Case Law Details
A. Sivashankar Vs DCIT (ITAT Chennai)
In our considered view, the estimation made by the AO towards undisclosed income of under reporting of sales Revenue from sale of plots, is purely a guess work, which is based on the suspicion and surmises, but not based on any material evidences.
Facts- The only issue that came up for our consideration from Revenue appeals for all the three AYs is estimated income from sale of plots by extrapolation of income detected during the course of search to remaining period.
During the course of search, in the case of the assessee, a document in the form of sale agreement with Mr.M.A.Salim was found and seized, as per which, the assessee was entered into agreement to sale some of plots developed in the residential layout to Mr.M.A.Salim @ Rs.1,458/-per sq.ft., whereas, the assessee has sold remaining plots to other persons @ Rs.400/- to Rs.800/- per sq.ft. The AO has tabulated few examples of Sale Deed executed by the assessee to some buyers and then, compared to agreed rate between the assessee and Mr.M.A.Salim and opined that the assessee has understated the sale consideration of plots sold to other persons and thus, by considering the rate agreed to sell to Mr.M.A.Salim, has adopted for other Sale Deed executed to different persons and estimated undisclosed income on account of under reporting of sale price for all the three assessment years.
The CIT(A) held that deleted the addition made by the AO by holding that there is no scope for the AO to determine undisclosed income by extrapolation of documents in block assessment. Therefore, the Ld.CIT(A) opined that the AO is erred in extrapolating sale price of plots from Rs.400/-to Rs.1,458/- per sq.ft. and made additions towards differential sale consideration. Being aggrieved, the revenue preferred the present appeal.
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