DCIT, Jaipur V. UNIQUE BUILDERS & DEVELOPERS(KRISHNA), Jaipur

ITA 1008/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5254 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 26-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Capital asset converted into stock in trade; Document seized; Documents seized
• Section: 143(3); 80IB

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 1008/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. DEPUTY.COMMISSIONER OF INCOME - TAX, CIRCLE-2, JAIPUR. CUKE VS. M/S. UNIQUE BUILDERS & DEVELOPERS (KRISHNA), 8 TH FLOOR, THE MILE STONE, TONK ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACFU 0684 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : MS ROSHANTA MEENA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13.5.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/06/2016. VKNS'K@ ORDER PER SHRI KUL BHART, JM. THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LD. CIT (APPEALS), CENTRAL, JAIPUR DATED 22.11.2013 PERTAINING TO ASSE SSMENT YEAR 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE L D. CIT (A)(C), JAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 5, 31,79,520/- MADE BY THE AO BY APPLICATION OF SECTION 145(3) AND ESTI MATION OF PROFIT WHEN THE ASSESSEE IS NOT MAINTAINING QUANTITATIVE A ND QUALITATIVE STOCK REGISTER AND SEIZED DOCUMENTS LIKE A-2/51 FOU ND FROM THE LAPTOP OF SHRI NAVIN BHUTANI REFLECT ON MONEY RECEI VED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE L D. CIT (A)(C), JAIPUR HAS ERRED IN REJECTING APPLICATION OF PERCEN TAGE COMPLETION METHOD BY THE AO, WHEN THIS REJECTION MEANS ACCEPTA NCE OF LOSS RETURNS OF THE ASSESSEE ENGAGED IN CONSTRUCTION AND SALE OF RESIDENTIAL/COMMERCIAL PROJECTS. 2 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE L D. CIT (A)(C), JAIPUR HAS ERRED IN IGNORING THE FACT THAT THE TWO BROTHERS- SHRI AJAY PAL SINGH AND SHRI AJIT PAL SINGH WERE ACTIVEL Y ENGAGED IN THE BUSINESS OF THE ASSESSEE FIRM ITSELF BY BEING A PAR TNERS EITHER THEMSELVES OR THROUGH THEIR SONS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE L D. CIT (A)(C), JAIPUR HAS ERRED IN IGNORING THE FACT THAT THE DOCU MENT A-2/51 SEIZED FROM SHRI NAVIN BHUTANI AND A-2/19 SEIZED FR OM SHRI VIBHISHEK SINGH (PARTNER) INDICATED ON MONEY RECEIV ED ON FLATS SOLD. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE L D. CIT (A)(C), JAIPUR HAS ERRED IN NOT ADJUDICATING THE DISALLOWAN CE MADE U/S 80IB (10). 