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TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 1723
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....crutiny and the assessment was completed u/s 143(3) by an order dated 30. 03. 2015 on total income of Rs. 54, 35, 450/-. During the assessment proceedings, the Assessing Officer (AO) found that the assessee had admitted the turnover of Rs. 1, 20, 00, 000/- and declared the loss of Rs. 4, 89, 699/-, as per the audited books of accounts u/s 44AB of the Income Tax Act, 1961 (hereinafter called as 'Act'). During the pendency of scrutiny assessment proceedings, the assessee declared the additional receipts of Rs. 50, 44, 750/- and the 'deemed profit' of Rs. 4, 03, 580/- thereby declared the gross turnover at Rs. 1, 70, 44, 750/- (1, 20, 00, 000+50, 44, 750). The AO called for the explanation of the assessee to explain as to why the entire additional receipts of Rs. 50, 44, 750/- should not be assessed to tax as undisclosed income. The assessee did not furnish any explanation with relevant evidences to show that the sum of Rs. 50, 44, 750/- was the business receipts and the assessee had incurred the expenditure relating to the additional receipts declared during the assessment proceedings. However, the assessee appeared before the AO on 27. 03. 2015 and filed a letter accepting the addit....
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....ere not accounted in construction account. It was submitted by the Ld. A. R that the assessee is maintaining the regular books of accounts for construction activity but not maintaining the accounts for civil contract works. Therefore, argued that it would be judicious to tax the income on estimation at 8% as per section 44AD of the Act on civil contract receipts. Similarly miscellaneous unrecorded credits of Rs. 2, 76, 520/- was also included by the Ld. CIT(A) which should not have been brought to tax , as they do not represent the income for the impugned assessment year. According to the Ld. AR, the assessee has maintained the complete books of accounts for construction activity with regard to the turnover of Rs. 1, 20, 00, 000/- and book results should be accepted for the construction activity. With regard to receipts of Rs. 40, 00, 000/-, the same represented the customer advances which should not be included in the gross contract receipts, since the work was not completed. Thus, argued that the estimation of income on Rs. 40, 00, 000/- is arbitrary and unjustified. In respect of Rs. 50, 44, 750/-, miscellaneous receipts, requested for estimation of income @8%. The Ld. AR furthe....
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....ssee has not brought on record any evidence to show that the AO has pressurized for admission of additional income. From the facts on record it is established that the assessee had voluntarily admitted the income and there was no truth in the assessee's argument that the admission was given by the assessee on the pressure of the AO. This fact was found correct by the Ld. CIT(A) after verification of the records. For ready reference we extract relevant part of the Ld. CIT(A) order which reads as under : "4. 3. I have considered the submissions and details filed, I have also perused the assessment folder. As stated above, the assessee in his statement of computation of income shown income u/s. 44AD of Rs. 4, 03, 580/- (with reference to 8% of gross receipts of 50, 44, 750/-) income from contract business at Rs. 4, 89, 699F, income from consultancy profession at NH, and has shown gross total income of Rs. 893, 279/-, and after claiming deduction u/s. 80C of Rs. 99, 000/- declared total income of Rs. 7, 94, 279/-. An income and expenditure statement was also enclosed wherein the gross receipt was shown at Rs. 1. 20 crores and net income shown at Rs. 4189, 699/-. In regard to the gros....
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....9;s request the AO had suggested voluntary compliance and assisted in drafting the letter as the assessee was not accompanied by his auditor on that date. If the AO had really exercised coercion and threat as alleged then the said draft would not have been allowed with the assessee. The manner in which the letter was written legibly also do not indicate that the person who had written the letter was under coercion or duress. Even If the contention of threat and coercion were to be believed, it is not known what prevented the assessee from filing a letter of retraction on the very next day, No explanation was given as to why Letter of retraction could not be filed on the very next date. It is settled principle of law that a retraction to an admission has to be made as and when the threat or coercion had ceased to exist. The fact that the assessee had not chosen. to file a retraction letter immediately, also suggest that there is no truth in these contentions and allegations, and that khese contentions and allegations are mere afterthought made to suit the asessee's convenience. The assessee has filed an affidavit dated 22. 8. 2015 only during the appeal hearing, after a lapse of....
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.... contention was that the receipts from his contract business relating to 'Star Residency' was credited in a separate bank account (SBI A/c. No. 31615659748) which account was said to be audited, and that the receipts declared u/s 44AD were credited into other bank account ( i. e. 531 A/c No. 10012558333 & ING Vysya Bank A/c No. 742010022818) and which income was estimated and the said accounts were not audited. However, the perusal of the audited Balance Sheet show that the closing balance as on 313. 2012 in 531 A/c No. 10012558333 & ING Vysya Bank A/c. No. 742010022818 were also reflected therein. It is also noticed that the assessee had made payment for purchase of car from this 531 A/c No. 10012558333, and the depreciation of the car has been claimed in P & L Account, and the asset declared in the Balance Sheet. The liability towards car loan with Axis Bank was shown in the audited balance sheet though the payment to the car loan was through SB A/c. No. 10012558333. It is also seen that the From 3CD report qualifies that 'sundry debtors are subject to confirmation. However, the audited balance sheet does not show any sundry debtors. Thus, it is apparently seen that t....
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....ork was found to be Rs. 60, 71000/- (Rs. 50, 44, 750 + Rs. 7, 50000 + Rs. 2, 76, 250) and the aggregate receipts come to Rs. 2, 13, 21000/- and it would be fair and reasonable to estimate income at 12% on such receipts, which work out to Rs. 25, 58, 520/. The AO also may take into account the bank interest not declared of Rs. 40, 300/- and re-compute the total income accordingly. 6. 4. During the appeal hearing, the Ld. AR canvassed for estimation of income @8% on gross contract receipts and to exclude the sum of Rs. 40, 00, 000/- stated to be advances received from the customers. The Ld. AR also argued the said receipts of Rs. 40, 00, 000/- were received on 28. 03. 2015 and it is unjust to hold the same as receipt includible in gross receipts since the assessee is following stage to stage completion of work. 6. 5. We have considered the submission of the Ld. AR and observed that the assessee has not declared the contract receipts correctly. The fact that the assessee has declared additional contract receipts only after taking up the case for scrutiny established that the assessee is suppressing the receipts and the books of accounts does not show true and correct financial tran....