TaxTMI 
TaxTMI 
2016 (1) TMI 1323
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....come Tax Act, 1961 (in short 'the Act') was carried out at its premises as on 6.3.2009. During the course of survey, certain incriminating documents were found and the assessee surrendered an amount of Rs. 90,00,000/- at the time of survey. The assessee disclosed the same in its return of income. However, the assessee showed this amount of Rs. 90,00,000/- as its project cost. When asked about it by the Assessing Officer, the assessee explained that this amount was declared during the course of survey and so it was included in the project cost. The Assessing Officer was not satisfied by this explanation, though he completed the assessment at an income of Rs. 90,12,340/- as against returned income of Rs. 90,00,000/- making certain minor additions. He, simultaneously reduced this amount of Rs. 90,00,000/- from the total project cost shown by the assessee. 4. Before the learned CIT (Appeals), the assessee contended that it is settled law that whatever surrender is made either under stock in trade or in project cost or in any unexplained investment, then the said surrendered amount has to be added in the said closing stock or project cost or expenditure head with the surrende....
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....ressed. 7. As regards the amount of Rs. 90,00,000/- surrendered during the course of survey, it was submitted that the assessee has been following project completion method, since the surrender was made on account of unexplained expenditure, therefore, naturally the amount so surrendered should form part of project cost. 8. The learned D.R. relied on the order of the learned CIT (Appeals), specially page 4, para 4.3 and further stated that by treating the surrendered income as part of the project cost, the assessee will be entitled to adjust the same against incomes generated in later years and in this way, its tax liability in later years will get reduced, which is not permissible as per law. 9. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. In view of the fact that the learned counsel for the assessee has not pressed ground No. 2(a), all other grounds relate to the surrendered amount of Rs. 90,00,000/-, the only issue to be decided by us is whether the amount of Rs. 90,00,000/- surrendered by the assessee during the course of survey be formed part of its project....
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....rendered income in the project cost on the one hand and paying taxes on such income on the other hand, would amount to nullifying the effect of surrender, as the assessee will take benefit of the same in succeeding year, is correct. In view of the above, the action of the Assessing Officer in not allowing the surrendered amount to be considered as project cost is found to be correct. 11. The appeal of the assessee is dismissed. ITA No. 1352/Chd/2012 (Assessee's appeal) : (Progressive Promoters & Developers) 12. It is relevant to observe here that the facts and circumstances of this case are similar to that of RKM Housing Ltd. in ITA No. 1351/Chd/2012 and the findings given in ITA No. 1351/Chd/2012 shall apply to this case also with equal force. ITA No. 816/Chd/2013 : (Revenue's appeal) (RKM Housing Ltd.) 13. This is an appeal filed by the Revenue against the order of the learned CIT (Appeals), Chandigarh dated 2.5.2013, whereby he has deleted the penalty amounting to Rs. 29,99,700/- levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act'), in the background of the facts as stated in ITA No. 1351/Chd/2012....
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.... been assessed at the same amount. The only dispute is with regard to the amount being treated by the assessee as a part of its project cost. The issue has been decided by us against the assessee in appeal No. 1351/Chd/2012. However, we do not find any reason to uphold the levy of penalty in such circumstances. The assessee has made a claim by treating the surrendered income as a part of its project cost, which has been declined by the Assessing Officer. There is a difference of opinion between the assessee and the Assessing Officer. This is neither a case of concealment of income, nor furnishing of inaccurate particulars. The assessee has disclosed every thing properly. Our view gets support from the judgment of the Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC). 19. In view of the above, we uphold the action of the learned CIT (Appeals) in deleting the penalty. 20. The appeal of the Revenue is dismissed. ITA No. 817/Chd/2013 (Revenue's appeal): (Progressive Promoters & Developers) 21. It is relevant to observe here that the facts and circumstances of this case are similar to that of RKM Housing Ltd. in ITA No....
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....icer: Date Particulars Amount 31^st Jan 2009 Opening Balance Cash withdrawn from banks 1^st Feb 2009-18^th Feb 2009 34,37,477/- 13,45,300/- 25th Feb 2009 Cash Receipt against booking Flats Total 11,00,000/- 58,82,777/- 1^st Feb 2009- Cash Payments/deposits to 25^th Feb 2009 Parties and banks Balance on 01^st Mar 2009 6,43,500/- 52,39,277/- 1^st Mar-6^th Mar 2009 Additions 90,000/- 1^st Mar-6^th Mar 2009 Withdrawal 48,500/- Balance as on 06/03/2009 52,80,777/- As stated by Mr. Ashok Kukreja that the cash in hand on 06/03/2009 is Rs. 3,50,000/- but as per books of accounts it was Rs. 52,80,777/-. He gave the statement only on the estimated basis not as per the books of accounts. Further Rs. 49,30,777/- was kept with Mrs. Meena Kukreja for business activity at her residence to avoid any kind of theft in the office which was not in the knowledge of Mr. Ashok Kukreja and the cash in hand as per cash book as mentioned above was utilized in the subsequent months for the business activities of the firm." 3.3 I have considered the submiss....