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 143(3) OF THE ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VID E ORDER DATED 28 TH MARCH, 2013. WHILE FRAMING THE ASSESSMENT, THE AO REJECTED THE B OOKS OF ACCOUNTS AND APPLIED PERCENTAGE COMPLETION METHOD THEREBY HE MADE AN ADD ITION OF RS. 1,24,61,054/-. HOWEVER, THE AO ON THE ALTERNATIVE PLEA MADE ADDITI ON OF RS. 5,31,79,520/- THEREBY COMPUTED INCOME OF RS.4,16,82,707/- AGAINST THE LOS S DECLARED AT RS. 1,14,96,813/-. THE AO ALSO DENIED THE DEDUCTION UNDER SECTION 80IB (10) TO THE ASSESSEE. THE ASSESSEE AGGRIEVED BY THIS ORDER PREFERRED APPEAL B EFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMISSIONS AND THE DECISIONS OF TH E TRIBUNAL IN ITA NO. 73 TO 77/JP/2012, 689 TO 690/JP/2012 DATED 14.3.2012 DELE TED THE ADDITION. HOWEVER, IN RESPECT OF THE CLAIM OF DEDUCTION, THE LD. CIT (A) DID NOT ADJUDICATE THE SAME. THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF LD. CIT (A). 3. THE ISSUE, WHICH ONLY REQUIRES OUR CONSIDERATION IS WITH REGARD TO DELETION OF ADDITION OF RS. 5,31,79,520/-. 3 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) 3.1. THE LD. D/R FOR THE REVENUE HAS SUPPORTED THE ORDER OF THE AO AND REQUESTED THAT ORDER OF LD. CIT (A) BE SET ASIDE AND THAT OF THE ORDER OF AO BE RESTORED. 3.2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSE E CONTENDS THAT ALL THE ISSUES RAISED IN REVENUES APPEAL ARE COVERED IN FAVOUR OF THE ASSESSEE BY DETAILED ORDER OF COORDINATE BENCH IN THE CASE OF ASSESSEE VIDE ORDER DATED 30.04.2015 IN ITA NOS. 464 TO 466/JP/2012 FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09. 2.3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 200 6-07 TO 2008-09 (SUPRA) HAS GIVEN DETAILED FINDINGS AS TO UPHOLDING THE BOOKS O F ACCOUNT OF THE ASSESSEE, PROJECT COMPLETION METHOD, ALLOWABILITY OF DEDUCTION/S 80IB AND OTHER ISSUES AS UNDER :- 38. AS ALREADY MENTIONED THE MAIN ISSUES IN QUEST ION HAVE ALREADY BEEN CONSIDERED BY US AND EARLIER BENCH THE APPEALS OF OTHER GROUP ENTITIES. RELEVANT EXTRACTS F THE JUDGMENTS H AVE BEEN EXTRACTED ABOVE. THE FIRST REASON ATTRIBUTED FOR REJECTING B OOKS OF ACCOUNTS IS TO THE EFFECT THAT ASSESSEES HAVE NOT MAINTAINED A DET AILED QUALITATIVE AND QUANTITATIVE STOCK REGISTER AND FAILED TO VALUE ITS CLOSING STOCK ON SUCH QUALITATIVE CUM QUANTITATIVE STOCK REGISTER. T HE ASSESSEES CONTENDS THAT THEY HAVE KEPT BOTH QUANTITATIVE AND QUALITATIVE DETAILS OF MATERIAL PURCHASED BY IT AS IS EVIDENT FROM VARI OUS LEDGER ACCOUNTS RELATED TO CONSTRUCTION MATERIAL THAT WERE FORMING PART OF THE SEIZED MATERIAL AVAILABLE WITH THE ASSESSING AUTHORITY. AL L THE EXPENSES RELATING TO THE PROJECT INCLUDING MATERIAL PURCHASE D WERE CHARGED TO PROJECT/WORK-IN-PROGRESS AND DIRECTLY TAKEN TO THE BALANCE SHEET. IN OTHER WORDS, THE MATERIALS PURCHASED FOR THE PROJEC