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The ACIT 25(3), C-11, R.No.308, Pratyaksha Kar Bhavan, Bandra Kurla Complex, Bandra(East), Mumbai 400051 Vs. M/s.K.D.Enterprises, 121/122, Sona Shopping Center, Trikamdas Road, Kandivali (West), Mumbai 67.
June, 18th 2015
                   MUMBAI BENCHES `A' MUMBAI
           [ .. , Û è  .  ,                    è


                   . / ITA No.9092/MUM/2010
                   [ [ /Assessment             Year 2007-08.
     The ACIT 25(3),         /                  M/s.K.D.Enterprises,
     C-11, R.No.308,                            121/122, Sona Shopping
     Pratyaksha Kar Bhavan,                     Center, Trikamdas Road,
     Bandra Kurla Complex,                      Kandivali (West),
     Bandra(East),                              Mumbai ­ 67.
     Mumbai 400051

     è    . /   . / PAN/GIR No. : AAEFK3339G
      ( /Appellant)     ..        (× / Respondent)

      Appellant by            Shri Jeevanlal Lavidiya
      Respondent by           Shri Nirav Vora
                 / Da te o f Hearing        : 09/06/2015
              /Date of Pronouncement : 09/06/2015
                                    / O R D E R


      This is an appeal filed by the Revenue and it is directed against order
passed by Ld. CIT(A)-35, Mumbai dated 18/10/2010 for assessment year
2007-08. Grounds of appeal read as under:

      (i) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A)
      erred in deleting the addition of Rs.16,37,969/- made by the Assessing Officer
      based on NP admitted by the assessee during the course of Survey."

      (ii) The appellant prays that the order of the Ld. CIT(A) on the above grounds be
      set aside and that of the AO be restored."

2.    A survey was conducted at the premises of the assessee under section 133A of
the Income Tax Act, 1961 (the Act) on 21/08/2007. During the course of survey it
                                            2              . / ITA No.9092/MUM/2010
                                                            [ [ /Assessment Year 2007-08.

was found that the project being developed by the assessee namely "Palm Spring" was
completed during the year under consideration and net profit as           per books of
accounts was shown as Rs.79.62 lacs. During the course of survey it was admitted
by the partner of the assessee firm that profit as per profit and loss account is a sum
of    Rs.79.62 lacs, which will accordingly be disclosed in the return to be filed.
Another amount of Rs.2.25 crores was also surrendered        which was in accordance
with loose paper found during the course of survey and for which there is no dispute
in the present appeal as the same was duly disclosed by the assessee in the return of
income and accepted by the AO.

3.      However, it was found by the AO that in place of Rs.79.62 lacs shown as profit
by the assessee from "Palm Spring" property, the assessee had shown an income of
Rs.63,24,031/- ( Rs.2,88,24,031 being returned income (-) Rs.2,25,00,000/- being
amount declared during the course of survey in respect of loose paper). He, therefore,
required the assessee to explain the shortfall of Rs.16,37,969/- (Rs.79,62,000 (-)
Rs.63,24,031/-). The assessee has filed the reply as under:
        " The net profit of Rs.79.62 lacs stated on the date of survey in PALM SPRING
        project was total net profit of the whole project. Net profit shown year wise is
        Rs.71.82 as per statement enclosed herewith. It was typographic error that the
        profit stated was approximately and not actual. We were in such state of mind
        during the survey that we have not noted the mistake. Over and above what we
        have declared Rs.2.25 crores is also part of profit only".

3.1     The AO did not accept such submission of assessee and on the basis of
statement recorded during the course of survey, the relevant portion of which
has been reproduced in the assessment order, made the addition.

4.      Before Ld. CIT(A) it was submitted that the assessee did not alter any of
the entry in the P&L Account found during the course of survey and it was only
due to mistake, the          profit was stated at Rs.79.62 lacs and following
reconciliation was submitted to contend that the profit as per P&L Account
found during the course of survey was in accordance with the profit declared
by the assessee in the return of income.
                                         3              . / ITA No.9092/MUM/2010
                                                          [ [ /Assessment Year 2007-08.

