Case Law Details
Rathod Developers & Builders Vs ITO (ITAT Bangalore)
ITAT Bangalore held that as the additional income offered is considered as business income, remuneration u/s. 40(b)(v) of the Income Tax Act is available on the same.
Facts-
The assessee is a partnership firm engaged in the business of construction of residential and commercial buildings. It also undertakes development of layouts. A survey u/s. 133A of the I.T. Act was conducted at the business premises of the assessee.
During the course of survey, AO found a valuation report, wherein the cost of construction per square feet was mentioned at Rs.3,200, whereas the assessee had entered into sale agreement at an average rate of Rs.2,375 per sq.ft. The partner was confronted with the aforesaid valuation report. It was stated that the valuation report did not disclose the true and fair market value of the flat, however, the partner in order to buy peace with the Department, voluntarily offered a sum of Rs. 2 Crore as on-money received.
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