TaxTMI 
TaxTMI 
2017 (9) TMI 1284
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....0 & 2010-11 vide different orders dated 21-06-2012 under section 143(3) r.w.s. 153A/C of the Income Tax Act, 1961(hereinafter 'the Act'). First we will deal with ITA No. 790/Mum/2013 assessee's appeal and ITA No. 1144/Mum/2013 Revenue's appeal for A.Y. 2005-06 in the case of M/s M.R. Construction. 2. The first common issue in these cross appeals is as regards to the disallowance made by AO and partly restricted by CIT(A) on account of remuneration under section 40(b) of the Act and also expenses for non deduction of TDS under section 194C of the Act on account of transport charges by invoking the provisions of section 40a(ia) of the Act. For this Revenue has raised following ground Nos. 1 & 2: - "1. That the ld. CIT(A) has erred in law and on facts in deleing the additions of Rs. 10,00,000/- & Rs. 1,00,000/- made under section. 40(a)(ia) on account of non-TDS on payment for labour charges & professional charges respectively without appreciating that the ratio of the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverages P. Ltd vs. CIT 293 ITR 226 is only in respect of section 201 & not in respect of section 40(a)(ia). 2. The appel....
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.... relating to these disallowance are there or not? He fairly conceded the position that from the order of the AO or from the order of the CIT(A) or from the seized material it cannot be gathered whether any seized material relating to these disallowances are available on record. As there is a categorical fact recorded by the AO as well as CIT(A) that these disallowances are made by the Revenue on the basis of the return filed by the assessee originally on 31-10-2005 for the AY 2005-06 and search took place on 16-11-2009. The assessment/processing of return of income got completed on 31-10-2006, as no notices under section 143(2) was issued and assessment was not abated in view of the second proviso to section 153A of the Act. Once, the assessment was completed and has not abated for relevant AY, this issue is squarely covered by the decision of the Hon'ble Bombay High Court in the case of CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015) 374 ITR 645 (Bom). 5. We find that this issue now stands covered in favour of assessee and against the Revenue by the decision of Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. (....
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....issue notice u/s 153A in respect of 6 preceding years, preceding the year in which search etc. has been initiated. Thereafter he has to assess or reassess the total income of these six years. It is obligatory on the part of the AO to assess or reassess total income of the six years as provided in section 153A(1)(b) and reiterated in the 1st proviso to this section. The second proviso states that the assessment or reassessment pending on the date of initiation of the search or requisition shall abate. We find that there is no divergence of views in so far as the provision contained in section 153A till the 1st proviso. The divergence starts from the second proviso which states that pending assessment or reassessment on the date of initiation of search shall abate. This means that an assessment or reassessment pending on the date of initiation of search shall cease to exist and no further action shall be taken thereon. The assessment shall now be made u/s 153A. The case of Ld. Counsel for the assessee is that necessary corollary to this provision is that completed assessment shall not abate. These assessments become final except in so far and to the extent as undisclosed income is fo....
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....nding proceedings is not of such permanent nature that they cease to exist for all times to come. The interpretation of the Ld. Counsel, though not specifically stated, would be that on annulment of the assessment made u/s 153(1), the AO gets the jurisdiction to assess the total income which was vested in him earlier independent of the search and which came to an end due to initiation of the search. The provision contained in section 132 (1) empowers the officer to issue a warrant of search of the premises of a person where any one or more of conditions mentioned therein is or are satisfied, i.e. - a) summons or notice has been issued to produce books of account or other documents but such books of account or documents have not been produced, b) summons or notice has been or might be issued, he will not produce the books of account or other documents mentioned therein, or c) he is in possession of any money or bullion etc. which represents wholly or partly the income or property which has not been and which would not be disclosed for the purpose of assessment, called as undisclosed income or property. We find that the provision in section 132 (1) does not use the word "inc....
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....assessment or reassessment of total income u/s 153A (1) (b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results: - a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the AO, (b) in respect of non-abated assessments, the assessment will be made on the basis of books of account or other documen....
