https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=754669 https://www.taxtmi.com/caselaws?id=754669 Addition made under excess receipts from contract works - As per AO assessee has designed the contract receipts to bring the unaccounted money into the books of account - CIT(A) deleted addition - HELD THAT:- Merely granting sub-contracts without any corresponding development activities will not legalize the unlawful amount paid by the said MEIL to the assessee in the guise of the running bills. Further nothing had been brought out on record that the State Government had permitted MEIL to grant sub- contract to assessee. Accepting the income disclosed by the assessee as legal income would be illogical, contrary to law and undermine the purpose of construction activities. In fact, it is difficult to comprehend that such activities were permitted to be carried out unabetted by the State Government and huge amount has allegedly been released to such contractors. The time has come where some suitable mechanism should be put in place by the State Government or other agencies against such contractors so that there should not be any siphoning or diversion of funds meant for development by any unscrupulous contractor. If today we decide this issue against the Revenue, by legalizing the payment merely because the contractor had submitted the confirmations of grant of contract then it would set a wrong precedent and there would not be any actual construction / development works would take place. Since in the present case, the Revenue authorities have failed to examine the details of the work contracts awarded and the payment made by the Government which are relatable to various stages of work contract, therefore, we remit back the matter to the file of Assessing Officer for fresh examination. Needless to say while examining the matter afresh, the Assessing Officer shall take the assistance from state Government Development Agencies and other statutory enforcement agencies to find out the terms of the allotment of the contract, execution, performance, quality control etc., and whether the assessee can divert the funds meant for development to its other activities namely, aircraft / solar power business. Thereafter, considering the inputs from the State Government and other enforcement agencies the Assessing Officer shall decide the matter in accordance with law after granting due opportunity of hearing to the assessee. In case, the Assessing Officer comes to the conclusion that no work has been executed by the assessee or only a small part of the work has been executed then to pass the assessment order accordingly. Thus, ground no.2 is allowed for statistical purposes. Addition towards STCG [Short Term Capital Gains] - the value of the shares deserves such a huge price, it is not clear why the earlier company has sold these shares at a meagre price of Rs.10/-.- CIT(A) deleted addition - HELD THAT:- Since we are remanding ground no.2 back to the file of Assessing Officer, therefore, it is deemed appropriate to remand this issue also to the file of Assessing Officer, to maintain the consistency. Case-Laws Income Tax Thu, 22 Feb 2024 00:00:00 +0530