JAYCEE HOMES LTD,MUMBAI vs. ITO 8(2)(1), MUMBAI

Rival contentions have been heard and record perused. Facts in brief are that assessee is engaged in construction and development work. During the year under consideration, the assessee has shown total sales (of flats) of Rs.15,13,42,036/- against which profit as per P&L A/c. has been shown of Rs.43,64,225/-. During the year the assessee had claimed deduction u/s.80IB of Rs.37,62,803/-. The claim u/s.80IB was subsequently revised to Rs.1,41,19,017/-. After filing the original return, the assessee revised its computation wherein the AO observed that the assessee has enhanced its claim of deduction u/s.80IB from Rs.37,62,803/- to Rs.1,41,19,017/-. On further analysis, it was observed

The assessee was asked to produce documentary evidence with regard to purchase of surplus material which was sold in cash. Assessee was also asked to provide name and address of the parties, who had purchased unutilised material. On assessee’s failure, the AO added the same as income from other sources.

By the impugned order the CIT(A) confirmed the addition after observing as under :- “3.5 The submissions made have been carefully considered. The issue at stake is the treatment meted out to the amount of Rs.1,71,66,084/- said to be received in cash and fully utilized for the payment of raw material suppliers and as labour charges. The appellant has at no stage in the assessment proceedings &

We have considered rival contentions and found that assessee has not produced any evidence before the lower authorities with regard to the parties from whom these materials were purchased nor the name and address of the parties to whom surplus material returned after completion of the project or the name of parties to whom this materials was sold. U/s.80IB deduction is allowable only out of the profit of eligible project under consideration and development of residential house with specified area. However, nothing was brought on record by the assessee to substantiate its claim of sale of surplus material retained after completion of project. The contention of ld. AR was that addition if any, is to be made only with respect to the net income earned on sale of these materials. Accordingly, we restore this matter with limited issue for verifying again the net profit earned on sale of surplus material. Assessee is also 4 required to prove eligibility u/s 80IB with respect to additional income so generated. Thus, the addition is to be confined to the net income and not to the gross receipts. The assessee is directed to place on record the name and address of the parties from whom these materials were purchased as well as name and address of the parties to whom these materials were sold, so as to establish the genuineness of the transaction of the purchase and sales. We direct accordingly.

In the result, appeal of the assessee is allowed in part for statistical purposes. Order pronounced in the open court on this 30/12/2015. (PAWAN SINGH) (R.C.SHARMA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक Dated 30/12/2015 प्र.कु.मभ/pkm, नन.स/ PS आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai. 3. आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5. गार्ा पाईर / Guard file. 6. सत्मावऩत प्रनत ////