T ARE ISSUED TO SITE IMMEDIATELY AFTER ITS PURCHASE AND TRANSFERRED TO P ROJECT IN PROGRESS FOR DETERMINING PROFIT AT THE TIME OF COMPLETION OF THE PROJECT. NO EXPENDITURE IS CHARGED TO PROFIT & LOSS ACCOUNT AS THEY WERE UNDER CONSTRUCTION AND THE RELEVANT CONSTRUCTION EXPENSES WERE CAPITALIZED. THE QUANTITY SO ISSUED TO THE SITES/PROJECTS IS REC ORDED IN SEPARATE RECORDS MAINTAINED FOR EACH ITEM OF BUILDING MATERI AL USED THEREIN. THERE WAS THUS NO PRACTICAL NEED TO MAINTAIN A DETA ILED QUALITY-WISE 4 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) QUANTITATIVE REGISTER BY THE APPELLANT MORE SO WHEN THE VALUATION ON COST BASIS COULD BE ACCURATELY MADE FROM THE LEDGER S. IT IS NEITHER THE CASE OF THE ASSESSING OFFICER THAT THERE HAVE BEEN OMISSION OR FAILURE TO RECORD ANY PURCHASES OR DIRECT EXPENSES TO THE P ROJECT IN PROCESS NOR EVEN A CASE THAT THE ASSESSEES INFLATED THE COS T OF SUCH STOCK WHICH IS BASICALLY CAPITALIZED COST OF CONSTRUCTION IN TH E LEDGERS. THE ACCOUNTS ARE DULY AUDITED BY A QUALIFIED CHARTERED ACCOUNTANT AS PER PAST ACCOUNTING PRACTICES, POLICIES AND REVENUE REC OGNITION METHOD ON APPROVED METHOD I.E. PROJECT COMPLETION METHOD. THE BOOKS OF ACCOUNT WERE SEIZED AND THE SAME WERE AVAILABLE WIT H THE ASSESSING OFFICER. THE ASSESSES CLAIM TO HAVE ALSO PRODUCED R EQUISITE VOUCHERS AND RECORD AS REQUIRED BY THE ASSESSING OFFICER FRO M TIME TO TIME. THE ASSESSING OFFICER ALSO APPEARS TO HAVE CASUALLY STA TED THAT AS PER AS- 2 IT IS ESSENTIAL THAT THE DETAILS OF BOTH QUALITY AS WELL AS QUANTITY OF DIFFERENT ITEMS OF STOCKS INCLUDING DETAILS OF DIRE CT EXPENSES AND COSTS ARE REQUIRED TO BE MAINTAINED METICULOUSLY. IN FACT , THE AS-2 NOTIFIED BY THE CBDT RELATES TO DISCLOSURE OF PRIOR PERIOD A ND EXTRA ORDINARY ITEMS AND CHANGE OF ACCOUNTING POLICIES. THE ACCOUN TS MAINTAINED BY THE ASSESSES CONFORM TO THE COMMERCIALLY ACCEPTED A CCOUNTING STANDARDS WHICH ENABLE DETERMINATION OF CORRECT PRO FITS OF ASSESSEES BUSINESS AS DONE IN PAST YEARS. THE FINDINGS REACHE D BY THE LOWER AUTHORITIES WITH RESPECT TO THE DEFICIENCIES AS POI NTED OUT FOR REJECTION OF BOOKS AS WELL, VALUATION OF INVENTORY, CHANGE OF METHOD OF ACCOUNTING TO % COMPLETION METHOD ARE NEITHER FACTU ALLY CORRECT NOR GRAVE ENOUGH TO SUSTAIN THEM. RELIANCE PLACED ON PA NDIT BROTHERS VS. CIT (SUPRA) SUPPORTS ASSESSEES PROPOSITION THAT ME RELY BECAUSE STOCK REGISTER IS NOT MAINTAINED, IT CANNOT BE SAID THAT THE ACCOUNTS BOOK MUST BE FALSE. MORE SO IN THESE CASES ARE ADOPTING PROJECT COMPLETION METHOD AND PROFITS WERE ASCERTAINABLE ONLY AT THE C OMPLETION OF THE RESPECTIVE PROJECT. BESIDES IT HAD ELIGIBILITY FOR DEDUCTION OF