TMI Blog2021 (11) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) examined the comparative chart of expenses for three earlier years as well as and post survey period and 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. CIT(A) held that ad-hock proportionate disallowance is not permissible and directed the assessing officer to delete the disallowance made by assessing officer. There is no dispute that assessee was engaged for development of project of Victoria Palms, Dumas Road, Surat. The assessee was not having any other source of income. There is no dispute that the assessee is not entitled for set off of losses of earlier year, which have been allowed to the assessee. As in case Shilpa Dyeing Printing Mills (P) Ltd [ 2015 (7) TMI 691 - GUJARAT HIGH COURT ] also held that income declared in the survey falls under one of the head of income and current year losses be set off against such undisclosed income - Grounds of appeal raised by the revenue are dismissed. - ITA No. 254/SRT/2019 - - - Dated:- 9-11-2021 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014. During the course of survey, a loose paper file found which was inventorised as BF-1 at page no.27 of Annexure BF-1, the audited undisclosed income was recorded. In respect of project developed by assessee namely Victoria Palms of about ₹ 5.00 crores. During the course of survey, the statement of Shri Viren Shah Director of assessee-company was recorded. In the statement of Shri Viren Shah admitted ₹ 5.00 crore as an additional income received from sale price during relevant assessment year, which was not accounted in the regular books of account. During the assessment, on perusal of profit and loss account, the Assessing Officer noted that assessee had shown profit of ₹ 2.25 crore against the income of ₹ 5.00 crore disclosed during the course of survey. The Assessing Officer on the basis of statement/disclosure of ₹ 5.00 crore as additional sale price of bungalows and plots over and above the regular business income. The Assessing Officer worked out proportionate expenses of ₹ 3.77 crore in the following manner; Expenses incurred in respect of real estate/ construction activity x discloser made by asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd loss account on the basis of audited books. The assessee submitted that allegations by Assessing Officer that assessee claimed expenses against disclosed income and which tantamounts to retraction is thoroughly misplaced and misconceived. The assessee submitted that they had not been claimed any separate expenses per se against the said disclosed income. Assessing Officer has not pointed out any such expenses per se claimed against undisclosed income. The Assessing Officer resorted to mere guess work and disallowed ₹ 3.77 crore as proportionate expenses alleging the same to have been claimed against the additional sale price, all expenses debited to profit and loss account were necessary and would have been otherwise incurred during the year under appeal. No evidences were brought by Assessing Officer to establish that any of the expenses debited to profit and loss account are not allowable. The assessee also relied on certain case laws. The ld. CIT(A) after considering the submission and necessary details held that in last two years, the assessee has returned losses of ₹ 1.72 crore in AY.2012-13 and ₹ 2.29 crore in AY.2013-14. While filing return of subject as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer. The CIT-DR submits that during the survey proceeding, the assessee admitted unaccounted income over and above the regular income registered in the books of account. The assessee has not offered the unaccounted income, admitted during the course of survey action while filing return of income. The assessee claimed expenses on the income offered during the survey and as shown loss income comparative to admitted income. The ld. CIT(A) simply relied the contention of the assessee while deciding the appeal. 6. On the other hand, the ld. AR of the assessee supported the order of ld. CIT(A). The ld. AR of the assessee submits that survey period recorded the statement of one the director of assessee. While recording statement of director of assessee, the additional sale price was either received or receivable. The Director of assessee simply admitted ₹ 5.00 crore as additional sale price received/receivable during the year and there is no such admission of disclosure over and above the regular income on such allegation, the Assessing Officer made addition by disallowing proportionate expenses. The assessee submitted net profit of ₹ 3.48 crore as per profit and loss acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order. The ld. CIT(A) noted that assessee claimed that there no expenses is claimed against the undisclosed income. And that expenses incurred and claimed in the audited statement were actually incurred against the turnover and would have been incurred even without income admitted in survey. The ld. CIT(A) recorded that it was 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) recorded that Assessing Officer has not given any finding on allowability or otherwise of expenses and that there is no finding of Assessing Officer that expenses are bogus and non-genuine. 8. We find that the ld. CIT(A) also examined the comparative chart of expenses for three earlier years as well as and post survey period and 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 the assessing officer to delete the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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