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....Purohit amounting to Rs. 1,00,000/- and Ravi Purohit of Rs. 1.50 lacs and these are unexplained cash credits. The AO notices from annexure iii to firm No. 6B of the special audit report, which contains details of unsecured loans taken and repaid and according to him these unsecured loans are unexplained cash credits and accordingly he brought to tax u/s 68 of the Act. The CIT(A) also confirmed the action of the AO and confirmed the addition of unexplained cash credit u/s 68 of the Act amounting to Rs. 2.50 lakhs. Aggrieved, assessee preferred the appeal before Tribunal. 9. Before us, the learned Counsel for the assessee stated that addition is not based on any seized material because no incriminating documents were found during the course of search and this is mentioned by the special auditors in their report in annexure-III to form No.6B containing the details of unsecured loans from where the AO has made addition. According to the learned Counsel these details were provided by assessee from its accounts which were available before the AO in the original return of income. According to the learned Counsel this issue is also covered by the decision of Hon'ble Bombay High court in....
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.... the total income of the assessee is revised as under: - Sl No. Particulars Amount Amount A Total income as per order giving effect of CIT(A) dated 28-03-2013 92,00,295 Less Relief allowed by CIT(A) (i) Unrecorded advance (Addition was made on protective basis, the issue is confimrmed in the cas of Shri Mahipal Purohit and this amount is taxable in the 89,50,295 his hand vide CIT(A) order No. CIT(A)-39/IT-102/2012-13 dtd. 17- 12-2013) 89,50,295 Gross Total Income 2,50,000 Total Taxable Income 2,50,000 When this was pointed out to the learned CIT DR, he fairly conceded the position as the substantive addition has been confirmed in the hands of Shri Mahipal P Purohit. We find that the AO has rightly deleted the addition while giving the appeal effect to the order of CIT(A) in the case of Sh. Mahipal P Purohit, as the proactive addition has been confirmed. We find that the CIT(A) has wrongly confirmed the addition and AO has rightly deleted the addition while giving appeal effect to the order of CIT(A) in the case of Sh. Mahipal....
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....ssessee has reduced these expenses from work in progress in its books of account and it means that these expenses are claimed as part of expenditure except the amount of Rs. 6,00,000/- paid as brokerage to Shri Krishnan Iyer, which was disallowed 100%. The learned Counsel for the assessee admitted that the addition of Rs. 6,00,000/- is based on seized material relating to disallowance of this expense. He admitted that these other disallowances are adhoc disallowances and for non-deduction of TDS under various provisions of section by invoking provisions of section 40a(ia) of the Act. 15. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the above disallowances are not based on any evidence i.e. the incriminating material found during the course of search. As the original assessment has not been abated, we are of the view that the issue is squarely covered in favour of assessee by the decision of Hon'ble Bombay High Court in the case of continental Warehousing Corporation (Nhava Sheva) Ltd. (supra). We find that the assessee himself conceded that the disallowance of brokerage expenses paid to Mr. Krishnan Iyer amounting to ....
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....essee from its accounts which were available before the AO in the original return of income. According to the learned Counsel this issue is also covered by the decision of Hon'ble Bombay High court in the case of continental Warehousing Corporation (Nhava Sheva) Ltd.( Supra). 19. We find from the facts of the case that there is no incriminating material found during the course of search relating to these cash credits and accordingly, the issue is squarely covered by the decisions of Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. (Supra) as discussed in Para 5 and 6 of this order. Accordingly, this issue of assessee's appeal is allowed. Coming to cross appeals for AY 2007-08 in ITA No. 3710/Mum/2013 in assessee's appeal and ITA No. 3645/Mum/2013 in Revenue's appeal in the case of M.R. Construction 20. At the outset, the learned Counsel for the assessee stated that the assessee and Revenue has raised two common issue regarding disallowance of expense amounting to Rs. 1,03,34,780/- and also addition of unsecured loans as unexplained cash credit under section 68 of the Act amounting to Rs. 4,54,300/- confirmed by CIT(A) out of t....
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....incurred in cash exceeding Rs. 20,000 should not be disallowed under section 40A(3)." 22. In view of the above, the learned Counsel for the assessee stated that both the additions i.e. the disallowance of expense at Rs. 1,03,34,780/- is based on the accounts of the assessee from where the Special Auditor has mentioned the same in audit report and these are not related to any incriminating material found during the course of search. The AO has identified seven (7) cash creditors and adding a sum of Rs. 19,54,300/- out of which CIT(A) deleted the addition of unexplained cash credit at Rs. 15,00,000/- and sustain the balance addition of Rs. 4,54,300/- in the following names: - Dinesh Kumar Jain Rs. 1,00,000/- Vilas jadav Rs. 1,00,000/- Norangrai Bajaj Rs. 2,54,300/- 23. At the outset, the learned Counsel for the assessee stated on both the grounds addition is based on the accounts of the assessee and assessee has filed its return of income for AY 2007-08 on 15-11-2007 and no notice under section 143(2) was issued to the assessee on or up to 30-11-2008. It means that the return was processed under section 143(1) and no proceedings, whatsoever, was pending as on ....
