TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 676
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.... u/s.131 of the IT Act, had reaffirmed the modus operandi and quantum of unaccounted income stated and disclosed in his statement dated 30.08.2013. 3. The Ld.CIT(A) erred in law and on facts in accepting the retraction dated 23.03.2015, made after a considerable lapse of 18 months from the date of survey, without there being any reason tendered by the deponent. Therefore, the same is not a valid retraction and should have not been accepted by the CIT(A). 4. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of unaccounted receipts brought in books of accounts in the form of unsecured loans through accommodation entries with the help of one Shri Vipul Thakkar, who was in the business of providing entries for a commission of 0.15%, on the ground that the figures of unsecured loan of Trial Balance, which was prepared on 30.08.2013 and these amount related to A.Y. 2014-15 without appreciating the fact that lenders, who appeared in the Trial Balance and have lent in subsequent years, also have lent unsecured loan during the year under consideration. 5. The Ld. CIT(A) erred in law and on facts in deleting addition of Rs. 13,79,336/- ....
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..... 1.54 Crore. 3. The assessee also claimed and interest expenses on such unsecured loan of Rs. 13.79 lakhs. Since the loan was treated as bogus loan, consequent upon the interest expenses was also treated as non-genuine. 4. The assessing officer on further perusal of the survey report noted that assessee received booking amount of Rs. 4.81 Crore during the relevant financial year and that assessee has shown a receipt of Rs. 1.94 Crore only in its books of account. Therefore, the assessing officer issued show cause notice to explain the difference of Rs. 2.86 Crore in the books of account, should not be treated as additional undisclosed income. The assessee filed its reply and explained that differential amount are advance received as booking amount during the year and the assessee has disclosed the additional income of Rs. 2.00 Crore in the year in which flat, shops and offices were sold and document were executed. The assessee further explained that they are following 'Percentage of Completion Method' and have shown a specific percentage of work in progress (WIP) as profit and hence advance received would not affect net profit of the assessee. The assessee explained that during....
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....essing officer stated that none of the unsecured loan is bogus and whatever was stated during the survey by the partner of assessee was stated under pressure at the fag starting of survey proceeding, the partner was unaware of the accounting knowledge. The statement of said partner was again taken wherein he has specifically stated that his earlier statement was erroneous and there was no unsecured loan. The assessing officer not accepted the submission of assessee and treated the amount as undisclosed income. The assessee explained that during the course of survey no adverse material was found regarding unsecured loan allegedly received by assessee. On the basis of a statement of partner without any further evidence, it cannot be said that assessee received unsecured loan from bogus parties. During the course of assessment proceeding, copy of confirmation of all unsecured loan from lenders along with a return of income were furnished for verification by assessing officer. The loan amounts were received through banking channel through cheques. Thus, the assessee proved identity of lender, genuineness and creditworthiness of the transaction. There was no material evidence before the....
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....e of Rs. 1.30 Crore only on the basis of statement of partner. The learned Commissioner (Appeals) also examined the statement of partner regarding the alleged unsecured loan and held that the said a statement is no way related with the assessment year under consideration moreover the figure of alleged unsecured loan of Rs. 1.54 Crore as recorded by assessing officer at Rs. 1.30 Crore is neither telling with the unsecured loan reflected in the books of account nor any party-wise breakup has been given by assessing officer in the show cause notice. No such information was confronted to the assessee. The learned Commissioner (Appeals) also held that once the assessee filed confirmation of lender and return of income, the onus by the assessee was discharged and it was shifted on the assessing officer to prove that entry made in the books are not genuine. The assessing officer has not issued any notice to the lender nor made any independent enquiry to ascertain the truth. On the basis of the aforesaid observation the learned Commissioner (Appeals) deleted that addition of unsecured loan. Since, the addition of unsecured loan was deleted the consequent disallowance of interest payment w....
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.... 247007 Project cost Land Rs. 21643714/- Cost of construction Rs. 163505405/- Rs. 185149119/- Cost incurred till 3.03.2012 Land Rs. 21,643,714/- Rs. 42,678,665/- Rs. 64,322,379/- Total area sold till 31.03.2012(sq Ft) 102167 Total sale consideration as per agreement of sale executed Rs. 89,774,603/- Amount realized till 31.03.2012 Rs. 21,061,890/- Condition No. 1 Percentage of completion of work without land till 31.03.2012 should be more than 25% 26.10% (42678665/163505405) Condition No. 2 Project area sold by agreements till 31.03.2012 should be more than 25% 41.36% (42678665/163505405)*100 Condition No. 3 Revenue realized till 31.03.2012 should be more than 10% 23.46% (21061890/89774603)*100 Working of profit for A.Y. 2012-13 Percentage of completion of work 34.74% (64322379/185149119)*100 &....
