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TMI Blog2023 (9) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... s in respect of the addition of Rs. 12,07,70,833/- towards profits/gains earned by the assessee on transfer of land pertaining to villas that were sold. 3. From the facts on this aspect are that the assessee is a partnership concern, is in the business of development of properties for the purpose of residential/commercial. The assessee firm has taken land on development basis from M/s. Hyderabad Prime Space Development Ltd., and Smt. P. Maruthy in the month of July, 2011. The construction activity of the villas was started in the month of January, 2013. During the scrutiny of the return of income of the assessee for the assessment year 2013-14, the learned Assessing Officer noticed that in the month of March, 2013, the assessee registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income of the assessee. 6. Assessee preferred appeal before the learned CIT(A) and contended that it did not sell 20 villas but they sold only 19 villas for Rs. 16.95 crores and out of this amount, following the Percentage Completion Method, they have recognized revenue only to the tune of Rs. 2,90,98,601/- since the project was complete only to 17.16%. It further stated that Percentage Completion Method is one of the correct methods of offering income. 7. Learned CIT(A) perused the record and recorded that the assessee submitted the income on Percentage Completion Method, which is not disputed by the learned Assessing Officer and the books of assessee were not rejected by the learned Assessing Officer. Learned CIT(A) referred to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the learned CIT(A). Revenue further contends that the registered value of the sale consideration of 20 villas sold was not offered as 'gross receipts' as attributable to the sale of land, villas as discussed in the assessment order ought to have been sustained. 10. Learned DR contends that the crux of this matter is that the assessee did not disclose the entire amount of sale consideration in respect of 20 villas but accounted for only Rs. 2,90,98,601/- and even if the assessee has been following the Percentage Completion Method, it is imperative for the assessee to disclose the entire sale consideration and then, plead for the Percentage Completion Method. According to the learned DR, the sale deeds reveal that as on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 18 crores had accounted only for Rs. 2.91 crores and out of the above sum, Rs. 18 crores have received till 31/03/2013. The entire amount of sale consideration was not disclosed in the turnover, but it reported turnover of only Rs. 2.91 crores. Learned Assessing Officer further recorded that the assessee replied that the revenue is being recognized at the time of registration of sale deed. 13. Learned CIT(A), on the other hand, found that in the balance sheet which is available in the paper book, found that on the liabilities side, the advances from the customers at Rs. 10.24 crores as on the date of 31/03/2013 was shown: whereas on receipts side of Income and Expenditure account, the construction income of Rs. 2.91 crores and closing w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. When we approach this fact in the light of our observations that for many of the sale deeds registered during the year, cheques towards sale consideration were issued postdated, the facts remains for verification is about how much of money was realized during the financial year 2012-13. 15. Neither the learned Assessing Officer nor the learned CIT(A) undertook this exercise. The observations made by the learned CIT(A) that the balance sheet reveals the construction income at Rs. 2.91 crores and the advances from customers as on 31/03/2013 as Rs. 10.24 crores, come nearer to the figures given in the chart furnished by the assessee. It is so because the chart furnished by the assessee shows the receipts during the financial year 2012-13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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