TMI Blog2022 (9) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... e the matter of an argument that the amount of sales by itself cannot represent the income of the assessee. It is the realization of excess over the cost incurred that only forms part of the profit included in the configuration of sale. We are of the opinion that the entire unaccounted turnover cannot be brought to tax or the turnover admitted at the time of search operations cannot be brought to tax and as such there can only be a reasonable estimation of net profit on the unaccounted turnover. Since the assessee has declared an average net profit of 8.18% for the AYs 2012-13 to 2018-19, we are of the considered view that the same net profit percentage shall be adopted on the unaccounted turnover of the assessee for the various assessment years. We are therefore inclined to set-aside the orders of the Revenue and the grounds raised by the assessee are allowed. - I.T.A. Nos. 83, 84, 85, 86, 87 & 88/Viz/2022 - - - Dated:- 30-8-2022 - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Assessee : Sri MV Prasad, CA For the Revenue : Sri MN Murthy Naik, CIT-DR ORDER PER BENCH : The captioned appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case the Assessing Officer has not considered the written submissions submitted point wise in response to show cause notice before passing the order which amounts to breach of natural justice. 6. On the facts and in the circumstances of the case, the Assessing Officer has not brought any material or evidence in which the appellant company has sold the plot for the consideration which is more than the sale value in the ventures carried by the appellant company. 7. On the facts and in the circumstances of the case, the Assessing Officer was made the assessment under surmises and conjectures. 8. On the facts and in the circumstances of the case, the Assessing Officer has arrived at the profit ie., net income for which there is no basis. 9. On the facts and circumstance of the case, the Assessing Officer has resorted to make the addition on mere document/loose paper without corroborative evidence. The document which does not describe and express any meaning cannot be relied upon by the Assessing Officer with mere guess work. 10. Without prejudice to the other grounds, on the facts and circumstance of the case, the Assessing Officer is not justified in making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dice to other grounds, on the facts and circumstances of the case, the Assessing Officer has ascertained the turnover as per the seized material A/YHPL/BO/69 and 93, A/KRR?PO/01 is Rs. 117.89 Crs and admitted turnover is Rs. 72.52 Crs. He further calculated the difference in turnover of Rs. 44.77 Crs which is suppressed turnover. If it is so, turnover instead of making the addition the receipt as entire addition which is against the principles of law and facts. 19. On the facts and circumstances of the case, the Assessing Officer has made an addition of Rs. 2.20 Crs without any basis hence not justified. 20. The appellant may add, alter, modify or substitute any other points to the grounds of appeal at any time before or at the time of hearing of the appeal. 4. Brief facts of the case are that the assessee is a Private Limited Company and was searched on 25/10/2017 u/s. 132 of the Act including group concerns and connected individuals. Subsequently, notice U/s. 153A of the Act was issued calling for the return of income, which was served on the assessee on 27/09/2018. In response to the notice, the assessee filed its return of income declaring the total income as dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial pertaining to unaccounted expenditure incurred by the assessee in earning the unaccounted income. The Ld. AR submitted that the undisclosed turnover is Rs. 52,12,93,979/- and not Rs. 44,77,69,667/-. The Ld. AR also further submitted that in most of the projects, the assessee earned only marketing commission and not from sale of lands. The Ld. AR submitted that the average profit for the assessee in respect of the AYs 2012-13 to 2018-19 is 8.18% only on the declared turnover by the company which has been duly assessed. The Ld. AR therefore pleaded that the Ld. AO has taxed the income of Rs. 27,45,12,189/- solely based on the income admitted by the Managing Director of the company while recording the statement U/s. 132(4) of the Act. The Ld. AR further submitted that the Ld. AO has erred in not considering the unaccounted expenditure which was available in the seized material. The Ld. AR therefore pleaded that the net income may be taxed considering the unaccounted expenditure also as seized by the search team. The Ld. AR produced before us the paper book containing the vouchers seized by the search team. Further, the Ld. AR also relied on various case laws some of them are ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016-17 12,39,13,400 47,30,017 3.82% 2017-18 65,00,4000 26,60,302 4.09% 2018-19 8,70,07,900 42,22,440 4.85% 8. The average net profit on the declared profit on the accounted turnover for all the AYs ie., from 2012-13 to 2018-19 works out to 8.18%. 9. It is imperative to note that the estimated profits are embedded in the sales and hence treating the undisclosed sales/gross receipts as income is not valid. 10. In the instant case, there is no dispute on the unaccounted turnover. The grievance of the assessee is that the income/net profit embedded in unaccounted turnover must have been taxed and not the entire turnover. We find merit in the argument of the Ld. AR that the assessee has consistently declaring net profit on the accounted turnover ranging from 3% to 10%. It is also noted that the unaccounted turnover of the assessee works out to 33% of the total turnover both disclosed and undisclosed and hence the assessee has disclosed nearly 67% of the turnover in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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