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....Relief given by CIT(A) Balance amount after appeal effect 1. Excess Remuneration disallowed under section 40(b) 1,43,960 Nil 1,43,960 2 Disallowance u/s 40A(3) to the extent of 10,12,600 NIL 10,12,600 20% in case of Rs. 5,063,001Expenditure 3. Disallowance u/s 40(a)(ia) - non deduction of TDS Interest on Loan - Jawahar Purohit 11,50,309 11,50,309 Nil Section 194C - Transport 52,136 52,136 Nil Section 194J - Professional Charges 1,17,125 Nil 1,17,125 Interest on Loan -Asahi Infrastructure & Projects Ltd. 10,686 Nil 10,686 Disallowance under section 40(a)(ia) - Late Payment of TDS Section 194A - Interest on loans 4,12,416 Nil 10,686 Section 194C Contractor 78,06,579 Nil 78,06,579 Section 194J - Supervision Charges 2,55,100 Nil 2,55,100 Section 194H - Brokerage Expenses/ commission 2,50,000 Nil 2,50,000 Section 194J - professional charges ....
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....und during the course of search. As the original assessment has not been abated, we are of the view that the issue is squarely covered in favour of assessee by the decision of Hon'ble Bombay High Court in the case of continental Warehousing Corporation (Nhava Sheva) Ltd. (supra). We find that the assessee himself conceded that the disallowance of the amounts of Rs. 4,58,858/-, Rs. 9,00,000/- being disallowance of miscellaneous expenses being repayment of advance, Rs. 14,77,884/- being adhoc disallowance of expenses incurred on Kashish Construction are emanating out of seized material and hence, these are confirmed. We direct the AO accordingly. This issue of assessee's appeal is partly allowed. 29. The next issue in this appeal of assessee is against the order of CIT(A) confirming the addition made by AO of unsecured loans as unexplained cash credit under section 68 of the Act. For this assessee has raised following ground No.2: - "2. That the Assistant Commissioner of Income Tax, central circle-22, Mumbai has grossly erred in law and on the facts and circumstances of the case in making addition and the learned Commissioner of Income Tax (Appeals)-39, Mumbai has grossly....
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....6 of this order. Accordingly, this issue of assessee's appeal is allowed. In ITA No. 3646/Mum/2013 for AY 2010-11 in the case of M.R. Construction 33. The only issue in this appeal of Revenue is against the order of CIT(A) deleing the addition of Rs. 20 crores made by the AO on account of receipt of this amount under tripartite agreement dated 25-10-2009 for selling development rights. For this Revenue has raised following two grounds : - "1. That on the facts and circumstances of the case, the Learned CIT(A) erred in deleting addition of Rs.20 crores out of Rs.40 cores received by the assessee from M/s. Park View Developers under a tripartite agreement dated 25.10.2009 for selling development rights on the ground that the assessee had not made the performance as required under AS-9 on Revenue Recognition to recognize the consideration received of Rs.20 crores without appreciating that AS-9 had no application to the case of the assessee and that the sum of Rs.20 crores had been received by the assessee on sale of development right and not towards performance of any contract or meeting any obligation and liabilities under any contract whereas the balance sum of Rs.20 ....
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....t of the assessee firm Rehab building No. 4 has to be completed and also that all conditions of LOI have to be fulfilled by the assessee firm. The assessee firm is provided a consideration of Rs. 20,00,00,000/- for selling right to develop free sale building and towards completing responsibility as developer under LOI, d) On page 273-4 in clause 4 it has been noted that JV i.e. GM Construction is dissolved, it gives up all its rights in the SRA project and it has removed itself from the site and in consideration thereof it has been paid a consideration of Rs. 20,00,00,000/- independently. 35. The AO held that whole of the sum of Rs. 20,00,00,000/- being consideration to the assesse firm is income of the impugned year in which tripartite agreement was entered into. The AO held that the amount of Rs. 20,00,00,000/- is taxable in the impugned year. The reason as per the AO is that as per the JV agreement with Green bell Housing, all the responsibility for completion of the project is on the JV and not of the assesse and therefore no responsibility rests on the assessee. As no responsibility rests on the assesse firm, therefore whole of the amount is immediately taxable in ....
