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Facts
The assessee sold plots and the AO alleged receipt of on-money. The AO brought the alleged on-money to tax to the extent of the assessee's 1/4th share, treating it as capital gains instead of business income. The CIT(A) estimated the margin at 20% and re-computed the income for all years.
Held
The Tribunal found that other co-owners were assessed at lower rates on similar facts. Therefore, the higher estimation of 20% by the CIT(A) was not justified. The AO is directed to estimate the net profit at 12% of the sale consideration, including on-money, and re-compute the income.
Key Issues
Whether the estimation of net profit by the CIT(A) at 20% is justified when other co-owners were assessed at lower rates. Direction to re-compute income at 12% net profit.
Sections Cited
143(3), 153A, 44AD, 34(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by assessee for Assessment Years (AY) 2014- 15 to 2018-19 arises out of common order of learned Commissioner of Income Tax (Appeals), Kanpur [CIT(A)] dated 12-02-2024 in the matter of separate assessments framed by Ld. Assessing Officer [AO] u/s 143(3) / 153A of the Act. The registry has noted delay in the range of 3 days to 13 days in the appeals which stand condoned. The only prayer made by Ld. AR is to make a reasonable estimation. 2. From case records of AY 2014-15, it emerges that pursuant to search action in assessee’s group of case on 19-07-2018 leading to seizure of incriminating material, the impugned assessment was framed. The assessee sold certain plots at ‘Shree Shyamji Enclave’ and on the basis of incriminating material, Ld. AO alleged receipt of on-money for Rs.383.25 Lacs by the assessee through sale of plots during AYs 2014- 15 to 2018-19. After considering assessee’s submissions, Ld. AO brought the same to tax to the extent of assessee’s 1/4th share in the project. The same was assessed under the head ‘capital gains’ as against ‘business income’ as offered by the assessee on presumptive basis u/s 44AD in the return of income filed in response to notices issued u/s 153A wherein the assessee had considered the registered sale price as well as on-money as the business receipts. Similar assessments were framed for other years. 3. The substantive findings of Ld. CIT(A) are contained in para 6.20 onwards. The Ld. CIT(A), considering the fact that the department accepted the business income as offered by the other three joint owners in their respective assessments, accepted the ‘business income’ claim of the assessee. However, Ld. CIT(A) estimated the margin of 20% and re- computed the income of the assessee, for all the years. Aggrieved, the assessee is in further appeal before us.
The Ld. AR has submitted that in the case of other joint owners, Ld. AO has estimated addition of 10% and therefore, similar addition may be adopted for the present assessee. The copies of relevant assessment orders of other joint owners have been placed on record. The same has been opposed by Ld. CIT-DR.
We find force in the argument of Ld. AR since the other co-owners have been assessed at lower rates on similar facts. Therefore, the higher estimation of 20% as made by Ld. CIT(A) could not be held to be justified. On the facts and circumstances of the case, we direct Ld. AO to estimate the net profit @12% of sale consideration including on-money and re-compute the income of the assessee, for all the years. No other ground has been urged in the appeals.
All the appeals stand partly allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.