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| The Tax Publishers2020 TaxPub(DT) 5513 (Ahd-Trib) INCOME TAX ACT, 1961
Section 132
Where assessee-firm was engaged in business of construction of residential flats and sale thereof and pursuant to search under section 132 proceedings under section 153A were initiated and AO made addition of unaccounted receipts in the form of on-money charged on sale of flats, CIT(A) rightly deleted the addition after considering the facts that additions, if accepted, would have resulted in increase in staggering net profit up to 52% which was ostensibly abnormal and out of sync with line of the business.
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Search and seizure - Addition of unaccounted receipts in form of on-money charged on sale of flats - Estimate addition contended to be on higher side as per the nature of business -
Assessee-firm was engaged in business of real estate primarily construction of residential flats and sale thereof. It developed a housing project under the name of 'Aqua Polaris' in Ahmedabad. Pursuant to search under section 132 proceedings under section 153A were initiated. AO completed the assessments and after referring to various documents and evidences found during the course of search alleged that there were unaccounted receipts in the form of on-money charged on sale of flats and made additions. Held: Having taken note of averments made in the statement of Managing Partner recorded under section 132(4) and also various evidences found in search and after consideration of facts, CIT(A) found the action of AO to be arbitrary and uncalled for. The additions, if accepted, would have resulted in increase in staggering net profit up to 52% which was ostensibly abnormal and out of sync with line of the business. CIT(A) rightly analysed the facts and inter alia observed that major component of expenditure was in the form of interest and remuneration to the partners which was not doubted by the AO. CIT(A) rightly concluded the issue in favour of assessee having regard to the facts and law.
REFERRED : Dy. CIT v. Panna Corporation (2012) 82 CCH 266 (Guj) : 2012 TaxPub(DT) 3269 (Guj-HC).
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, AHMEDABAD BENCH
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