TaxTMI 
TaxTMI 
2020 (12) TMI 298
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.... 2.1. The CIT (Appeals) failed to consider the details of the construction done by M/s. Rajkishore Engineering and Constructions Pvt.Ltd. for the assessee company as also the fact that whether M/s. Rajkishore Engineering and Constructions Pvt.Ltd. had admitted this amount as its income remains unexplained. 2.2. The CIT (Appeals) failed to give an opportunity to the Assessing Officer as envisaged in rule 46A of I.T.Rules, 1962 for examination of evidence furnished by the assessee company during the appellate proceedings." 3. Brief facts of the case are that the assessee company is in the business of construction and flat promotion filed its return of income for the assessment year 2015-16 on 02.11.2015 admitting total income of Rs. 1,32,530/-. The case has been selected for scrutiny and assessment has been completed u/s.143(3) of the Act on 19.12.2017 and determined total income at Rs. 5,77,38,600/- by making the following additions:- 1. Disallowance of expenses : 92,75,428 2. Disallowance of interest : 51,90,715 3. Disallowance u/s.68 : 3,98,00,000 4. Difference in sale consideration: 5,45,934 5. Disallowance of service tax c....
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....apitalized included this liability and other amounts due to the promoter group totaling to Rs. 3,98,00,000/-. In support of which, the relevant documents filed with Ministry of Corporate Affairs such as Form SH7 and PAS-3 are furnished for my perusal. The authorized representative has clarified that there are two different loans, the first loan was taken by RKD directly from Capital First during February 2013 amounting to Rs. 3,92,00,000/- vide LAN-1199126 and second loan was taken by promoter group, also from Future Capital for an amount of Rs. 3,57,89,0001- vide LAN-1016782. It is further explained that the loan taken by RKD (appellant) was recorded as secured loan in RKD books and the loan taken by promoter group along with other amounts due to them was capitalized. According to authorized representative, the assessing officer had mis-construed that there was only one loan and treated the amount of liability taken over by RKD from RKECPL, which was converted as capital to be unexplained credit u/s.68. Thus, the authorized representative vehemently argued that the inference drawn by the assessing officer is wrong as the source for introduction of capital to the tune of Rs. 3,98,0....
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....ce made u/sAO(a)(ia) to 30% of the expenditure claimed at Rs. 51,90,715/-, which comes to RS.15,57,215/-. The appellant gets relief of Rs. 36,33,500/- on this count. The ground taken is partly allowed. 9. The third ground is directed against addition made at Rs. 92,75,428/- on account of disallowance of operating expenditure. The assessing officer has stated that the appellant has produced a single bill copy in support of the expenditure claimed towards payment of construction cost to its associate concern RKECPL at Rs. 4,63,77,138/- and as details such as nature of work done, date and mode of payment, etc are not furnished and therefore, the assessing officer has disallowed 20% of the said expenditure, which comes to Rs. 92,75,428/- has been disallowed. On the contrary, the authorized representative Shri. B. Baladasan, Chartered Accountant has submitted that the RKD has issued contract in the form of work order to RKECPL to construct the building for a project that is currently undertaken. The progress of work carried out by RKECPL and the related value of work completed by RKECPL for assessment year under consideration has been conveyed to RKD through the invoice issued ....
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....to Rs. 34,78,285/-. The appellant gets relief of Rs. 57,97, 143/- on this count. The ground taken is partly allowed." 4. The learned DR submitted that the learned CIT(A) has erred in deleting the amount credited to the bank account of M/s. Rajkishore Engineering and Constructions Pvt.Ltd. was adjusted against the dues from assessee company M/s. Rajkishore Developers Pvt.Ltd. without verifying the actual transaction between the two companies. The learned DR further submitted that the learned CIT(A) has failed to consider the details of construction done by M/s. Rajkishore Engineering and Constructions Pvt.Ltd. for the assessee company as also the fact that whether M/s. Rajkishore Engineering and Constructions Pvt.Ltd. had admitted this amount as its income before allowing the relief to the assessee. The learned DR also submitted that the learned CIT(A) erred in admitting the additional evidences filed by the assessee without giving opportunity of the Assessing Officer as envisaged under rule 46A of I.T.Rules, 1962 in gross violation of principles of natural justice. Therefore, the appeal may be set aside to the file of the Assessing Officer to re-examine the issues afresh in acco....