ORDER : J.B. PARDIWALA, J. 1. This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short, 'the act, 1961') is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Surat dated 17th July 2019 in the ITA No. 3390/AHD/2016 for the A.Y. 2009-10. 2. The Revenue has proposed following questions of law for the consideration of this Court : “(i) “Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is right in upholding the decision of Ld. CIT(A) deleting the addition of Rs.3,38,44,000/- made by the AO estimating the income @25%? (ii) Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is right in deleting the assessee's income as estimated by the AO on the advances received from its customers without appreciating that the assessee has worked as a contractor only and therefore revised provisions of AS-7 would apply for estimation of matching income on proportionate completion method?” 3. It appears from the materials on record that the original assessment under Section 143(3) of the Act was completed on 16th December 2011, determining the total income at Rs. 1,32,140/-. Thereafter, the case came to be reopened under Section 147 of the Act by issue of a notice under Section 148 of the Act, dated 10.03.2014. The objections raised by the assessee as regards the re-opening came to be overruled. The assessment under Section 143(3) read with Section 147 of the Act came to be completed on 31.03.2015 after making addition of Rs.3,38,44,000/- on account of business profit estimated at the rate of 25% of the total receipts of Rs.13,53,76,000/- and Rs.3,76,496 on account of the disallowance under Section 40 A (3)of the Act. 4. The assessee being dissatisfied with the assessment order preferred a Appeal before the CIT(A). The CIT(A) allowed the Appeal in part. The CIT(A) deleted the addition made by the AO on the basis of estimated profit at the rate of 25% of the total receipts. The Revenue being dissatisfied with the order passed by the CIT(A), preferred cross-appeal before the Tribunal. 5. The Tribunal affirmed the findings recorded by the CIT (A) and dismissed the Appeal. The CIT(A) deleted the addition made by the AO on the basis of estimated profit at the rate of 25% of the total receipts. The Revenue being dissatisfied with the order passed by the CIT(A), preferred cross-appeal before the Tribunal. 5. The Tribunal affirmed the findings recorded by the CIT (A) and dismissed the Appeal. Being dissatisfied with the impugned order passed by the Tribunal, the Revenue is here before this Court with the present Tax Appeal. 6. We take notice of the following findings recorded by the AO in the assessment order : “In view of the above discussion, an addition of Rs.3,38,44,000/- is made to the total income being 25% of the total receipts of Rs.13,53,76,000/- as business profit of the assessee for the year under consideration. Penalty proceedings u/s 271[1][c] of the I.T. Act are initiated for furnishing inaccurate particulars of income and concealment of income.” 7. The CIT (A) while partly allowing the Appeal preferred by the assessee against the assessment order observed as under : “6.2.1. The Grounds of appeal-Ground No.2 pertains to making addition of Rs.3,38,44,000/- by estimating the income of the assessee firm at 25% on the advance received by the assessee from its customer amounting to Rs. 13,53,76,000/- without appreciating the facts and circumstances of the case in right perspective. The AO reopened the case u/s 147 of the Act as the AO noticed that the appellant was having Rs.5,21,47,182/- on account of work in progress on asset side and Rs. 13,53,76,000/- as advances from customers (Pusti Enterprise Pvt. Ltd, on liability side) but the matching income on percentage completion method as per the provision of AS7 was not offered for taxation. The AO held that the appellant had entered into contract with M/s Pusti Enterprise Pvt. Ltd. for Rs.16,73,50,400/- out of which Rs.13,53,76,000/- was received as advance but the income was not disclosed @25% relying on the judgment of the IT AT Mumbai in the case of Param Anand Builders Pvt. Ltd. Vs. ITO 59 ITD 29. The AO held that as per the agreement the average cost of construction was fixed at Rs. 1000/per sq. feet and accordingly the appellant had received more than 80% of the total cost as advanced on 31.03.2008 and the property was to be handed over before 30.12.2008. ITO 59 ITD 29. The AO held that as per the agreement the average cost of construction was fixed at Rs. 1000/per sq. feet and accordingly the appellant had received more than 80% of the total cost as advanced on 31.03.2008 and the property was to be handed over before 30.12.2008. But the property was not handed over on or before 30.12.2008 and the appellant had shown WIP in his balance sheet FY 2008-09, 2010-11 and 2011-12. The AO held that the appellant was not following the accounting system as prescribed under AS-7 relating to construction contract, made the addition of Rs.3,38,44,000/- @25% of the total receipts of Rs. 13,53,76,000/-. The appellant submitted that the out of the total area the appellant had agreed to sell the part of the building i.e. 34720 sq. feet, of area at different rates to M/s Pusti' Enterprise Pvt. Ltd. for a total consideration of Rs. 16,76,50,400/-. In the year under construction a very limited construction work was carried out of Rs. 4,39,20,677/- which included the cost of the land of Rs.3,44,04,150/-. It was further contended that no sale deed was executed for the property in the relevant