ALL ITS PROJECT PROFITS U/S 80IB. IN THESE CIRCUMSTANCES WE ARE UNABLE TO INFER THAT ANY VALID AND PERSUASIVE REASONS EXISTED FOR A SSESSES TO FALSIFY THEIR BOOKS OF ACCOUNTS. THIS EXERCISE HAS NO BENEF ITS RATHER IT PUTS THEM IN CONTROVERSIES WHICH ARE GLARING ENOUGH. BES IDES SUCH WIDESPREAD MISMANAGEMENT WILL YIELD SOME INCRIMINAT ING MATERIAL DURING THE SEARCH, SEIZURE AND SURVEY OPERATIONS. L D. AO HAS NOT RELIED ON ANY SPECIFIC MATERIAL IN THIS BEHALF; THE ISSUE OF MR. BHUTANI WILL BE DEALT HEREINAFTER. ASSESSEE HAS FURTHER REL IED ON THE HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF S.N. NAMASIVA YAM CHETTIAR VS. CIT, SUPRA HOLDING THAT INCOME-TAX AUTHORITIES HAVE TO CONSIDER THE MATERIAL WHICH IS PLACED BEFORE THEM AND ONLY AFTER TAKING INTO ACCOUNT IN ANY CASE THE ABSENCE OF STOCK REGISTER C OUPLED WITH OTHER 5 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) MATERIAL, ARE OF THE OPINION THAT CORRECT PROFITS A ND GAINS COULD NOT BE DEDUCED THEN THEY WOULD BE JUSTIFIED IN APPLYING TH E PROVISIONS OF REJECTION OF BOOKS. VIEWING THE FACTS OF ASSESSES C ASE IN THE LIGHT OF THESE FINDINGS OUR FOREGOING OBSERVATIONS ABOUT COR RECTNESS OF BOOKS BECOME VERY MATERIAL INASMUCH AS THERE IS NEITHER A NY GAIN NOR MOTIVE FOR ASSESSES TO INDULGING IN SUCH PRACTICES WHEN ALL THE PROFITS WERE DEDUCTIBLE U/S 80IB. BESIDES THE ENTIRE EVIDEN CE AND MATERIAL HAS NOT BEEN CONSIDERED TO COME TO A JUSTICIABLE CONCLU SION TO REJECT THE BOOKS OF REGULARLY AUDITED ACCOUNTS. A GENERALIZED OBSERVATION ABOUT THE NOTORIOUS TRADE PRACTICES IN REAL ESTAT E BUSINESS CANNOT BE A REASON FOR REJECTING THE BOOKS OF ACCOUNTS. HON'B LE APEX COURT IN THE CASE OF LALCHAND BHAGAT AMBICA RAM (SUPRA) AND HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DISCOVERY ESTATE PVT. LTD. (SUPRA) HELD THAT PRACTICE OF MAKING ADDITIONS ON MERE SUSP ICIONS AND SURMISES OR BY TAKING NOTE OF THE NOTORIOUS TRADE PRACTICES PREVAILING IN TRADE CIRCLES CANNOT BE RELIED FOR MA KING ADDITIONS. CONSEQUENTLY AND FINDING OF ON-MONEY TRANSACTIONS BASED ON ASSUMPTION AND IN THE ABSENCE OF ANY INCRIMINATING MATERIAL OR EXAMINATION OF BUYERS IS WITHOUT ANY BASIS AND JUST IFICATION. THESE OBSERVATIONS, THEREFORE, CANNOT BE VALID REASONS FO R REJECTING THE AUDITED BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN REGULAR COURSE OF ITS BUSINESS AS PER PAST PRACTICES AND ACCOUNTIN G POLICIES. 