TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 795
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....ee`s case was selected for scrutiny and statutory notice u/s 143(2) of the Act was issued to the assessee. The assessee is engaged in the business of construction and project development activities. The Id Assessing Officer (herein after referred to 'AO') finalized the assessment u/s 143(3) of the Income Tax Act, on 11.12.2017, accepting the returned income of the assessee. 3. Then after, Learned Principal Commissioner of Income Tax, Surat [in short "the ld. PCIT"], has exercised his jurisdiction under section 263 of the Income Tax Act, 1961. On verification of the records of the Income-tax assessment proceedings for the assessment year 2015-16, it was noticed by the ld PCIT that survey action u/s 133A of the Act was carried out in assessee`s case on 04.12.2014. During the course of survey proceedings, statement of Shri Odhavjibhai Shamjibhai Pagdar, partner of the firm was recorded on oath u/s 131 of the Act. In reply to Q.No.21 to 23 of the statement, Shri Odhavjibhai Shamjibhai Pagdar has admitted receipt of unaccounted income of the firm in the form of 'on-money' of Rs. 4,75,00,000/- and disclosed the same as income of the firm for F.Y. 2014-15 relevant to A.Y.2015- 16. The as....
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....32,19,780/- as expenses against the disclosed income which is irregular in view of the provisions of section 115BBE of the Act. As per the provisions of section 115BBE(2) of the I. T. Act, no deduction in respect of any expenditure or allowance shall be allowed to the assesses under any provision of the Act in computing the income referred to in clause (a) of sub-section(1) i.e. the amount of income-tax calculated on income referred to in section 68, section 69, section 69A, section 696, section 69C or section 69D, at the rate of thirty per cent. Despite such facts and circumstances and specific provisions of law in section 115BBE(2) of the Act, Assessing Officer has completed assessment determining total income at Rs. 4,42,80,220/- and thereby allowing your erroneous claim to the tune of Rs. 32,19,780/-, rendering the assessment so completed as erroneous in so far it is prejudicial to the interest of Revenue. 3. The undersigned, therefore, propose to pass an order u/s 263 of the Act against the assessment order passed u/s 143(3) dated 11.12.2017 by the Assessing Officer for the A.Y. 2015-16, in so far as it is erroneous as well as prejudicial to the interest of revenue. 4. In ....
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....est as per Deed u/s 40(b) 37,80,279 Total Income 4,42,80,215 Total Income (rounding off) 4,42,80,220 There is no other activity or other source of income available to the firm in A Y 2015-16. On money receipts w.r.f. the business of the firm amounts to Business Income. Accordingly, the same is credited to the profit and loss account for the year under revision. Ld. ACIT has also taken a note of this aspect in his body of order. It is further to explain that income of the firm for A Y 2015-16 was Rs. 4,80,60,494/-and an amount of Rs. 37,80,279/-has been paid to the partners in form of interest. Therefore, returned income is arrived at Rs. 4,42,80,220/-. It is humbly argued that interest to partners of the firm is nothing but a portion of profit of the firm. But due to specific provision of the Act, it has been given to the partners in form of interest. Thus, there is no claim of expenses of Rs. 32,19,780/- as shown at para 2 of your show cause notice. The assessee has shown disclosed income + regular income and therefore, its income was at Rs. 4,80,60,494/- as against disclosure of Rs. 4,75,00,000/-. As assessment of income has been made as Business Income and not as incom....
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....Rs. 32,19,780/-. Since, the Assessing Officer has passed the order after due application of mind and after scrutinize the claim of the assessee, therefore the order passed by the Assessing Officer should not be erroneous and prejudicial to the interest of the Revenue, hence order passed by the ld PCIT may be quashed. 9. On the other hand, the Learned Departmental Representative (in short "the ld. DR") submits that 'on money' is assessable under section 69A of the Act, therefore no expenditure should be claimed against the 'on money' so disclosed by the assessee. Besides, ld DR also relied on the order of the ld. PCIT, particularly Para Nos.4 and 4.1 of the order of the ld PCIT. 10. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. PCIT and other material brought on record. It is undisputed fact in this case that a survey u/s 133A of the Act was carried out at the business premises of the assessee on 04.12.2014. During the survey, certain facts were discovered and statement of Shri Odhavjib....
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....no.36, wherein the assessee has shown income disclosed during the survey proceedings at Rs. 4,75,00,000/- in the profit and loss account and vide paper book page no.34, the assessee after having included said income disclosed during the survey in the profit and loss account, has claimed interest expenditure. We have gone through page no.85 of the paper book wherein, in answer to question no.21, the assessee has stated that the income of Rs. 4,75,00,000/- belongs to their business firm Trividh Corporation. In the answer during survey proceedings, the assessee also stated that amount of Rs. 4,75,00,000/- was received on account of booking and selling of residence units, residential flats / units in the Astha Medicare and Residency and therefore it is a cash amount received by M/s Trividh Corporation in connection with the project of Astha Medicare and Residency. Therefore, it is income of that project from business and thus assessee claimed expenditure, which has been thoroughly examined by the assessing officer.Since, the Assessing Officer has passed the order after due application of mind and after scrutinizing the claim of the assessee, therefore the order passed by the Assessing ....