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....ee also prayed for application of project completion method and revenue should be recognized in the subsequent year which is assessment year 2014-15. The learned Commissioner (Appeals) after considering the submission of the assessee concluded that working of project completion as noted above was furnished before him, which works out to be Rs. 45.83 lakhs. The assessee has not taken Rs.2.86 Crore as a part of revenue though received. Thus, the working of assessee is defective and is an inappropriate to that extent. The assessee while filing of return worked out net profit @ 8.7 % of work in progress of Rs. 6.63 Crore and arrived at the carry forward work in progress of Rs. 7.20 Crore. Beside this work in progress cannot be taken as absolute truth because evidence of unexplained expenditure as per admission of assessee for entire project was also found, further the assessee has taken a stand that if addition is required to be made that should not be more than 8% of Rs. 2.86 Crore of alleged unaccounted received for the year under consideration. On the basis of conclusion of defect working the learned Commissioner (Appeals) restricted the addition to the extent of 8.7% of Rs. 2.86 ....
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....hould be upheld. 13. On the other hand the ld. AR for the assessee supported the order of learned Commissioner (Appeals). The ld. AR for the assessee further submits that Ground No.4 relates to deleting the treatment of unsecured loan as unexplained credit under section 68 and ground No.5 relates to deleting the interest expenses and ground No 6 relates to restricting the difference of alleged undisclosed receipt of booking amount to 8.7%. The ld AR for the assessee further submits that survey action was carried out at the premises of the assessee on 30th August 2013. Notice under section 131 was issued to the assessee for recording the statement of the partner. No proceeding was pending at the relevant time to invoke the provision of section 131 of the Income-tax Act. The statement was recorded by the survey party under section 133A, such statement has no evidentiary value in the eyes of law. The survey party has no power to administer oath to the person, whose statement is recorded by them. The assessing officer without rejecting the books of account and pointing out any defect make huge addition on account of undisclosed receipt. The ld. Commissioner (Appeals) after considering....
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....profit and hence advance received would not affect net profit of the assessee. The claimed that during the year under consideration the assessee has shown profit at the rate of 8% of work in progress i.e. total cost of the construction. The assessing officer not accepted the version of assessee by taking view that there is difference of Rs. 2.86 Crore, which has not been disclosed by the assessee. The assessing officer treated the entire difference of amount as income of the assessee. The assessing officer took his view that no profit can be calculated on such amount. The assessing officer also held that assessee failed to prove that unaccounted advance of Rs. 2.86 Crore are part of disclosure of Rs. 2.00 Crore made during the financial year 2013-14, i. e. for assessment year 2014-15. The assessing officer treated Rs. 2.86 Crore as undisclosed income of the assessee. The assessing officer was of the view that out of the amount of Rs. 2.86 Crore, the assessee availed accommodation entry in the form of unsecured loan of Rs. 1.54 Crore, on which commissions must have been paid to Vipul Thakkar. On the aforesaid observation, the assessing officer was of the view that no separate additi....
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.... profit for the current year on percentage completion method. 18. The learned Commissioner (Appeals) held that assessing officer has not examined the issue not rejected the method of profit determining which are mining the project on a year-toyear basis. The assessing officer has not rejected the books of accounts by pointing out any defects in the maintenance of books of account by invoking the provision of section 145(3) of the Income tax Act. On second contention of the assessee that whole of the alleged on money received during the year cannot be taxed the learned Commissioner (Appeals) recorded that it was argued before him that it is settled law that when unaccounted sale is detected only the profit component embedded therein should be brought to tax and relied on the decision of jurisdictional High Court in CIT versus President Industries [258 ITR 654(Gujarat)]. The learned Commissioner (Appeals) further noted that it was argued before him that out of the total unaccounted on money of Rs. 7.56 Crore, they have offered Rs. 2.00 Crore as undisclosed income which is 26.83%, which is much more than the regular profit rate of 8% offered by assessee in the return of income. Thus,....