39. APROPOS SUBSTITUTING THE METHOD OF ACCOUNTING FROM PROJECT COMPLETION TO % COMPLETION BY THE AUTHORIZES BELOW IS BY OBSERVATIONS THAT ASSESSEES HAVE NOT FOLLOWED ACCO UNTING STANDARDS 9 & 7 WHICH TANTAMOUNT TO NOT FOLLOWING ACCOUNTING STANDARD-1 AS PRESCRIBED UNDER SECTION 145(2) OF THE ACT. IT IS A DMITTED POSITION THAT THE APPELLANT WERE REGULARLY FOLLOWING PROJECT COMP LETION METHOD FROM YEAR TO YEAR AND THE ASSESSMENTS PRIOR TO THE DATE OF SEARCH WERE ALSO FRAMED BY ACCEPTING PROJECT COMPLETION METHOD. AS PER ICAI GUIDE LINES REAL ESTATE DEVELOPER HAS AN OPTION TO CHOOSE FROM PROJECT COMPLETION METHOD OR THE PERCENTAGE COMPLETION METH OD AS BOTH ARE RECOGNIZED METHODS FOR REVENUE RECOGNITION IN SUCH CASES. ONCE THE OPTION IS EXERCISED BY ASSSESSEE, IT IS NOT OPEN TO THE ASSESSING OFFICER TO SUBSTITUTE HIS OWN OPINION TO CHANGE THE METHOD OF ACCOUNTING BECAUSE MID WAY IT IS FOUND THAT OTHER METHOD OF AC COUNTING BETTER SUITS THE REVENUE. IT IS THE ACCOUNTING PRINCIPLE, CONSISTENT FOLLOWING OF METHOD AND ITS EARLIER ADOPTION WHICH DECIDES THE I SSUE AND NOT THE SUITABILITY OR REVENUE. 6 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) 40. WE HAVE ALREADY MENTIONED THAT IN ANY CASE AS SESSSEES ARE ELIGIBLE FOR DEDUCTION U/S 80IB AGAINST THEIR INCOM E, IN THIS EVENTUALITY, TAKE THIS METHOD OR THAT, THE RESULT I S NIL TAXABLE PROFITS AFTER DEDUCTION. THUS IN THESE CASES THE SUBSTITUTI ON OF METHOD TO % COMPLETION METHOD IS BASED ON SURMISES, UNWARRANTED FACTS, IRRELEVANT CONSIDERATIONS AND A FRUITLESS EXERCISE. EXCEPT MAKING SOME ACADEMIC AND THEORETICAL RHETORICS, THE REVENUE HA S NOT BEEN ABLE TO DEMONSTRATE THAT THE METHOD OF ACCOUNTING ADOPTED B Y ASSESSEE IS NOT IN CONFORMITY WITH SET ACCOUNTING GUIDELINES, PROVI SIONS OF SEC. 145. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT . V. SIKKA & ANOTHER (1984) 149 ITR 73 (DEL.) HELD THAT IF THE M ETHOD OF ACCOUNTING IS ACCEPTED IN FIRST YEAR AND REGULARLY FOLLOWED IN SUBSEQUENT YEAR IT CANNOT BE SUBSTITUTED AT THE WH IMS OF AO. IT IS NOT MANDATORY FOR A REAL ESTATE DEVELOPER TO FOLLOW PER CENTAGE OF COMPLETION METHOD AS PRESCRIBED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA UNDER AS-7. AS-7 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, RECOGNIZES THE POSI TION THAT IN THE CASE OF CONSTRUCTION CONTRACTS THE ASSESSEE CAN FOL LOW EITHER THE PROJECT COMPLETION METHOD OR THE PERCENTAGE COMPLET ION METHOD. NEITHER THE REVISED GUIDANCE NOTES 2012 ISSUED BY I NSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA NOR THE EXPOSURE DRA FT FOR GUIDANCE NOTE ON RECOGNITION OF REVENUE ISSUED BY THE INSTIT UTE OF CHARTERED ACCOUNTS OF INDIA IN 2011 ARE MANDATORY OR OVERRIDE THE STATUTORY PROVISIONS. LD. CIT(A) HAS ALSO TAKEN CONTRADICTORY STAND; ON ONE HAND IT IS HELD THAT THERE CAN BE NO REVENUE RECOGN ITION UNLESS 25% PROJECT IS COMPLETE, RIGHTLY SO AS NO BUILDER