      "The net profit derived approximately Rs.79.62 lacs before the depreciation
      claimed throughout the project and expenses for the year 2006-07 as under:
                                                                Rs. In lakhs.
      Profit estimated during the survey                              79.62
      Actual profit of the project(as per working enclosed
      which is referred in the order para 5.1                          71.82
      a) Depreciation claimed during the projects:
              Year                  Rs.
              2002-03                79,628
              2003-04               1,59,985
              2004-05               1,58,300
              2005-06                96,361
              2006-07               47,736         6,42,010

      b)Expenses for the year Rs. 1,39,962
       Total of a + b = Rs.7,80,972 i.e. Rs.7,80 lakhs"

      He submitted that the appellant already admitted profit in the earlier years as
      shown below:
      A.Y 2002-03         Rs. 71,000
      A.Y 2003-04         Rs.1,56,000
      A.Y.2004-05         Rs.2,01,000
      A.Y.2005-06         Rs.4,30,000
      A.Y. 2007-08        Rs.63,24,000
      Total             Rs.71,82,000

4.1     Ld. CIT(A) confronted the AO with the aforementioned reconciliation
submitted by the assessee and required the AO to produce copy of P&L
Account and other documents found during the course of survey so as to verify
the contention of the assessee. However, AO could not produce any documents
according to which it could be said that the profit of the assessee was to the
tune of Rs.79.62 lacs in place of profit declared by the assessee at a sum of
Rs.63,24,031/-.    It is in these circumstances Ld. CIT(A) has deleted the
addition of Rs.16,37,969/-, against which Revenue is aggrieved and has raised
aforementioned grounds of appeal.

5.    Ld. DR relied upon the order passed by the AO and Ld. AR relied upon
the order of Ld. CIT(A).
                                         4              . / ITA No.9092/MUM/2010
                                                         [ [ /Assessment Year 2007-08.

7.    We have heard both the parties and their contentions have carefully been
considered. The assessee had submitted reconciliation statement before Ld.
CIT(A). The said reconciliation statement was confronted by Ld. CIT(A) to the
AO, who could not produce any documents to verify the stand taken by the AO
that profit declared by the assessee in the P&L Account found during the
course of survey was to the tune of Rs.79.62 lacs.        If the documents found
during the course of survey really shown the net profit of Rs.79.62 lacs, then
the said documents was required to be brought on record to contradict the
profit shown by the assessee in the return of income. The addition has been
made by the AO simply on the basis of statement recorded during the course of
survey, which was rebuttable.      On the basis of accounts maintained by the
assessee profit of Rs.63,24,031/- was shown and AO did not specify that which
entry was changed by the assessee in the P&L Account attached with the
return of income as compared to the P&L Account found during the course of
survey. Therefore, we are of the opinion that Ld. CIT(A) has rightly deleted the
addition and no interference is called for in the deletion of addition.

8.    In the result, the appeal filed by the Revenue is dismissed.

       Order pronounced in the open court on 09/06/2015
          Û   09/06/2015    

           Sd/-                                                Sd/-
(.   / D.KARUNAKARA RAO)                             (..  / I.P. BANSAL)
 è / ACCOUNTANT MEMBER                       Û è / JUDICIAL MEMBER
                  Dated 09/06/2015
                           5         . / ITA No.9092/MUM/2010
                                     [ [ /Assessment Year 2007-08.

    /Copy of the Order forwarded to :
1.    / The Appellant
2.   × / The Respondent.
3.    È() / The CIT(A)-
4.    È / CIT
5.    ,   ,  / DR, ITAT,
6.   [  / Guard file.

                                           / BY ORDER,
×  //True Copy//

                           /            (Dy./Asstt. Registrar)
                             ,  / ITAT, Mumbai
.../Vm, Sr. PS
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