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TMI Blog2021 (11) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... enses against the unaccounted income offered in the course of survey and promised to pay tax on said income. (iii) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has failed to appreciate the fact that the assessee admitted during the course of survey that the unaccounted income admitted was over and above the regular income registered in the books of account and same has not fully offered for tax in his return of income. (iv) On the facts and circumstances of the case and in Law, the Ld.CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld.CIT(A)-1 Surat may be set-aside and that of the Assessing Officer's order may be restored. 2. Brief facts of the case are that the assessee is engaged in the business of Real Estate Developer. The assessee filed its return of income for AY.2014-15 showing total income of Rs. Nil on 29.11.2014. The return was revised on 04.02.2015 declaring nil income. For the financial year ended on 31.03.2014, the assessee declared profit of Rs. 3.48 Crore. After setting off earlier year losses the assessee declared nil income. The case was selected for scrutiny. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleging that the same are claimed on sale price. The foundation of addition of proportionate expenditure that admission made by assessee to Rs. 5.00 crore and the additional sale price on bungalows and plots is over and above the regular business income. The assessee submitted that allegation of Assessing Officer in para no.6 of the assessment order that Rs. 5.00 crore is disclosed as additional sale price over and above of the regular income is incorrect and devoid of facts and is not in consonance with the reply of Director to Question No.9 of the statement recording during the survey. In Question No.9, which deals with the loose paper pertaining to assessee. The assessee further stated that the Director in very unequivocal terms have simply admitted Rs. 5.00 crore as additional sale price received/receivable during the year and that there is no such admission of disclosure over and above regular income as alleged and based on such allegations, Assessing Officer made addition by disallowing proportionate expenditure. The additional sale price on bungalow during the year not over and above the regular income. The assessee further submitted that net profit of Rs. 3.48 core is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the assessee that expenses can only be disallowed after giving categorical finding on the basis of evidence that expenses are not allowable. The ld. CIT(A) held that Assessing Officer has accepted and treated the additional income as business income and allowed the set off brought forward losses. The Assessing Officer has not given any finding on allowability or otherwise of expenses. There is no finding of Assessing Officer that expenses are bogus and non-genuine. The ld. CIT(A) also examined the comparative chart of expenses for three years and post survey. The ld CIT(A) on perusal of such details held that it is not a case that inflation of expenses or excessive booking of expenses in post survey period or no case of booking of extra ordinary expenses comparative to earlier years. The ld. CIT(A) held that ad-hock proportionate disallowance is not permissible and directed to delete the disallowances. Aggrieved by the order of ld. CIT(A), the Revenue has filed present appeal before Tribunal. 5. We have heard the submission of ld. CIT-DR for the Revenue and ld. AR of the assessee. The ld. CIT-DR for the Revenue supported the order of Assessing Officer. The CIT-D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer made disallowance of expenses in ad-hock manner. The assessing officer has wrongly mentioned that the assessee has shown profit of Rs. 2.25 Crore. We find that the assessee has shown profit of Rs. 3.48 Crore. The assessee has setoff the earlier year losses before declaring the profit of the year. All these facts is not discussed by assessing officer in his order. We find that ld CIT(A) during hearing before him call record of expenses in preceding three years and the details of the expenses incurred in post survey period. The ld CIT(A) after considering the material before him held that there is no dispute regarding set off losses suffered by the assessee, which the assessing officer has allowed. The Assessing Officer assessed the amount disclosed/undisclosed survey as business income after raising query and examining the idea of taxing it under section 68. The Assessing Officer worked out disallowance expenses in the ratio Rs. 5.00 crore to total turnover. We find that the ld. CIT(A) held that only dispute regarding proportionate disallowance of expenses made by AO by applying formula as per para no. 6 of assessment order. The ld. CIT(A) noted that assessee claimed t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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