CAN E ARN FROM PLINTH OR PILLARS ON OTHER HAND IT IS HELD THAT THE PROPERTY IN FLATS STANDS TRANSFERRED BY BOOKING AMOUNT. THIS CLEARLY IMPLIES COMPLETION OF SALE AND REVENUE GENERATION. WE MAY HASTEN TO ADD T HAT THE STUBBORN STAND OF AUTHORITIES BELOW HAS LEAD TO UNIMAGINABLE CONTRADICTIONS AND ANOMALIES. WHEREAS THE ASSESSEES METHOD DOES N OT LEAD TO ANY SUCH EVENTUALITIES AS IT WAS REGULARLY FOLLOWED AND ACCEPTED BY DEPARTMENT BESIDES BEING ONE OF THE WELL FOLLOWED M ETHOD AMONG REAL ESTATE BUILDERS. THE PROJECT COMPLETION METHOD FOLL OWED BY THE APPELLANTS, THEREFORE, COULD NOT BE FAULTED WITH BY THE REVENUE. THE ASSUMPTIONS MADE BY THE AUTHORITIES BELOW THAT BY N OT FOLLOWING AS-9 & 7 THE SAME TANTAMOUNT TO NOT FOLLOWING PRESCRIBED AS-1 UNDER SECTION 145(2) OF THE ACT IS PROFOUNDLY MISPLACED, UNNECESSARY AND UNCALLED FOR BESIDES BEING CONTRARY TO PRINCIPLES O F ACCOUNTANCY AND INTERPRETATION OF THE STATUTORY PROVISIONS. THE SAM E, THEREFORE, COULD NOT BE TAKEN A VALID BASIS FOR CHANGE OF METHOD REG ULARLY EMPLOYED BY THE APPELLANT. THUS WE UPHOLD THE METHOD OF REVENUE RECOGNITION 7 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) ADOPTED BY THE ASSESSEES AS PROJECT COMPLETION ME THOD. THE OTHER JUDICIAL PRECEDENTS CITED BY THE ASSESSEE MENTIONED IN ITAT ORDERS AS WELL AS WRITTEN SUBMISSIONS SUPPORT OUR VIEW. 41. APROPOS ANNEXURE A-2/51 AS WELL AS THE STATE MENT OF SHRI NAVEEN BHUTANI RECORDED ON 28.01.2009 UNDER SECTION 132(4) OF THE ACT REGARDING A PRINT OUT TAKEN FROM HIS LAPTOP; HE STATED THAT IT WAS IN RELATION TO UNIQUE DREAM BUILDERS ONLY AND NOT T HE ASSESSEE ENTITIES. THIS PERSON WAS NOT PRODUCED FOR CROSS EX AMINATION BY THE APPELLANTS AND AO HIMSELF ADMITS THAT THE PRINT OUT INVENTORIZED AS SEIZED ANNEXURE A-2/51 REVEALING NET REALIZATION OF RS. 17.91 CRORES AND A PROFIT OF RS. 5.17 CRORES REFLECTS ONLY THE E STIMATES. THE SAID DOCUMENT DOES NOT REVEAL THE ACTUAL STATE OF AFFAIR S OF THE PROJECTS DONE BY THE ASSESSEES. NO CORROBORATIVE EVIDENCE H AS BEEN FOUND AS A RESULT OF SEARCH ON HIM OR FROM EITHER SIDE OF SEPA RATED GROUP TO SUPPORT THAT FIGURES WRITTEN THEREIN FOR THE AREA C ONSTRUCTED, SOLD OR TRANSFERRED NOR ABOUT THE NET REALIZATION OR PROFIT S EARNED IN ANY SUCH PROJECTS. THE SAID EXCEL SHEET DATA WAS PREPARED F OR MARKETING OF UNIQUE BUILDERS PROJECTS PRODUCTS AND COULD NOT BE TAKEN AS A RELEVANT AND RELIABLE INFORMATION OF BUSINESS OPERA TIONS OR EARNING ANY EXTRA MONEY OR ON MONEY WAS RECEIVED BY THE A PPELLANT WHICH COULD ENABLE THE ASSESSING OFFICER TO REJECT THE AC COUNTS MAINTAINED IN REGULAR COURSE. IN FACT, THIS DOCUMENT AS SUCH D ID NOT HAVE ANY EVIDENTIARY