9911796707
TMI Blog2021 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant is bad and erroneous in law and against the facts and circumstances of the case. 2. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in holding that the appellant has not raised any objections for making assessment u/s. 147 of the Act therefore, cannot raise any ground on the jurisdiction. 3. That the learned Commissioner of Income Tax (Appeals) ought to have furnished the reasons recorded u/s. 148(2) of the Act. 4. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in holding that the appellant had earned a profit of Rs. 35,05,415/- in the business of development on the only ground that the appellant has agreed for the addition during the assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,03,29,370/- for assessment year 2011-12. Subsequently, the case was reopened by issuing notice under section 148 of the Act, on 29/11/2013. In response, assessee filed letter dated 11/02/2015 replying that original return filed by assessee may be treated as return in response to notice under section 148 of the Act. Subsequently, notice under section 143(2) was issued to assessee. 3. During the reassessment proceedings the Ld. AO noticed that the assessee declared net loss of Rs. 25,000 for year under consideration and 15% of investments as income for assessment year 2010-11 and 2012-13. As the assessee did not declare profit during the year, the Ld. AO worked out additional income of Rs. 35,30,415/- by considering 15% of the investment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised before the Ld. CIT(A), however it emanates from the order of assessment, and no new records needs to be verified in order to adjudicate. 10. He placed reliance on the decision of Hon'ble Supreme Court in case of CIT vs National Thermal Power Corporation Ltd., reported in 229 ITR 383 and Jute Corporation of India vs CIT reported in 187 ITR 688. It is also submitted that, these are consequential grounds and needs to be considered for computing actual tax payable for the year under consideration. 11. We have perused submissions advanced by both sides in light of records placed before us. 12. Following additional grounds raised by assessee before us: "The Appellant seeks the leave of the Hon'ble Income Tax Appellate Tribunal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmining tax payable by assessee for year under consideration. And therefore this issue deserves to be adjudicated. We also observe that no new facts needs to be investigated in order to adjudicate this ground. Respectfully following the ratio laid down by Hon'ble Supreme Court in the decisions referred to herein above, we admit the additional ground raised by assessee. Based on the above discussion, we restrict our view limited to Grounds 4-8 and Additional Ground raised by assessee. Accordingly, ground 2-3 raised by assessee stands dismissed as not pressed. Ground 4-8: 14. The Ld. Counsel submitted that admittedly, assessee declared income at 15% on the WIP. He submitted that assessee adopted a method of determination of income whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the net loss, a further 15% of investment was computed by the Ld. AO as additional income. This ad hoc method of computing income in the hands of assessee is without any basis. Admittedly, neither assessee nor the Ld. AO followed any of the recognised method to declare profits as per accounting standard 7 issued by Institute of chartered accountant of India. It is noted that the method adopted by assessee and revenue is not in accordance with A-S 9, which is a guidance note on recognition of revenue for real estate transaction based on satisfaction of revenue recognition. 19. In our opinion, the method adopted by assessee though was not a recognised method; the method of computation of additional income by AO is also uncalled for. We rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the method of computation of income by adhering to either of recognised accounting standards. We refer to and rely upon to the decision of Hon'ble Bombay High Court in case of in case of Nirmala L. Mehta vs. A. Balasubramaniam, CIT & Ors., reported in (2004) 269 ITR 1 held that, merely because the assessee has offered the income, that would not take away the right to contend that amount was not chargeable to tax. Hon'ble Court, referring the Article 265 of the Constitution of India, that reads as under: Article 265 of the constitution of India reads as under:- "No tax shall be levied or collected except by authority of law." 22. We therefore remand this issue back to Ld. AO to consider it afresh. The Ld. AO shall resort to eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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