TaxTMI 
TaxTMI 
TaxTMI 
2011 (8) TMI 1179
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....e AO observed that the current liabilities have increased to ₹ 3,47,71,188/- as compared to ₹ 1,73,59,157/- in the preceding year. The assessee was asked to explain the cause of substantial increase in current liabilities as the assessee had claimed in its earlier submission that it had not carried out any major development project during the year. The assessee was also asked to provide complete break up and explain the item 'Schemes Account' which showed an amount of ₹ 3,45,42,423/-. The assessee's explanation was that the major changes in current liabilities are due to 'Scheme Account' and the assessee furnished the break up of closing balance under different schemes as on 31st March, 2006. The assessee further furnished the explanation about the scheme. On perusal of the same the AO noticed an error to the effect that in the case of La Papillion as per Annexure-A, the opening balance was shown as NIL whereas in Annexure-A1 the opening balance on 31st March, 2005 was shown as ₹ 3,87,247/-. Further in all other schemes with respect to amount received during the year the narration indicated "Add" and the amounts are added to the opening balance while in the ....
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....tutory liabilities 106527 14980 91467 Total 34771188 17359157 17412031 The ld. AR for the assessee further submitted as under :- "During the course of assessment proceedings, the company vide its letter dated 20.10.2008 had provided complete details of increase in Scheme in Annexure-A and Annexure A-1. Both the annexure A and A-1 have been reproduced in the assessment order also on page no.2 & 3. In the said annexures it is evident that in Annexure-A credit balance of each scheme as on 31.03.2006 and 31.03.2005 in the books of the company are mentioned. From the perusal of the said annexure the following facts are very clear- (a) In the case of Pruthvi Heritage Scheme, the closing credit balance is ₹ 82,20,849/- against the opening balance of ₹ 15,35,849/- accordingly there is increase of ₹ 66.85 lacs under the said scheme. The said increase is on account of receipt of ₹ 77.40 lacs of the advance given during FY 2002- 03 towards project and ₹ 10.55 lacs is booking amount refunded to members. (b) In the case of La-Papillon Scheme, the closing balance is ₹ 56,59,754/- against the opening debit balance of ₹ 3,87,246/- accordingly....
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....he booking amount, provision of taxation and expenses and in view of the said facts, the amount under consideration is not trade or revenue receipts of the appellant and on which income is required to be estimated. The AO has stated that the assessee has not provided details of the persons, addresses, of booking amount received or refunded but in this regard we have to submit that such details is not relevant in our case and further the ld. AO should have given show cause notice before making such huge addition of ₹ 27,85,925/-. Just due to failure on part of assessee to attend on 17.11.2008 the ld. ITO has made the addition is against the natural justice. The ld. ITO should have asked for project consultant agreement between the company and the society (scheme) before making such addition. In view of the above facts and circumstances the disallowance made by the ld. AO is bad in law and therefore the ld. AO be directed to delete the said addition." After taking into consideration these submissions of the assessee ld. CIT(A) deleted this addition. Aggrieved by this order of the ld. CIT(A) now the Revenue is in appeal before us. 5. At the time of hearing ld. DR relied on the....
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....een accepted by the Revenue in earlier years. Therefore, rejecting the book results shown by the assessee during the year under appeal was also not justified as law is settled that once the method of account has been accepted by the Revenue in earlier years it cannot be rejected in the subsequent years without bringing anything on record to show that facts were different during that year. In view of above, ld. CIT(A) has rightly deleted the addition made by the AO by treating the advances/booking amounts received by the assessee during the year under appeal by treating them as trade receipts of the assessee. This ground of the Revenue is dismissed. 7. The second ground of Revenue's appeal relates to addition of ₹ 3,56,878/- u/s 2(22)(e) of the Act on account of deemed dividend. 8. During the course of assessment proceedings the AO found that assessee has availed unsecured loans from various parties, one of which was Chase Buildcon Projects (P) Ltd. and the outstanding balance as on 31.3.2006 was ₹ 5,53,713/-. The AO also found that Shri Narendra K. Keshkani held 31.6% shares in the said company as also he held 45.69% share in the assessee company and in the balance s....