TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 101
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....based on the statement u/s 131 of the IT Act, on account of unaccounted cash payment. 4. Whether on the facts and in the circumstances of the case CIT (A) was right in deleting the addition of Rs. 1,39,14,000/- made by AO on account of unaccounted expenditure accepted in his statement u/s 132(4) and statement u/s 131. 5. Whether on the facts and in the circumstances of the case CIT (A) was right in deleting the addition of Rs. 63,596/- made by AO based on the statement u/s 131 of the IT Act, on account of unaccounted expenditure. 5. The appellant craves leave or reserves the right to amend, altr, add or forego any ground (s) of appeal at any time before or during the hearing of this appeal. 2. The assessee is an Individual and is engaged in the business of civil construction under the name and styled as M/s. Jain Construction Company. A search and seizure under section 132 of the IT Act, 1961 was conducted on 23.05.2013 at the various residential/business premises of Rajendra Jain/Rajendra Baradiya & other persons of the group along with the assessee. The assessee filed the return of income on 31.03.2015 for the assessment year 2014-15 declaring total income at Rs. 3,61,810/....
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.... the years covered in block period. But as per seized documents the turnover of the assessee was never exceeded the limit prescribed u/s 44AD of the IT Act. That in another assessment years falling in block period from assessment years 2008-09 to 2013-14, the AO has accepted the turnover and profit declared u/s 44AD of the Act. Only meager additions were made for expenditure and cash payment against material purchases which has been deleted by the ld. CIT (A) in appeal and due to small tax effect the department has not preferred appeal against the CIT (A)'s order. The departmental appeal is only for the year under consideration. There is no addition sustained in the earlier years by ld. CIT (A). That the ld. D/R has wrongly observed regarding percentage completion method. The assessee has submitted that he has taken the turnover on the basis of percentage completion of project for declaring profit u/s 44AD of the Act by estimating that how much percentage of work is completed for the purpose of computing turnover. The ld. CIT (A) has mentioned that there was no occasion for recording the statement under section 131 of the Act when the assessee has already admitted that he was....
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....ection 44AD, disclosed the income at Rs. 4,53,640/-, which has been accepted by the AO. The ld. CIT (A) after discussing the matter in para 6.3, allowed the ground of the assessee as under :- " 6.3. I have perused and carefully considered the order of the Assessing Officer and also the submission made citing various judgments by the appellant. It is a case where the appellant had disclosed income u/s 44AD of the Income Tax Act, 1961. The Assessing Officer has made the addition by treating the cash found as unexplained. The Assessing Officer has supported addition by quoting the statement of the appellant recorded u/s 131 on 16.07.2013. In the statement recorded u/s 132(4) appellant has stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of accounts. I am in agreement with the view taken by the AO. I have already indicated in the general analysis that if as per evidence found as a result of search, the total turnover is exceeding the limit prescribed u/s 44AD, the income has to be computed as per regular provision and not under presumptive scheme. If what is found is only relating to payments made....
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.... under :- " 8.2. I have perused and carefully considered the order of the Assessing Officer and also the submission made citing various judgments on this issue by the appellant. It is a case where the appellant had disclosed income u/s 44AD of the Income Tax Act, 1961. The Assessing Officer has made the addition by treating the payment of interest as unverified. The Assessing Officer has supported addition by quoting the statement of the appellant recorded u/s 131 on 16.07.2013. In the statement recorded u/s 132(4) appellant has categorically stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of accounts. In view of this, the statement recorded u/s 132(4) would prevail over statement recorded u/s 131. The appellant has further quoted various board circulars decrying surrender in confessional statement. I am in agreement with the submission of the appellant that when income was declared u/s 44AD and so accepted by the Assessing Officer there was no case for making addition of the payment of interest on the ground that it was not verifiable. Obviously, the appellant was not in a position to get the ....
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....d as he was not in a position to get the same verified with reference to books of accounts as no books of accounts has been maintained. I have considered the reply of the appellant also wherein it has been stated that the appellant has disclosed gross receipts of Rs. 56,40,320/- and on such gross receipts income of Rs. 4,53,640/- has been disclosed by way of rate application of 8.04%. Income was disclosed u/s 44AD and the same was accepted. The case of the appellant is that in the circumstances expenditure of Rs. 51,86,680/- is already available (5640320-453640) which covers the above expenditure of Rs. 23,68,320/- treated by the Assessing Officer as unexplained. Considering the fact I am in agreement with the appellant that there was no occasion for recording statement u/s 131 on the same issue when appellant already stood examined u/s 132(4) on 13.05.2013. In the statement recorded u/s 132(4) appellant has categorically stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of accounts. In view of this the statement recorded u/s 132(4) would prevail over statement recorded u/s 131. I am in agreement w....
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....se where the appellant had disclosed income u/s 44AD of the Income Tax Act, 1961. The Assessing Officer has made the addition of Rs. 1,39,14,000/- on the basis of page no. 11 of Annexure AS Exhibit - 4 on the ground that the payment of Rs. 1,39,14,000/- is unexplained and not verifiable. The Assessing Officer has referred the statement of the appellant recorded u/s 131 on 16.07.2013 wherein appellant has accepted the expenditure as unexplained as he was not in a position to get the same verified with reference to books of accounts as no books of accounts has been maintained. I have considered the reply of the appellant also wherein it has been stated that the above page itself discloses that it was an estimate of expected expenditure on construction at three sites. Further the appellant has submitted these construction work receipts stand disclosed in Assessment Year 2013-14 of Rs. 98,60,000/- and Assessment Year 2014-15 of Rs. 56,40,320/-. In view of the detailed submission of the appellant which are with cogent reasons, I am of the view any alternative but to delete the addition. Appellant's Ground No. 5 is allowed." The ld. CIT(A) has deleted the addition by holding that the ....