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....tain the sale proceeds thereof. The assessee before us claimed that grant of LOI by the SRA authority is the starting point for a developer. It is the scheme that though the SRA authority permits and grants proportionate FSI for free sale component in proportion to rehabilitation buildings completed but final separation of plot for rehabilitation building and free sale building with separate property card and occupation certificate for Free sale buildings is granted only after all the conditions of LOI are complete. We find from the entire scheme that Revenue in a SRA project is only from sale of development of free sale units and the same is an incentive for rehabilitating slums. For rehabilitation of slums, no separate consideration or cost is given to developer. To ensure that a developer does not enjoy incentive FSI before completion of rehabilitation, many checks and balances are provided under the scheme including the condition that developer under LOI cannot be changed and the liability of the developer as per LOI remains till the rehabilitation work is complete. Further, it is only on completion of rehabilitation work the property card for the plot of land is freshly issued....
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.... 2. Accordingly, we are of the view that principal amongst the conditions pending completion is construction of rehabilitation building no 4 and many temples and places of worship and the CIT(A) has rightly held that income under the tripartite agreement has not accrued to the assesse and no amount is taxable in the hands of the assesse in A Y 2010-2011. Accordingly, we confirm the order of CIT(A) and this issue of Revenue's appeal is dismissed. Coming to ITA Nos. 7208, 7209, 7210, 7211, 7212, 7213 & 7214 /Mum/2013 in assessee's appeals for AYs 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10 & 2010-11 respectively in the case of Jawahar B Purohit. 40. The two common & inter connected issues in theses appeals of assessee is against the order of CIT(A) confirming the action of the AO in issuing the net profit by applying 10% of the gross receipts and further not allowing telescoping effect of net profit addition against addition of negative peak giving effect to the balance of pulled cash account made by AO. For this assessee has raised following ground No. 1 & 3 : - "1. That the learned Assistant Commissioner of Income Tax, Central Circle 22, Mumbai and the learn....
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....artly allowed. These inter-connected common issues against the addition made by AO by estimating net profit at the rate of 10% of the gross receipts and the same is confirmed by CIT(A) which is challenged by assessee for AYs 2005-06, 2006-07, 2007-08, 2008-09, 2009-10,2010-11 and also claimed telescoping effect of net profit additions against additions on account of negative peak. 42. At the outset, the learned Counsel for the assessee fairly agreed that he has no issue in retaining the estimation of 10% net profit on gross contracts and particularly he has not challenged the rejection of books of accounts. When a query was put to the learned Sr. DR, he agreed that in case the net profit at the rate of 10% is upheld, the excess of the same can be given effect to telescope against other additions made on account of negative peak as raised by assessee in ground No. 3. 43. We have heared the rival contentions and gone through the facts and circumstances of the case. We find that this issue is dealt by CIT(A) in para 8 of his appellate order, wherein he has confirmed the action of the AO by rejecting the books of accounts and subsequently, upheld the estimation at the rate of 10%....
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.... made by the assessing authority is a bonafide estimate and is based on a rational basis, the fact that there is no good proof in support of the estimate is immaterial. To sum up, it is held that the accounts of the assessee were rightly discarded and the basis adopted for estimation of income has a relevant basis. The estimation is not arbitrary, but based on the peculiar fact as existing in this case." 44. We find from the comparative statement that the profit declared and adopted by the AO and confirmed by CIT(A), clearly spell out the additions, which is identical in all the orders and the same reads as under: - A.Y Gross Turnover Net Profit declared % of net profit declared Peak offered in ROI Peak accepted during assessment Total peak offered profit considering peak offer % of net profit Addition made by AO and confirmed by CIT(A) adopting NP rate of 10% 2004-05 2,32,59,516 8,77,786 3.79% 0 0 0 8,77,786 3.79% 14,48,166 2005-06 4,86,74,017 18,50,018 3.80% 0 0 0 18,50,018 3.80% 30,17,384 2006-07 3,02,89,790 11,60,339 3.83% 0 0 0 11,60,339 3.83% 18,....
