TMI Blog2023 (5) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... see s books of account, it cannot be considered as a turnover of the assessee. Therefore, considering the above facts and circumstances of the case, in our considered view, we are inclined to delete the addition made by the Ld. CIT(A) on the differential amount sold by the assessee and direct the Ld. AO to delete the addition partially sustained by the Ld. CIT(A). - I.T.A. Nos.9, 10 And 11/Viz/2023 And I.T.A. Nos. 24 & 25/Viz/2023 - - - Dated:- 4-5-2023 - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Assessee : Sri M.V. Prasad, AR For the Revenue : Sri MN Murthy Naik, CIT-DR ORDER PERS. BALAKRISHNAN, ACCOUNTANT MEMBER : The captioned three appeals (ITA Nos. 9, 10 11/Viz/2023) are filed by the assessee against the orders of the Ld. Commissioner of Income Tax (Appeals)-3, Visakhapatnam [Ld. CIT(A)] in DIN Order No. ITBA/APL/S/250/2022- 23/1047514094(1), ITBA/APL/S/250/2022-23/1047514389(1) and ITBA/APL/S/2022-23/1047514632(1), dated 18/11/2022 for the AY: 2017-18, 2018-19 and 2019-20 respectively arising out of the orders passed U/s. 153A [AYs 2017-18 2018-19] and U/s. 143(3) [for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and estimated the net profit @ 12.5% considering the income admitted by the similar business concerns. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). 4. Before the Ld. CIT(A), the assessee submitted various documents and pleaded that uniform rate of Rs. 3,400/- per sq ft cannot be adopted by the Ld. AO. After considering the submissions made by the assessee and on the basis of the various case laws relied on by the assessee, the Ld. CIT(A) observed that it is only the unrecorded receipts and net profit estimated thereon has to be brought to tax. Accordingly, the Ld. CIT(A) concluded that the assessee has already declared as turnover an amount of Rs. 2,000/- per sq ft sold by the assessee and therefore directed the Ld. AO to tax the balance of Rs. 1,400/- per sq ft sold by the assessee adopting the estimated profit rate of 8% by relying on the decision of the ITAT, Visakhapatnam Bench in the case of M/s. Yugandhar Housing Pvt. Ltd vs. ACIT, Central Circle, Viajayawada in ITA Nos. 83 to 88/Viz/2022, dated,30/08/2022. Aggrieved by the order of the Ld. CIT(A), the assessee filed the present appeal before the Tribunal. 5. The assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net profit @ 8% on the unaccounted turnover. The Ld. AR also invited our attention to the Paper Book-3 filed which is the compilation of the documents seized vide A/HICD/GNT/03 and submitted that in these documents the names of the parties and the total value of the flats including the rate per sq ft were mentioned but there is no reference about the receipts from the various customers and therefore it is merely a dumb document. The Ld. AR further submitted that Ld. AO has merely estimated and relied on the rate of Rs.3,400/- per sq ft without any justification whereas the flats were sold for price ranging from Rs. 3,100/- to Rs. 3,400/- per sq ft inclusive of additional works. The Ld. AR also invited our attention to Page No.15 of the seized document A/HICD/GNT/02 wherein the Flat No.203 was sold to Mr. P. Ravi Kumar which was taken as example by the Ld. AO and stated that the document shows that the customer has directly paid to Mr. Sekhar an amount of Rs. 13,84,000/- for the additional works done by Mr. Sekhar. The Ld. AR also invited our attention to the agreement entered into with Mr. Sekhar as submitted in the Paper Book. The Ld. AR therefore pleaded that the assessee has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see adopting the rate of Rs. 2,000/- per sq ft whereas agreement for additional works was entered into with various employees of the firm / contractors directly by the customers. We also find that various customers have directly made the payments for the additional works done in their respective flats to the concerned contractors and subsequently the contractors have made the payments to the suppliers of the material for carrying out the additional works. From the sworn statements recorded by various contractors, we find that there is no denial by the various contractors that the amounts were received by them, except for the fact that it was under the directions of the Managing Partner of the assessee-firm Mr. Chindripu Murali. The contractors / employees of the assessee-firm have also agreed that the amounts received from the customers for carrying out the additional works were directly paid to the suppliers of the material. Further, from the sworn statements we also find that the amounts for additional works were received by Cheque and various payments made to the suppliers of the material was also made through banking channels. The Ld.AO has also not brought on record any materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above paragraphs of this order, our decision given therein in the assessee s appeal for the AY 2017-18 mutatis mutandis applies to these appeals also. Thus, both the assessee s appeals in ITA Nos. 10 11/Viz/2023 (AYs: 2018-19 2019-20) are allowed. II ITA Nos.24 25/Viz/2023 (AYs: 2018-19 2019-20) (Revenue s Cross Appeals) 12. Both these cross appeals are filed by the Revenue against the orders of the Ld. CIT(A)-3, Visakhapatnam in DIN Order No. ITBA/APL/S/250/2022-23/1047514389(1) for the AY: 2018-19 ITBA/APL/S/250/2022-23/1047514632(1) for the AY: 2019-20 dated 18/11/2022 arising out of the orders passed U/s. 153A 143(3) of the Act respectively. 13. Brief facts pertaining to the Revenue s appeal for the AY 2018-19 are that the assessee is a firm deriving income from Real Estate business filed its original return of income for the AY 2018-19 on 28/10/2018 admitting a total income of Rs. 81,46,560/-. A search and seizure operation U/s. 132 of the Act was conducted on 28/03/2019 in the case of the assessee-firm at its registered premises wherein certain incriminating material was found and seized. Subsequently, the case was centralized by the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee could not produce the updated books of account and the supporting evidences like bills, vouchers and other documents in support of the entries made in the books of account. Besides, in view of the fact that the assessment completed in this case was U/s. 153A of the Act to assess the total income of the assessee, the same is statutorily not limited to only assess undisclosed income consequent to search action. Reference in this regard is made to the decision of the Hon ble Kerala High Court in the case of E.N. Gopakumar vs. CIT (2016) 75 taxmann.com 215 (Kerala), wherein it was held that assessment proceedings generated by issuance of a notice U/s. 153A(1)(a) can be concluded against interest of the assessee including making additions even without any incriminating material being available against the assessee as a result of search U/s. 132 on the basis of which notice was issued U/s. 153A(1)(a). 3. The Ld. CIT(A) erred in holding that the AO had adopted uniform rate of Rs. 3,400/- per sft on the basis of comparative cases since, as can be seen from the assessment order, the rates adopted are done project / venture wise and are different for different projects and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee could not produce the updated books of account and the supporting evidences like bills, vouchers and other documents in support of the entries made in the books of account. 3. The Ld. CIT(A) erred in holding that the AO had adopted uniform rate of Rs. 3,400/- per sft on the basis of comparative cases since, as can be seen from the assessment order, the rates adopted are done project / venture wise and are different for different projects and that too on the basis of seized material as also the statements of the persons concerned. Besides, the Ld. CIT(A) s observation that the AO had adopted the said rate on the basis of comparative cases is misplaced since the AO s remark was actually in respect of profit percentage adopted at 12.5% and not otherwise. Also the seized material contained details of cash receipts on sale of residential units in the venture Hasini Platinum County in addition to the payments received through banks, which was not repudiated by the assessee firm. 4. The Ld. CIT(A) erred in overlooking the fact that, the assessee firm had entered into two agreements with the customers for sale of each flat, one for sale of basic structure and other for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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