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TMI Blog2020 (9) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... or the consideration of this Court : "(i) "Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is right in upholding the decision of Ld. CIT(A) deleting the addition of Rs. 3,38,44,000/- made by the AO estimating the income @25%? (ii) Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is right in deleting the assessee's income as estimated by the AO on the advances received from its customers without appreciating that the assessee has worked as a contractor only and therefore revised provisions of AS-7 would apply for estimation of matching income on proportionate completion method?" 3. It appears from the materials on record that the original assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,53,76,000/- as business profit of the assessee for the year under consideration. Penalty proceedings u/s 271[1][c] of the I.T. Act are initiated for furnishing inaccurate particulars of income and concealment of income." 7. The CIT (A) while partly allowing the Appeal preferred by the assessee against the assessment order observed as under : "6.2.1. The Grounds of appeal-Ground No.2 pertains to making addition of Rs. 3,38,44,000/- by estimating the income of the assessee firm at 25% on the advance received by the assessee from its customer amounting to Rs. 13,53,76,000/- without appreciating the facts and circumstances of the case in right perspective. The AO reopened the case u/s 147 of the Act as the AO noticed that the appellant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der construction a very limited construction work was carried out of Rs. 4,39,20,677/- which included the cost of the land of Rs. 3,44,04,150/-. It was further contended that no sale deed was executed for the property in the relevant assessment year. 6.2.2. On the perusal of the details, it is observed that during the relevant assessment year a very limited construction work was carried out as per the audited accounts work in progress of Rs. 4,39,20,677/- wherein the land cost was Rs. 3,44,04,1.50/- and the construction expenses was Rs. 95,16,527/-. The project was under construction upto 2015-16 wherein the construction expenses in each financial year were as following: Financial Years Cost of Construction (Rs) 2009-10 2784218 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Total 18954 11,76,70,000 6.2.4. From the above facts it is evident that the transfer of the legal title was the condition precedent to the buyer. No registered sale deed was executed in the year under consideration and the amount of the total area sold was also reduced from 34720 to 18954 sq, ft. for the total consideration of Rs. 11,76,70,000/- instead of the original amount of Rs. 16,73,50,400/-. The AO has arbitrarily determind the profit @25% of Rs. 13,53,76,000/-without any basis or material in possession. The AO's presumptive profit of Rs. 3,38,44,000/- cannot be sustained for the reasons discussed above and therefore, the ground of appeal are being allowed. 7. The Tribunal after referring to the aforesaid findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,76,000/- as the business profit of the assessee for the year. No reason worth the name has been assigned by the AO in this regard. This exactly weighed with the CIT (A) while partly allowing the appeal of the assessee. The Tribunal ultimately concurred with the findings recorded by the CIT(A) and dismissed the appeal preferred by the Revenue. We are at one with the Tribunal in taking the view that the AO wrongly determined the profit at the rate of 25%, without any basis or credible material.
9. In such circumstances referred to above, we are of the view that the questions of law as proposed by the Revenue cannot be termed as substantial questions of law.
10. In the result, this Tax Appeal fails and is hereby dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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