TaxTMI 
TaxTMI 
2018 (5) TMI 1382
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....ent Contractor. The assessee's representative has attended the proceedings before A.O. time to time and filed the necessary details which have been perused by the A.O. and placed on record. The A.O. thereafter, discussed the case in the assessment order. A survey under section 133A was conducted on 12th August, 2009 on the assessee, the basis of which, was the bogus billing racket wherein it was admitted that M/s. S.R. Industrial Corporation had given bogus bills to the assessee-company in A.Y. 2006-2007 amounting to Rs. 37.9 lakhs. The assessee admitted the same and surrendered this amount. Further, a diary was found at the premises of the assessee at Janak Puri, Delhi which was written in handwriting of the assessee. In this diary, the assessee had written various entries amounting to Rs. 4.52 crores which the assessee has admitted to be advances for purchase of land/machinery through brokers paid from unaccounted income not reflected in his books of account of any of the concerns of the group. The assessee has made surrender of Rs. 2.05 crores under section 41(1) of the I.T. Act on account of liabilities that are no longer required to be paid under the Head "Remission of Liabili....
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.... of the assessee in the assessment order in which assessee again submitted that no unaccounted income is admitted and books of account with audit reports have been produced. Surrender was extracted by survey party under duress. The assessee still surrendered 8% as net profit subject to no penalty/prosecution proceedings. The A.O. therefore, noted that assessee has not given any satisfactory explanation, therefore, rejected the books of account under section 145(3) of the I.T. Act. The A.O. noted that material available on record has been examined by him and estimate is made by him on the basis of seized document and unconditional surrender made during the course of survey. The A.O. accordingly, made the addition of Rs. 4.52 crores to the returned income which is inclusive of the surrender made by the assessee during the course of assessment proceedings. 5. The A.O. also noted that there is a difference of Rs. 1,08,003/- pertaining to the confirmation called for in the case of Graphite India Ltd., which has not been explained. Therefore, further addition of Rs. 1,08,003/- have been made. Both the additions were challenged before the Ld. CIT(A). 6. The Ld. CIT(A) as regards add....
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....orders of the authorities below and submitted that A.O. and the Ld. CIT(A) have confirmed the addition based on the admission made by the assessee in his statement recorded during the course of survey. The assessee did not produce the books of account before A.O. Ld. D.R. submitted that statement made under section 133A could be relied upon for the purpose of assessment because assessee has not offered any satisfactory explanation regarding surrendered amount. Ld. D.R. in support of his contention has relied upon decision of the Hon'ble Supreme Court in the case of M/s. Pebble Investment & Finance Ltd., vs. ITO 2017-TIOL-238-SC confirming the decision of the Hon'ble Bombay High Court in the case of same assessee reported in 2017-TIOL-118-Bom. He has relied upon the decision of Hon'ble Delhi High Court in the case of Raj Hans Towers (P.) Ltd., vs. CIT 373 ITR 9 and Pr. CIT vs. Avinash Kumar Setia (2017) 81 taxmann.com 476 (Del.). 9. We have considered the rival submissions and material available on record. The assessee-company is engaged in the business of manufacturing and Government Contractor. During the course of survey, a diary was found at the premises of the assessee-compa....
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....assessment stage and rejected books of account of assessee under section 145(3) of the I.T. Act, but, later on, A.O. did not estimate the income of assessee based on books of account, but accepted the surrender of Rs. 4.52 crores so surrendered during the course of survey. The assessee on the other hand, has pleaded that books of account have been produced before A.O. Therefore, there is contradiction in the statement of assessee and findings of the A.O. The A.O. also noted in the assessment order that at the time of reconciliation books of account of the assessee may not be ready by that time. These facts, therefore, clearly show that the matter requires reconsideration at the level of the A.O. because if the A.O. wanted to rely upon the seized material, he has to compute the income based on the seized material. However, nothing has been done in the matter. The A.O. ultimately did not discuss anything of the seized material except reproducing the scanned copy in the assessment order, but, ultimately accepted the surrender made by the assessee during the course of survey. The Department in its circular have emphasized time to time that the Income Tax Authorities should not try to e....
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.... Rs.26,69,410/- And Old balance of the creditors Rs. 52,020/- 12.1. The A.O. noted that during the course of survey assessee has surrendered the amount of the creditors under section 41(1) of the I.T. Act. The Ld. CIT(A) noted that he has decided group appeals in the case of M/s. Vichitra Prestressed Udyog Pvt. Ltd., and in the case of assessee M/s. Vichitra Construction Pvt. Ltd., in A.Y. 2009-2010 and accordingly, this ground was dismissed. 13. Learned Counsel for the Assessee at the outset submitted that the ITAT, SMC Bench in the case of same assessee M/s. Vichitra Construction Pvt. Ltd., New Delhi vs. DCIT, Circle-17(1), New Delhi in ITA.No.72/Del./2015 for A.Y. 2009-2010 vide order dated 13th July, 2016, deleted similar addition. The findings of the Tribunal in paras 2 to 5 are reproduced as under : "2. The only issue involved in this appeal, filed by the assessee, relates to the sustenance of addition of Rs. 22,47,662/- made by the AO u/s 41(1) in respect of following creditors : Sr. No. Name & Address of the creditor Amount 1 Integral Screw 8,35,000 2 Rahul Enterprises 7,12,662 3 Purnaa Eco System 7,00,000 ....
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.... Therefore, following the same, we set aside the orders of the authorities below and delete the entire addition. In the result, this ground of appeal of assessee is allowed. 16. In the result, ITA.No.71/Del./2015 of the assessee is allowed. ITA.No.74/Del./2015 - Vichitra Prestressed Concrete Udyog Pvt. Ltd., - A.Y. 2009-2010 17. This appeal by assessee has been directed against the order of the Ld. CIT(A)-19, New Delhi, Dated 1st October, 2014, for the A.Y. 2009-2010 in which the assessee challenged the addition of Rs. 94,46,280/- on account of two creditors under section 41(1) of the I.T. Act namely Rahul Enterprises Rs. 9,62,845/- and Integral Screw Rs. 87,83,435/-. Ld. CIT(A) dismissed this ground of appeal of assessee following the order in group cases mentioned above. 18. Learned Counsel for the Assessee submitted that this issue is same as has been considered in ITA.No.71/Del./2015 for the A.Y. 2008-2009 in the case of M/s. Vichitra Construction Pvt. Ltd. Following the reasons for decision in the case of M/s. Vichitra Construction Pvt. Ltd., (supra), we set aside the orders of the authorities below and delete the addition. 19. In the result, ITA.No.74/Del./2....