2015 (10) TMI 2538

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....ent. The return of income for the year under consideration was filed by it on 26.10.2005 declaring total income of Rs. 13,75,020/-. In the assessment original completed u/s. 143(3) of the Act vide order dated 27.12.2007, total income of assessee was determined by Assessing Officer at Rs. 39,24,108/- after making additions of Rs. 25,49,088/- to the income returned by the assessee. The said assessment was subsequently set aside by CIT vide his order passed u/s 263 of the Act with a direction to the AO to reconcile the expenditure incurred by the assessee on construction with respective source of funds claimed to be available with the assessee date-wise and to pass a speaking order. As per the direction of CIT, the expenditure incurred by asse....

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....the addition of Rs. 3.48 crores made by AO on account of alleged unexplained investment in construction. After considering the submissions made by the assessee as well as the materials available on record, Ld. CIT(A) deleted the addition made by the AO on account of alleged unexplained investment in construction for the following reasons given in his impugned order:- "I have gone through the submissions and documents filed by the appellant and also the order of the A.O As seen from the record, the CITII, Kolkata in his order u/s. 263 has issued a direction to reconcile the issue of expenditure incurred by the assessee together with date wise sources incoming funds available to them and to pass a speaking order. As seen from the details of....

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....mmary of expenses accounted for after 30.09.2004. As seen from these details the major part of expenses were incurred or actually paid before 30.09.2004. Only journal entries were made after 30.09.2004 on receipt of final bills or settlement of bills. On verification of the contents of the letter dated 22.10.2009, the conclusion drawn by the AO is without any evidences on basis. The A.O has not brought on record any inconsistencies/cash deficit/introduction of unaccounted monies in the books of accounts. The observation of the AO that the assessee has received funds only on 07.03.2005 is without any basis or fact brought on record. As seen from the balance-sheet there was capital work in progress of Rs. 2,47,72,922/- and pre-operative expen....

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.... have heard arguments of both the sides and also perused the materials on record. The only grievance of the Revenue as projected in the solitary ground raised in its appeal is that the addition made by AO on account of unexplained investment made by the assessee in the construction has been deleted by CIT(A) by relying on the new evidence filed by the assessee without giving any opportunity to the AO to verify the same which is contrary to the provision of Rule 46A of the IT Rules, 1962. In its CO, the assessee-company has supported the impugned order of CIT(A) stating that there was no additional evidence filed by the assessee before CIT(A) and CIT(A) having given relief to the assessee relying on the same evidence which was available befo....