Runwal Homes (P) Ltd. v. Dy. CIT

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The Tax Publishers2017 TaxPub(DT) 5580 (Mum-Trib) Runwal Homes (P) Ltd. v. Dy. CIT INCOME TAX ACT, 1961 --Search and seizure--Assessment under section 153AComputation of undisclosed income--On-money on sale of flats--Amount surrendered during the course of search and statement under section 132(4) as 'on-money' was therefore, rightly added by revenue authorities because the surrender amount was included the revised return filed.--Assessee was engaged in the development and sale of flats. During the course of search, certain documents were found on the basis of which it was noted that the sale transactions reported in ERP system of the assessee were to be comparably lower that the consideration value of similar kind of flats reflected in the manual booking form. On the basis of statement under section 132(4) recorded of various persons, the AO noted that data entered in the ERP system and the manual booking there was price variation. In their respective statements, they had accepted that the assessee had received on-money in respect of the project Runwal Symphony carried out by the assessee. Ultimately, the search party confronted i S, who surrendered the additional income in the various concerns. In the revised return assessee surendered certain amount and paid taxes there on.Held: The amount declared by the assessee relate to the Chestnut project, single building project completed during the year in respect of which evidence was found during the course of the search for on money received and it was also surrendered by the assessee company during the course of the search and same was included in the sum added by the AO to the assessee's income. The AO while computing the total income of the assessee has considered the revised return in which surrendered amount was declared by the assessee Therefore, the addition of amount surrendered had to be confirmed and, accordingly, the Tribual confirmed the said addition. Income Tax Act, 1961 Section 158A *REFERRED :* CIT v. Bilahari Investments (P) Ltd. (2008) 299 ITR 1 (SC), CIT v. Prime Developer [ITA No. 2452 of 2013, dt. 18-7-2016], CIT v. Gurubachhan Singh J. Juneja (2008) 302 ITR 0063 (Guj), Dy. CIT v. Panna Corporation (2012) 74 DTR 0089 (Guj), CIT v. President Industries (2002) 258 ITR 0654 (Guj), ITO v. Panchavati Developers (2008) 115 TTJ (Mum-Trib) 139 Jt.CIT v. K Raheja (P) Ltd. (2006) 102 ITD 414 (Mum-Trib), CIT v. Advance Construction Co. (P) Ltd. (2005) 275 ITR 30 (Guj), Dhanvarsha Builders & Developers (P) Ltd. v. Dy.CIT (2006) 102 ITD 375 (Pune-Trib), Wall Street Construction Ltd. v. JCIT (2006) 101 ITD 156 (SB) (Mum-Trib), ITO v.. FAVOUR : Against the assessee. A.Y. : 2015-16 INCOME TAX ACT, 1961 --Accounting method--Estimation of incomeSale consideration of flats----Where flats and shops had been sold at differentrate and recorded in booking record/book than the prescribed rate, addition could not be made on the basis of original prescribed rate of flats and shops taking into consideration various charges.--Assessee had booked shops from Rs. 19,791 to Rs. 26,039 per sq. ft. as per the documents found during the course of search. Similarly, flats had been booked from Rs. 12,068 to Rs. 16,746 per sq. ft. The bookings had been done at different rates as had been found from the documents found during the course of the search. The AO worked out the difference between the consideration agreed and the apparent consideration mentioned in the documents and added the same in the income of the assessee.Held: In addition to the value stated in the seized document, it was not denied that the assessee had received charges in addition to the base rate towards floor rise, garden facing, club charges, infrastructure, etc. While working out difference, the AO should have also taken into account various amounts received by the assessee towards floor rise, garden facing, club charges, etc., and added it to the apparent consideration. The assessee in this regard submitted a chart giving the calculation mentioning therein the total revenue as per the seized material and total revenue as recorded in the books and the difference was on-money as worked out and by the AO. The assessee had filed copies of agreement. In the agreement, these charges had specifically been mentioned. The assessee therefore submitted that the AO had calculated excess on-money of Rs. 3,32,45,737. Therefore, the AO was directed to verify this fact on the basis of the evidence submitted by the assessee. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2017 TaxPub(DT) 5580 (Mum-Trib)