VALUE AGAINST THE ASSESSEE-APPELLANT. THE AUTHORITIES BELOW MADE SOME PROJECTIONS TO CONVERT THESE HYPOTH ETICAL FIGURES INTO ASSESSEES BUSINESS OPERATIONS ON HYPOTHETICAL ASSUMPTIONS. THE BOOKING AGREEMENTS OF THESE FLATS WERE REACHED AT D IFFERENT TIMINGS AT DIFFERENT LOCATIONS WITH DIFFERENT SPECIFICATIONS. THE APPELLANTS HAVE MADE DETAILED SUBMISSIONS IN THE SYNOPSIS ON THIS F ACTUAL CIRCUMSTANCES, INCONSISTENCIES IN LAPTOP PROJECTION S, IMPOSSIBILITY OF SUCH PROFITS IN REAL ESTATE TRADE AS EXTRAPOLATED B Y DEPARTMENT AND EXPLAINED VARIATION IN RATES. THE EXPLANATION IS BO NAFIDE AND REMAINS UNCONTROVERTED BY THE REVENUE. THE OBSERVATION AS W ELL AS FINDINGS REACHED BY AUTHORITIES BELOW CANNOT BE UPHELD AS TH EY LACK IN CREDIBILITY BEING BASED ON IRRELEVANT CONSIDERATION S AND PURE CONJECTURES. LOOKING AT THE GAMUT OF INCONSISTENCIE S AND INFIRMITIES IN THE PROJECTIONS OF DEPARTMENT VIS A VIS LAPTOP FOUN D FROM MR. BHUTANI, THEREFORE, COULD NOT BE A REASON SUFFICIENT TO ENDO RSE THAT THE ACCOUNTS MAINTAINED BY THE ASSESSEE ARE UNRELIABLE OR THEY W ERE NOT VERIFIABLE. CONSEQUENTLY ASSESSES GROUND IN THIS BEHALF DESERVE TO BE ALLOWED. ON THESE FACTS THE ITAT JAIPUR IN SIMILAR GROUP CASES HAVE ALREADY 8 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) DECIDED THESE ISSUES IN FAVOR OF THE ASSESSEE, WHIC H WE RESPECTFULLY FOLLOW. THUS THE ITAT, JAIPUR BENCH BY GIVING DETAILED OBSE RVATIONS HAS HELD THAT:- (I) THE PROJECT COMPLETION METHOD ADOPTED BY THE ASSESSEE IS UPHELD; (II) THE REJECTION OF BOOKS OF ACCOUNT U/S 145(3) O F THE ACT IS REVERSED. THUS THE BOOKS OF ACCOUNT ARE UPHELD. (III) THE DATA RECOVERED FROM THE COMPUTER OF SHRI NAVEEN BHUTANI HAS BEEN HELD BY THE AO TO BE IN THE NATURE OF ESTI MATE AND HAS NO CONSEQUENCE BY ASSESSEE'S BOOKS SO AS TO REJECT THE M. (IV) REVENUE HAS RAISED GROUNDS ABOUT PROJECT COM PLETION METHOD BECAUSE THEY HAVE PREFERRED APPEAL BEFORE HON'BLE H IGH COURT AGAINST ITAT ORDER IN ONE OF THE GROUP CONCERNS OF THE ASSE SSEE I.E. UNIQUE BUILDERS & DEVELOPERS (KRISHNA), IN EARLIER YEARS (V) DEDUCTION U/S 80IB OF THE ACT HAS BEEN ALLOWED BY ITAT. RESPECTFULLY FOLLOWING THE ORDER OF COORDINATE BENC H (SUPRA), THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16/06/2016 . SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 16/06/2016. DAS/ 9 ITA NO. 1008/JP/2013 DCIT VS. UNIQUE BUILDERS & DEVELOPERS (KRISHNA) VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT, CIRCLE-2, JAIPUR. 2. THE RESPONDENT- M/S. UNIQUE BUILDERS & DEVELOPER S (KRISHNA), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1008/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR