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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: S/SHRI N.K.BILLAIYA & AMARJIT SINGH
सुनवाई की तारीख / Date of Hearing: 26.10.2015 घोषणा की तारीख /Date of Pronouncement: 15.01.2016 आदेश / O R D E R
PER AMARJIT SINGH, JM:
This is an appeal filed by the Revenue against the order dated 27.02.2012 passed by the Commissioner of Income Tax (Appeals)-29, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the assessment year 2004-05.
The revenue has taken the following ground of appeal:-
1. On the facts and in the circumstances of the case and in law the CIT(A) has erred in deleting the additions of Rs.21,25,700/- made u/s. 69 of the I.T.Act, 1961 and Rs.55,00,000/- made on account of additional income disclosed during survey but not offered at the time of filing of Return of Income.
2. On the facts and circumstances of the case and in law, the Ld.CIT(A) failed to appreciate that the assessee failed to conclusively prove and explain with supporting evidence and cogent material that the investments in real estate were made out of declared income of the earlier years. 3. On the facts and circumstances of the case and in law, the Ld.CIT(A) failed to appreciate that the assessee had voluntarily disclosed, under oath, an amount of Rs.1.50 crore during the course of survey as unaccounted net on-money receipts, so far, after considering all unaccounted expenses in respect of two projects viz. Avanti Apartments and Akansha Heights, and it was also not the case of the assessee that the disclosure was incidental to any future income or expenditure as is evident from the statement of the assessee under oath. 4. The appellant prays that for these and other reasons it is submitted that the order of CIT(A) on the grounds be set aside and that of the Assessing Officer be restored. 3. The facts of the case are that the assessee firm is engaged in the business of construction of residential and commercial unit. The assessee’s operation is only in the area of slum re-development for the slum, rehabilitation authority under the SRA Scheme. During the year under consideration, the assessee has shown combined work-in-progress in respect of all the projects. The opening work-in-progress has shown to the tune of Rs.13,50,21,565/- and closing work-in-progress has been shown to the tune of Rs.9,23,50,234/- after declaring sales receipt of Rs.9,13,54,288/-. The project has not been completed in the assessment year. The assessee firm filed its return of income on 28.10.2004 declaring the total income of Rs.88,52,270/-. Subsequently, filed the revised return of income on 21.03.2005 declaring total income of Rs.88,52,270/-. Later on the return of income of the assessee was selected for scrutiny and the income of the assessee was assessed to the tune of Rs.2,02,05,667/-. Thereafter, the assessee filed the appeal before CIT(A) who disallowed the addition in question, therefore, the revenue has filed the present appeal before us.
We have heard the submissions made by the representative of the Revenue and have gone through the record. The Revenue objected the deletion of the addition of Rs.21,25,700/- made u/s. 69 of the Income Tax Act, 1961( in short “the Act”). The contention of the Revenue is that the assessee invested in plot of land and residential flat valued to the sum of Rs.21,75,700/- and the assessee did not disclosed the source of such investment. The present case is the case for the A.Y. 2004-05. The return of income for the A.Y. 2003-04 & 2004-05 substantially disclose the income in the year 2003-04. The assessee had disclosed the opening capital account balance of Rs.1,21,68,846/-. In the current year the assessee has disclosed his income of Rs.88,52,270/-. The investment has duly been disclosed on sources and reflected in the regular balance sheet and other books of account of the appellant. Therefore in the said circumstances it cannot be said that the capital account of Rs.21,75,700/- is unexplained. Therefore the learned CIT(A) has rightly disallowed the addition in accordance with law. The other ground which has been taken by the revenue is that the addition of Rs.55,00,000/- voluntarily disclosed as income during the course of survey but not offered to tax and the assessee has offered only Rs.95,00,000/- against a total disclosure of Rs.1,50,00,000/- is wrong and against law and CIT(A) has wrongly deleted the voluntarily disclosure of income, we notice that the project of the assessee was not completed. Therefore there cannot be an addition relating to his undisclosed income from an incomplete project. The profit from the project can only be ascertained after its completion. As per record, the assessee was under obligation to ready the project but he failed to complete certain formalities with regard to the Slum Rehabilitation Authority. The addition made by the Assessing Officer was only on the basis of assumption. The assessee himself offered an amount of Rs.95,00,000/- because of ascertained phase of the project. The tax is required to be payable upon the income and not upon the ascertained income of the assessee offered by the Assessing Officer. There is no evidence on the file with regard to the earning of Rs.55,00,000/- therefore the CIT(A) has rightly disallowed the said amount in accordance with law. In view of the said circumstance the CIT(A) has passed the order judiciously and correctly which does not require to be interfere with at this appellate stage.
Accordingly the appeal filed by the revenue is hereby dismissed.