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.... We direct the AO accordingly. 47. Similar is the position in all the years, taking a consistent view, we direct the AO to allow the excess of net profit addition to be set off against negative peak cash in the pooled cash account in all the years. We direct the AO accordingly. These two inter-connected issues of the assessee are allowed but for verification and giving effect to the excess profit additions to be set off against negative peak cash account, are referred back to the file of the AO. 48. The next issue in this appeal of assessee in ITA No. 7208/Mum/2013 for AY 2004-05 is as regards to the order of CIT(A) confirming the addition of adjustments made in working of negative peak amounting to Rs. 6,89,004/-. For this assessee has raised following ground No.2: - "2. That the learned Assistant Commissioner of Income Tax, Central Circle 22, Mumbai and the learned Commissioner of Income Tax (Appeals) - 39, Mumbai have grossly erred in law and on the facts and circumstances of the case in net decreasing and sustaining the net decrease, respectively, by adjusting the Cash Balance by Rs. 6,89,004/- thereby affecting the balance of "Jawahar B. Purohit - Pooled Cash Ac....
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....-06, the assessee had done contract work for M/s Shyona Corporation and received a sum of Rs. 6,89,004/- by cash in AY 2004-05 and Rs. 24,00,000/- for AY 2005-06. The assessee made a plea that for contract work, the contractor account given credit for such a long period. He also admitted that the said amount was reflected as sales and part of turnover on which net profit has been estimated by the AO @10% and the receipt of cash on two have been considered by the AO for preparation of pooled cash account. The learned Counsel for the assessee referred to the working of negative peak as per AO given at pages 180 to 225 of assessee's paper book 2 filed on 23-06-2017. He also referred to separate sheet attached at page 233 of assessee's paper book 2 which reflected this entry of Rs. 6,89,009/- The relevant statement reads as under: - S No. Nature of Transaction Page No. of Assessment Order Page No. of CIT(A) Date Amount of Adjustment Remarks 1 Sundry Debtors Page No. 12,Para 15 point iii) Page No. 9 ara 10.1 31-032004 6,89,004 This amount is on account of amount receivable from debtor shayona Corporation. Since the amount was received in cash, n....
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....e assessee stated that the assessee has borrowed from various persons aggregating to Rs. 11,02,652/- and reflected in the books of accounts prepared before search action under section 132 of the Act. The assessee explained the following details which reads as under: - Sr. No. Nature of Transaction Page No. of assessment order Page No. of CIT(A) Date Amount of adjustment Details Remarks 1. Unsecured loans Page No. 20 Page No.11, point c) of 9.3 01.04.2004 11,02,652 A.B. More 37,088 Originally the return of income filed under section 139(1), these loans were show as paid, but the bearer cheques were issued in their names and cash was withdrawan by the appellant. Confirmations were filed at the stage 153A proceedings confirming that the amounts were still outstanding. Akshar Construction co. 1,89,750 Amrut Engineers 3,30,625 Bhanwarlal Purohit 21,275 BhomaramjiGelaji 19,000 Hitesh H. Purohit 22,425 Rancchhodpurohit 22,425 Rohan & Associates 3,83,312 Shankar Shetty 20,700 Sharddha Construction co. 33,052 Varshasupeda 23,000 Total 11,02,652 ....
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....arly stated that the same are bogus bills procure by him to enable his client to make non-genuine as purchase of machinery and relevant copy of statement is enclosed at page 247 of the assessee's paper book and relevant question No. 13 at page 251 and 252 reads as under: - "Q.13. I am showing you blank letter heads and blank bills in the name of following entities impounded at page numbers from 83 to 94 of impounded material at Annexure 'A'. Blank Letter Heads 1. National Institute of Industrial Engineering. 2. Indian Institute of technology Bombay 3. R.C. Builders and Developers 4. Jasmine Enterprises Blank Bills 1. Metro Engineering works 2. Moolight Industries Pvt. Ltd. 3. Kohinoor sales corporation 4. R.H. Winsler Industries Ltd. 5. Rakesh Engineering Company 6. Jackson Engineers 7. Srikrishna Industries 8. Patel & Co. Please confirm that these have been recovered from your office premise. Are the above mentioned entities your clients to whom you render professional service? Please state the reason why these blank letter heads and blank....
