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2018 (11) TMI 1637
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.... facts of the case in restricting the addition to Rs. 11,27,363/- as against original addition of Rs. 37,57,877/- made by the AO on account of unaccounted purchases. 2. The Ld CIT(A)-II, Rajkot has erred in law and on facts of the case in deleting the addition of Rs. 1,34,64,877/- made by the Assessing Officer on account of alleged sundry creditors proved bogus. 3. The Ld CIT(A)-II, Rajkot has erred in law and on facts of the case in deleting the addition of Rs. 1,02,29,487/- made by the AO on account of amount deposited in bank account remained unexplained. On the facts of the case, learned CIT(A) ought to have upheld the order of the A.O. It is, therefore, prayed that the order of the learned CIT(A)-II, Rajkot may be set-side and that of Assessing officer be restored." Ground No.1 & 2 of the assessee and Ground No.1 of Revenue: 3. Apropos these cross grounds being related to a single issue, we have heard the arguments of both sides and carefully perused the relevant material placed on the record of the Tribunal. The ld. Assessee's Representative (AR) submitted that the assessee stranded housing project for low income category people, whic....
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....remains unexplained therefore, he was right in making addition/disallowance in this regard. The ld. DR also submitted that the ld. CIT(A) has granted relief to the assessee without any basis and justified reason therefore, impugned order may kindly be set aside by restoring that of the AO. 5. Placing rejoinder to the above, the ld. AR submitted that from the relevant para 3 of the assessment order, it is amply clear that the assessee made a claim relating to expenditure but the AO in the show cause notice considered the wrong aspect of claim and in the show cause notice alleges the claim as purchases by the assessee and ignoring the reply of the assessee dated 15.12.2008 in the last operative part further made disallowance alleging the same as unexplained purchases, which shows casual approach of AO regarding facts of the case while making disallowance/addition and such action of the AO based on irrelevant and incorrect facts cannot be held as valid and sustainable. The ld. AR also contended that the ld. CIT(A) accepted all the contentions of the assessee and noted that the accounts maintained by the assessee in accordance with the method consistently followed and accepted by th....
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.... correctness of transactions and also find relevant details the appellant also furnish ID for the details for each and every expenses she also file detailed addresses of suppliers she also allowed on the decision of Vishal infrastructure Ltd. 187 TTJ 484 (Hyd.) there it was held that the you accept the fact of expenditure or out of subcontractors and does the non availability of watches of expenditure incurred by subcontractors with SSC could not be a reason for rejection even in the government offices most of the expenses which were pretty in nature and which involved casual labour would be expected to have been self made watches these authors could only be Justified through circumstantial evidences. Resonableness of the claim of the expenditure under each head might be the matter of adjudication, but not rejection of books. The accounts maintained by the assessee in accordance with method consistently followed and accepted by the Department for the last seven years could not be rejected without there being material change in facts, more so, when such accounts were audited under the Companies Act and Income Tax Act and no specific defects were ppointed by the Assessing Officer. Th....
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....e, we also agree to the conclusion drawn by the ld. CIT(A) that the disallowance of 30% of claimed expenses is suffice to meet the ends of justice as this amount covers all the possible leakage of revenue in consequent to the non availability of the relevant vouchers and other documents for verification by the Revenue authorities. Therefore, we are inclined to hold that the conclusion drawn by the ld. CIT(A) in restricting the disallowance to 30% of total claim is quite correct and justified. There is no valid reason to interfere with the said findings recorded by the ld. CIT(A) and thus, we uphold the same. Consequently, sole ground of the assessee and ground No.1 of Revenue are dismissed. Ground No.2 of Revenue: 9. Apropos this ground, we have heard the arguments of both sides and carefully perused the material available on the record of the Tribunal. The ld. DR submitted that the Ld CIT(A)-II, Rajkot has erred in law and on facts of the case in deleting the addition of Rs. 1,34,64,877/- made by the Assessing Officer on account of alleged sundry creditors proved bogus. Supporting the assessment order, the ld. DR submitted that the assessee has not produced any books of acco....
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....impugned depositors/sundry creditors, in fact, did not represent the sale proceeds and represents the unaccounted income of the assessee shown in the balance sheet in the garb of sundry creditors on account of booking or allotment or sales of units/flats. Therefore, the ld. CIT(A) was right in holding that without any concrete material or evidence showing unexplained or unaccounted income of the assessee introduced in the cover of sundry creditors, the addition made by the AO merely on the basis of suspicion, presumption and assumption cannot be held as sustainable. 12. At the same time, it is relevant to note that from para 3 of the impugned order, we observe that the ld. CIT(A) has called the assessee to submit all the details of transaction with each and every creditor which was submitted by the assessee and reproduced by the ld. first appellate authority in para (c) at pages 6 to 11 of the first appellate order. Thereafter, the ld. CIT(A) issued notices u/s. 133(6) of the Act to nine major parties/sundry creditors and all the parties replied to the notice and copies of their replies were verified by the ld. CIT(A) in the subsequent paras of impugned order, which shows the ex....
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....ich were duly submitted by the assessee about the deposits in the bank account which has been produced in para (cb) at page 18 of the first appellate order supported with the source of deposits in the said three accounts. The ld. AR also submitted that the assessee has explained the source of all deposits along with supporting evidences discharging the primary onus lay on her shoulders. He further submitted that the booking advances have been shown as sales int eh subsequent assessment years and in subsequent TY 2008-09 & 2010-11 scrutiny assessment have been made without any addition and accepting the sales against which the amounts were received and deposited by \the assessee to these bank accounts. The ld. AR finally submitted that the allegations of the AO have no legs to stand on the factual matrix of the case and after calling the all details and relevant documentary evidence and after property examining and verifying the same the ld. CIT(A) has granted relief to the assessee therefore, impugned order being sustainable may kindly be upheld by dismissing ground of Revenue. 18. On careful consideration of above rival submissions, from the first appellate order, we observe th....
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....added it is not correct the I also did not give any finding on the genuineness of the house by years he would not have any position to comment about the genuineness of these by us as he failed to carry out some sort of enquiries with the house buyers of these projects. In a nutshell, the amount added and acid as 'unexplained sundry creditors' contained the sum of Rs. 1,02,29,487/- added by the way as 'unexplained Bank deposits' without any incriminating material on the recorded to show that both are of different amounts it is very difficult to sustain this edition the addition is deleted." 19. In view of above findings recorded by the ld. CIT(A), first of all, we may point out that the ld. CIT(A) has called all the details from the assessee regarding deposing to all three bank accounts which were submitted by the assessee and have been reproduced in para (cb) at page 18 to 21 of the first appellate order. The ld. CIT(A) thereafter, noted that the assessee deposited total Rs. 48,83,460/- cash amount to these three bank accounts and the source of the same has been explained as the amounts received on account of advances received from the prospective buyers of flats/units in the tw....