Runwal Homes (P) Ltd. v. Dy. CIT

INCOME TAX ACT, 1961

--Search and seizure--Assessment under section 153AComputation of undisclosed income--On-money on sale of flats--Amount surrendered during the course of search and statement under section 132(4) as 'on-money' was therefore, rightly added by revenue authorities because the surrender amount was included the revised return filed.--Assessee was engaged in the development and sale of flats. During the course of search, certain documents were found on the basis of which it was noted that the sale transactions reported in ERP system of the assessee were to be comparably lower that the consideration value of similar kind of flats reflected in the manual booking form. On the basis of statement under section 132(4) recorded of various persons, the AO noted that data entered in the ERP system and the manual booking there was price variation. In their respective statements, they had accepted that the assessee had received on-money in respect of the project Runwal Symphony carried out by the assessee. Ultimately, the search party confronted i S, who surrendered the additional income in the various concerns. In the revised return assessee surendered certain amount and paid taxes there on.Held: The amount declared by the assessee relate to the Chestnut project, single building project completed during the year in respect of which evidence was found during the course of the search for on money received and it was also surrendered by the assessee company during the course of the search and same was included in the sum added by the AO to the assessee's income. The AO while computing the total income of the assessee has considered the revised return in which surrendered amount was declared by the assessee Therefore, the addition of amount surrendered had to be confirmed and, accordingly, the Tribual confirmed the said addition.

Income Tax Act, 1961 Section 158A

REFERRED : CIT v. Bilahari Investments (P) Ltd. (2008) 299 ITR 1 (SC), CIT v. Prime Developer [ITA No. 2452 of 2013, dt. 18-7-2016], CIT v. Gurubachhan Singh J. Juneja (2008) 302 ITR 0063 (Guj), Dy. CIT v. Panna Corporation (2012) 74 DTR 0089 (Guj), CIT v. President Industries (2002) 258 ITR 0654 (Guj), ITO v. Panchavati Developers (2008) 115 TTJ (Mum-Trib) 139 Jt.CIT v. K Raheja (P) Ltd. (2006) 102 ITD 414 (Mum-Trib), CIT v. Advance Construction Co. (P) Ltd. (2005) 275 ITR 30 (Guj), Dhanvarsha Builders & Developers (P) Ltd. v. Dy.CIT (2006) 102 ITD 375 (Pune-Trib), Wall Street Construction Ltd. v. JCIT (2006) 101 ITD 156 (SB) (Mum-Trib), ITO v..

FAVOUR : Against the assessee.

A.Y. : 2015-16

INCOME TAX ACT, 1961

--Accounting method--Estimation of incomeSale consideration of flats----Where flats and shops had been sold at differentrate and recorded in booking record/book than the prescribed rate, addition could not be made on the basis of original prescribed rate of flats and shops taking into consideration various charges.--Assessee had booked shops from Rs. 19,791 to Rs. 26,039 per sq. ft. as per the documents found during the course of search. Similarly, flats had been booked from Rs. 12,068 to Rs. 16,746 per sq. ft. The bookings had been done at different rates as had been found from the documents found during the course of the search. The AO worked out the difference between the consideration agreed and the apparent consideration mentioned in the documents and added the same in the income of the assessee.Held: In addition to the value stated in the seized document, it was not denied that the assessee had received charges in addition to the base rate towards floor rise, garden facing, club charges, infrastructure, etc. While working out difference, the AO should have also taken into account various amounts received by the assessee towards floor rise, garden facing, club charges, etc., and added it to the apparent consideration. The assessee in this regard submitted a chart giving the calculation mentioning therein the total revenue as per the seized material and total revenue as recorded in the books and the difference was on-money as worked out and by the AO. The assessee had filed copies of agreement. In the agreement, these charges had specifically been mentioned. The assessee therefore submitted that the AO had calculated excess on-money of Rs. 3,32,45,737. Therefore, the AO was directed to verify this fact on the basis of the evidence submitted by the assessee.