TMI Blog1999 (8) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... declaring Nil income for the block period. Thereafter the assessment proceedings were set in motion and the income for the block period up to the date of the search was determined at Rs. 21,19,883.This was considered as the undisclosed income of the assessee and charged @ 60 per cent. 3. In ground Nos. 4 to 6 the assessee challenges the entire addition of Rs. 21,19,883. The addition has been made on the basis of the following facts. The AO noticed that the assessee had booked residential flats as well as shops in its project known as Brindavan Apartments, Kalyan West. The agreements for sale entered into between the assessee and the purchasers were seized during the search. These agreements disclosed sale rates which varied between Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these rates and those mentioned in the agreements was treated as undisclosed income of the assessee for the block period. 5. We have heard the rival contentions. It is not the case of the Revenue that there was some material or document unearthed during the search which disclosed any on money transactions between the assessee and its customers. In fact no such material has been found during the search. The agreements which were seized during the search disclosed varying rates no doubt, but there is no material to show that the assessee received anything more than what was shown in the agreements. The AO, in such circumstances, was not justified in arbitrarily adopting Rs. 600 per sq. ft. in respect of residential flats and Rs. 1,000 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k a flat on 21st Nov., 1991, about six months earlier to Pradip Poddar, has had to pay Rs. 497 per sq. ft. In both the cases the flats are in the second floor back side. This strengthens our view that if the payment is to be made in one lump sum immediately on booking, the assessee gave a substantial reduction in the rate. Similarly, in the case of shops also though the assessee charged different rates, the difference was due to certain features such as the location of the shop, etc. For example, in the case of Urvi Construction it has booked a shop in the front side of the building, in the corner with an extra door at the back. The rate was Rs. 701 per sq. ft., whereas in the case of Shakarkar who booked a shop around the same time, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits have to be estimated as held by the Supreme Court in the case of CIT vs. British Paints India Ltd. (1991) 91 CTR (SC) 108 : (1991) 188 ITR 44 (SC) and, therefore, the AO was right in adopting estimated rates of sale. This is a case where a search has been carried out and the assessment is sought to be made under Chapter XIV-B which makes special provisions for search cases. The idea is to make an assessment of the true profits on the basis of the materials found during the search. If no materials are available, then the assessee's case has to be accepted. In the present case, as already noted, there is no evidence unearthed during the search showing any on money payments or understatement of consideration. Even in such a case it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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