TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 868
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....it was found that the assessee had received cash advances amounting to Rs. 8,00,02,000/- from 43 persons during financial year 2010-11. On examination, it was found that the assessee had received such amounts by doing transactions outside its books of account, as these were not recorded in the assessee's regular books of account. The assessee was confronted with and asked to explain, by the Survey Party, such significant discrepancies involving cash receipt of Rs. 8,00,02,000/- as per the notations appearing in the said document, i.e., ledger marked as Annexure A-4. The assessee was further asked to explain whether the amounts were recorded in the books of account. However, the assessee could not furnish any explanation about the non-inclusion of such amounts in its regular books of account, and besides, the assessee had also shown its inability to provide the necessary details as to the identity and addresses of such 43 persons against whose names the assessee had recorded the receipt of amounts totaling Rs. 8,00,02,000/-. The assessee, through its Director, had come forwarded and surrendered the said sum as its unexplained/ undisclosed income for the relevant year. A statemen....
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....stock for the assessment year 2012-13 to the assessee in respect of Rs. 6 Crore on the ground that it was never stated in the statement recorded that there was any investment which was made in the value of building construction under progress as shown by the assessee. 3. The ld. CIT(A), dismissing the assessee's appeal, observed as follows: "5. I have considered the facts of the case, the written submissions as filed by the Ld AR for the appellant and perused the order of the AO with relevant facts on record Besides, the report as submitted from the AO and rejoinder on same as filed by the Ld AR have also been considered. It is an admitted fact that the appellant had surrendered the amount of Rs. 8,00,02,000/- in respect of money received from various persons which were found unrecorded, and admitted to be received by the appellant outside its books of account. However, it is equally true that the director of the appellant company Sh. Rakesh Mangal had never stated or even for that matter before the AO, during the course of assessment proceedings that amount received from various persons and surrendered as undisclosed income was invested in work in progress of Maruti City projec....
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....o the extent of Rs. 34.75 lacs. Similarly in the project Maruti Residency. the expenses incurred during the year under appeal is Rs. 1 whereas the architect Shri Amit Juneja of AADHARSHILA' has certifed the investment to the extent of Rs. 2.47 Cr. Thus the investment in both the projects certified by the appellant's own architect are not matched with the investment as claimed by the appellant. The claim of the appellant regarding investment of Rs. 6 Cr. in Maruty City as per survey is not found acceptable in view of the certificate of the appellant's own architect who has certified the investment in Maruti City' project only at Rs. 34.75 lacs. Since the investment in both the projects are not commensurate with the appellant's own evidence, then how the benefit of Rs. 6 Cr. out of the surrendered income claimed to have en invested in closing stock of work in progress in the project Maruti City can be claimed or for that matter could be allowed by the AO. It is relevant to mention here that if the assessee plea that out of surrendered amount, Rs. 6 crore is invested in closing stock, it would be a case of retraction of statement of surrendered given by the Dire....
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....understood that how the AO could disallow the other balancing part of the same income which is the investment in Maruti City Project. The Assessing Officer cannot have two yard-sticks to assess the income of the assessee. The statements and facts have to be accepted in totality and not in piece-meal as suits the Assessing Officer. The assessee has followed the provisions of the Companies Act and that is why both the entries of income are on the credit side and in the debit side, the balancing entries for the same in cash account and in work done account have been passed. It is further claimed that once the assessee is in the construction business, the unaccounted amount which is surrendered is obviously on account of construction activity and, therefore, the same is shown in the trading account as investment in Maruti City Project and, accordingly, taken to the closing stock as arising out of the surrender shown in the Trading Account. 5. The Survey Team found advances from customers, of Rs. 8,00,02,000/-, which were not recorded in the books of account and, correspondingly, the AO allowed the introduction of cash of Rs. 2.00,02,000/-. He, however, denied the claim of investment o....
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....gress of Maruti City project. In this regard, it is the submission of the assessee no question was asked by the survey party with regard to investment done and further, before the AO, in the assessment proceedings, it is clearly mentioned by the assesse that the advances received have been invested in the project under consideration during the period itself, as per para 3(iv) page 2 of the A.O's order. 8. The Ld. CIT(A) has further stated in para 5.1 of his order, that the amount invested in Maruti Residency project, as certified by the assessee's architect, is Rs. 4.25 crore and the investment done in F.Y. 2010-11 is Rs. 2.47 crores, as per the certificate. It is also mentioned that in another certificate of Maruti City project, the investment shown by the architect is Rs. 34.75 lacs only. The certificate are at PB pages no. 42-45, however it is seen from these certificates that the amount taken as investment in Maruti City project at Rs. 34.75 lacs, is only in respect of 7 row houses, where the construction was done during the year, and not on the entire Maruri City project. The Maruti City project of the assesse consisted of different type of structures being - duplex....