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.....H. Winsher industries Ltd. Which is seized from Mr. S.R. Desai Office not from our office as we earlier also reply to special auditor and AO also that this invoices not belongs to us and this invoice never seized from us as we have never entered any transaction with the said party but AO think this invoice very much related to us and he reduced the cash balance with this amount which is wrong. Replay to of Mr. S.R. Desai to Q. No. 13 & 14 in his statement under section 133A on 16-11-2009 may be seen in which he has stated that these bills are bogus and no transaction has taken place. 3. Sundry Debtors Page No. 19,20 Page No. 10, point b) of 9.1 31-03-2005 24,00,000 This amount Is on account of amount receivable from debtor Shayona Corporation. Since the amount was received in cash, no evidence of receipt of money is available. 56. We have heard the rival contentions and gone the facts and circumstances of the case. We find that as regards to the loan brought from various persona and the same are depicted at page 234 of the assessee's paper book whereby the assessee has issued bearer cheques in their name and cash was withdrawn by the assessee and confirmati....
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.... as regards to the order of CIT(A) deleting the addition of Rs. 38,30,805/- made by the AO on account of agricultural income, not accepted and treated the same as income from other sources. For this Revenue has raised following two grounds:- "1. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting addition of Rs.38,30,805/- made on account of income from other sources declared by the assessee as agricultural income when the assessee had not produced any proof of land holdings." 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in holding that the proceedings are not open when the provisions of Sec.153A clearly empowers the Assessing Officer to issue notice and make assessment and to assess the total income of the assessee which includes disclosed as well as undisclosed income." 61. At the outset, the learned counsel for the assessee stated that the assessee has declared agricultural income in its return of income filed u/s 139(1) of the Act for AY 2006-07 as on 31-10-2006. No incriminating material found during the course of search and no proceedings were pending as on the date of search dat....
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....it - Pooled Cash Account" and further affecting the Peak Negative Cash in current and forthcoming assessment years." At the outset, the learned counsel for the assessee stated that the assessee has challenged the adjustment made by the AO to pooled cash account and consequential addition made to total income on account of negative cash in such pooled cash account. 65. The first adjustment made by AO to pooled cash account is on account of purchase of machinery on the basis of invoice found and impounded from S R Desai during simultaneous survey and search carried out at his place. The assessee contended that the AO may be directed to ignore the said amount of Rs. 10,18,660/- and not consider the same as outgoing in preparation of pooled cash account. The learned counsel for the assessee stated that this amount relates to assessee but Shri SR Desai vide question No. 13 and 14 of his statement recorded u/s 133A of the Act on 16-11-2009 categorically stated that these bills are bogus and no transaction has taken place. The assessee drew our attention to statement of addition and adjustment to peak working given at page 237 of assessee's paper book which reads as under: - 66. ....
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....back to the file of the AO. This issue of assessee's appeal is partly allowed. 71. The next issue in ITA No. 7211/Mum/2013 for AY 2007-08 of assessee's appeal is as regards to disallowance made in M. R. construction by giving consequential effect in working of negative peak. The learned Counsel for the assessee has not pressed this issue under the instructions of the assessee and hence, the same is dismissed as not pressed. 72. The next two interconnected issues in ITA No. 7212/Mum/2013 for AY 2008-09 of assessee's appeal are making addition to the negative peak account amounting to Rs. 1,75,56,162/- and adjustment made in working of negative peak to Rs. 37,88,147. For this assessee has raised following ground No. 2 and 3: - 2. That the learned Assistant Commissioner of Income Tax, Central Circle 22, Mumbai and the learned Commissioner of Income Tax (Appeals) - 39, Mumbai have grossly erred in law and on the facts and circumstances of the case in making and sustaining reduction, respectively, on account of Peak Negative Cash balance by Rs. 1,75,56,162/- thereby also affecting the Cash Balance in current and forthcoming assessment year. 3. That the learned As....