assessment year. 6.2.2. On the perusal of the details, it is observed that during the relevant assessment year a very limited construction work was carried out as per the audited accounts work in progress of Rs.4,39,20,677/- wherein the land cost was Rs. 3,44,04,1.50/- and the construction expenses was Rs.95,16,527/-. The project was under construction upto 2015-16 wherein the construction expenses in each financial year were as following: Financial Years Cost of Construction (Rs.) 2009-10 2784218 2010-11 10899178 2011-12 7599366 2012-13 9511635 2013-14 2596548 2014-15 4274084 2015-16 7494113 6.2.3. The actual construction cost incurred during the year including the land cost as per the WIP was only 26% (43920677/167350400 * 100) of the value of property agreed to be sold. As per the agreement the appellant was required to give clear and complete title of the property after obtaining the BUC/any other certificate from the competent authority before the execution of the sale deed. The terms and conditions of the agreement clearly lays down that only on the execution of the sale deed on the completion of the projection the property was to be transferred to Pusti Enterprise Pvt. Ltd. Initially the appellant had agreed to sell 34730 sq. ft. The terms and conditions of the agreement clearly lays down that only on the execution of the sale deed on the completion of the projection the property was to be transferred to Pusti Enterprise Pvt. Ltd. Initially the appellant had agreed to sell 34730 sq. ft. but due to certain restrictions imposed by the Government Authorities, the development plan was revised and the appellant was only able to build 26258 sq, ft. The customer Pusti Enterprise Pvt. Ltd. also reduced the requirement to 18954 sq. ft, from the original requirement and the sale deed was executed in FY 2015-16 for 18954 sq, ft. only for a. total consideration of Rs.117670000/-. The excess amount received was refunded by the appellant. The total area said by the appellant was as following :- Sold Area Sq. Feet Sale Value (Rs.) Date of execution of sale deed Ground Floor 6560 5,29,83,700 15.12.2015 First Floor 6566 4,31,43,300 15.12.2015 Part of Second Floor 5828 2,15,43,000 15.12.2015 Total 18954 11,76,70,000 6.2.4. From the above facts it is evident that the transfer of the legal title was the condition precedent to the buyer. No registered sale deed was executed in the year under consideration and the amount of the total area sold was also reduced from 34720 to 18954 sq, ft. for the total consideration of Rs.11,76,70,000/- instead of the original amount of Rs. 16,73,50,400/-. The AO has arbitrarily determined the profit @25% of Rs. 13,53,76,000/-without any basis or material in possession. The AO's presumptive profit of Rs.3,38,44,000/- cannot be sustained for the reasons discussed above and therefore, the ground of appeal are being allowed. 7. The Tribunal after referring to the aforesaid finding recorded by the CIT (A) ultimately held as under : “After going through the finding given by the ld. First Appellate Authority on the issues involved in the Revenue appeal in which the ld. First Appellate Authority has deleted the addition in dispute, we are of the view that in compliance of the agreement no registered sale deed was executed in the year under consideration and the amount of total are sold was also reduced from 34720 to 18954 sq.ft for the total consideration of Rs.11,76,70,000/- instead of the original amount of Rs.16,73,50,400/-. First Appellate Authority has deleted the addition in dispute, we are of the view that in compliance of the agreement no registered sale deed was executed in the year under consideration and the amount of total are sold was also reduced from 34720 to 18954 sq.ft for the total consideration of Rs.11,76,70,000/- instead of the original amount of Rs.16,73,50,400/-. Therefore, the Assessing Officer has wrongly determined the profit @25% of Rs.13,53,76,000/- without any basis or material in position merely on the basis of presumption which is not sustainable in the eye of law. Even otherwise, the sale deeds in dispute was executed in financial year 2015-16 for which the assessee has offered its income. Therefore, the ld. First Appellate Authority has rightly deleted the addition in dispute by passing the detailed order mention above. Therefore, no interference is called for in the well-reasoned order passed by the Id. First Appellate Authority in deleting the addition in dispute and we dismiss the Revenue appeal and uphold the impugned order. 8. We take notice of the fact that the AO in the assessment order has not discussed anything or rather has not been able to justify in any manner the addition of Rs.3,38,44,000/- to the total income being 25% of the total receipts of Rs.13,53,76,000/- as the business profit of the assessee for the year. No reason worth the name has been assigned by the AO in this regard. This exactly weighed with the CIT (A) while partly allowing the appeal of the assessee. The Tribunal ultimately concurred with the findings recorded by the CIT(A) and dismissed the appeal preferred by the Revenue. We are at one with the Tribunal in taking the view that the AO wrongly determined the profit at the rate of 25%, without any basis or credible material. 9. In such circumstances referred to above, we are of the view that the questions of law as proposed by the Revenue cannot be termed as substantial questions of law. 10. In the result, this Tax Appeal fails and is hereby dismissed.