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TMI Blog2023 (10) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 3. Brief facts are that the assessee is a partnership firm and has filed its return of income for AY. 2018-19 on 29.10.2018 declaring total income of Rs.30,85,410/-. The assessee firm is engaged in business of real estate development viz property developer & builders. The AO notes that the assessee recognizes the revenue on percentage completion method. Later on, the case of the assessee was selected for scrutiny and the scrutiny was in respect of three (3) issues i.e. (i) income from real estate business (ii) unsecured loans and (iii) sales turnover/receipt. According to the AO, while he scrutinized the books of the assessee vis-à-vis the tax audit report (TAR), there was certain discrepancy so he show-caused the assessee as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is before us. 4. We have heard both the parties and perused the records. We note that the AO has rejected the books of account of the assessee on the premise that there was mismatch in turnover figures in the tax audit report and the Income tax return. According to the AO, the assessee could not demonstrate that it had maintained stock records and not able to reconcile the quantities of the sale as well as the disclosure as per the ICDS to the tune of Rs.1,14,63,282/-. On appeal, the Ld. CIT(A) has reversed the action of the AO and accepted the books of account maintained by the assessee in its regular business activity. The Ld. DR representing the revenue, assailing the action of the Ld. CIT(A) submitted that even though the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AR, as per this methodology, the assessee has recorded turnover of Rs.25,52,69,395/- (refer page no. 33 of PB) whereas in the Form 3CB/TAR, at item no. 40 against serial no. (a) total turnover of the assessee was erroneously shown as 'zero' which ought to have been Rs.25,52,69,395/- and Rs.'zero' was that of previous year. According to the Ld. AR, this was a data entry error and the auditor who audited the accounts of the assessee as well as the TAR was the same, and realizing the mistake, has filed the certificate to the effect that while filling up the Form 3CB/TAR, error crept in while punging/typing at point no. 40 of the TAR, wherein turnover of the assessee ought to have been recorded as Rs.25,52,59,395/- whereas zero has been err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the assessee firm was developing only one project and have only one work-site and was following the percentage completion method for recognizing revenue from its real estate project. The Ld. CIT(A) noted that AO could not appreciate the computation of the closing stock as per such method and misdirected himself to compare the activity of assessee with trading/manufacture which was erroneous. Likewise, the Ld. CIT(A) did not countenance the action of AO treating Rs.1,14,63,282/- as closing stock whereas it was the closing provision of expenses as reflected in balance-sheet. In the light of the aforesaid facts, the Ld. CIT(A) was pleased to reverse the action of the AO and accepted the books of account of the assessee. In this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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