsold area that was sustained by the CIT(A) (by adopting the average sale price at ₹ 28,808/-) while disposing off the quantum appeal of the assessee, vide his order dated 26.02.2016, had been deleted by the Tribunal vide its order viz. Dy. CIT, Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxman 601 (SC) had accepted the basis of valuation of inventories at lower of cost or market value and had also held that no profit could arise out of valuation of closing stock. Their Lordships held that valuation of unsold stock at the close of an accounting period is a necessary part of the process of determining the trading results of that period and can in no sense be regarded as the source of such profits. We find that the ld CITA by valuing unsold flats at the average of sale price Ld. CIT(A) had assessed profit attributable to unsold flats which is not permissible. Respectfully following the aforesaid decisions of Hon‟ble Supreme Court and applying the same to the facts of the instant case before us, we direct the Ld A.O. to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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