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....The assessee claimed that he had issued bearer cheques during the relevant previous year and cash was withdrawn and retained by him. However, in books of accounts, the bearer cheques were reflected as loan repaid. In re-casted books of accounts prepared post search action on the basis of which assessment has been made, the assessee has reflected correct state of affairs. Cash withdrawn by the assessee has been shown in cash account and loans are shown as outstanding. Also, confirmation letters of the lenders were also furnished. The AO has dealt with the issue on page 17-18 and the CIT(A) has dealt with the issue on page 16 in para 9.3.The assessee urged that the AO may be directed to consider cash withdrawn against bearer cheques of Rs. 4,85,000/- as available with him in computation of pooled cash account. We find that this amount of cash is available with assessee and it should be considered while computing cash adjustment in the negative peak in pool cash account. We direct the AO accordingly. 75. The next issue in ITA No. 7212/Mum/2013 for AY 2009-10 of assessee's appeal is as regards to disallowance made in M. R. construction by giving consequential effect in working of ne....
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....e cash account on account of additions of earlier years. We direct the AO accordingly. This issue of assessee's appeal is allowed. 79. The next issue in ITA No. 7214/Mum/2013 of assessee's appeal for AY 2010-11 is as regards to the addition made on account of negative peak of Rs. 41,24,256/- and adjustment made in working of negative peak of Rs. 23,19,367/-. For this assessee has raised following ground Nos. 2 and 3: - 2. That the learned Assistant Commissioner of Income Tax, Central Circle 22, Mumbai and the learned Commissioner of Income Tax (Appeals) - 39, Mumbai have grossly erred in law and on the facts and circumstances of the case in making addition and sustaining addition, respectively, on account of Peak Negative Cash Balance by Rs. 41,24,256/- thereby also affecting the cash balance in current and forthcoming assessment years. 3. That the learned Assistant Commissioner of Income Tax, Central Circle 22, Mumbai and the learned Commissioner of Income Tax (Appeals) - 39, Mumbai have grossly erred in law and on the facts and circumstances of the case in net decreasing and sustaining the net decrease, respectively, by adjusting the Cash Balance by Rs. 23,19....
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....ot lead to conclusion that the assessee has incurred unexplained expenditure of Rs. 44,71,000/- on 15.11.2009.The assessee prays that the AO may be directed to ignore the said amount as outgoing in considering pooled cash account. 82. After both the sides and going through the facts of the case, we direct the AO to allow the claim of the assessee and consider the availability of actual cash found of Rs. 11,00,750/- and Rs. 14,34,000/- and the same can be given effect to the cash. It does not lead to the fact that the assessee has incurred unexplained expenditure of Rs. 44,71,000/- and we accordingly delete the addition. This issue of assessee's appeal is allowed. 83. In the result, in the case of M.R. Construction of assessee's appeal in ITA Nos. 790 & 3710/Mum/2013 for AYs 2005-06 & 07-08 are allowed, in ITA Nos. 3709 & 3711/Mum/2013 for AYs 2006-07 & 08-09 are partly allowed and in Revenue's appeal in ITA No.1144,3645 & 3646/Mum/2013 for AYs 2005-06, 07-08 & 10-11 are dismissed. In case of Jawahar B. Purohit of Revenue's appeal in ITA Nos. 6847 & 6848/Mum/2013 for AYs 2005-06 & 06-07 are dismissed and of assessee's appeal in ITA Nos. 7208,7209,7210,7211,7212,7213 & 7214/Mum....
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.... Remarks adjustme nt tion nt Order (A) 1 Unacco 14,15,16 Page 28-11- 16,52,036 unted No. 2007 Purchas 15,16 e of Para Machine 9.3 ry This is invoice of Kamal Industries, Which is seized from Mr. S.R. Desai office not from our office as we earlier also replay to special auditor and AO also that this invoices not belongs to us and this invoice never seized from us as we have never entered any transaction with the said party but AO think this invoice very much related to us and he reduced the cash balance with this amount which is wrong. Replay to of Mr. S.R. Desai to Q. No. 13 & 14 in his statement u/s 133 A on 16-11-2009 may be seen in which he has stated that these bills are bogus and no transaction has taken place. Document 4 N Sundry 16, 18 Creditor Page No. 15,56,011 Date Name of Party Amount 26-10-07 16, Para 9.3 Simplex Enterprise 26-10-07 Simplex 4,00,000 4,17,000 05-02-08 23-02-08 Enterprise Vinit Transport Vinit 3,00,000 04-10-07 Transport Bhavani Enterprise 2,00,....