TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 491
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....he order of the assessing officer. 4. It is, therefore, prayed that the order of the ld. CIT(A) may be set aside and that of assessing Officer may be restored to the above extent." 2. Brief facts of the case are that the assessee company is engaged in the business of land developer and civil construction, filed its return of income for the Assessment Year (AY) 2008-09 on 31/03/2009 declaring income of Rs. 9,69,041/-. The return of assessee was selected for scrutiny and assessment as completed under section 143(3) on 12/07/2009 accepting the returned income. Subsequently, the case of assessee was reopened on 29/03/2014. Notice under Section 148 of the Income Tax Act, 1961 (in short, the Act) dated 29/03/2014 was served upon the assessee. The assessment was reopened by recording the reasons that a survey was conducted under Section 133A of the Act on business premises of assessee on 31/12/2009 wherein certain documents were found and impounded. On verification of such impounded material, it was noted that the assessee company received Rs. 1.239 crore in cash against booking of residential units apart from consideration received in cheque. The cash receipt was not shown in the prof....
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....ooking of residential units in its books of account. The Assessing Officer failed to consider the facts which are evident on perusal of audited balance sheet. On the disallowance of interest expenses, the assessee submitted that the Assessing Officer without giving any reasonable opportunity disallowed the entire interest expenses of Rs. 35.72 lacs and added the same to the total income of assessee. The Assessing Officer accepted the interest income of Rs. 45.41 lacs in the P&L account but made disallowance of interest expenditure which is debited to the P&L account. The assessee paid interest on unsecured loans and the same is claimed as deduction against interest income earned. Copy of ledger account of parties showing interest payment was furnished. The assessee further submitted that the Assessing Officer has not given fair and reasonable time and opportunity before making addition. Thus, the supporting evidence filed by the assessee along with submission may be accepted under Rule 46 of Income Tax Rules, 1962 (in short, the Rules). The assessee explained that the Assessing Officer issued show cause notice only on 02/02/2015 and assessment was completed on 18/02/2015 without gi....
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....ssing Officer. The observation of Assessing Officer that confirmation of only six customers was filed is incorrect. The assessee filed confirmation in seven cases. Subsequently, the sale deeds was executed in respect of other units for which advances were received. Copy of sale deeds were filed before the Assessing Officer. The Assessing Officer has not considered those sale deeds nor made any verification of his own. The name of all 37 persons who made booking and advances were received are matching with the annexure in the audit report, which was prepared much before the date of survey. The Assessing Officer totally failed to consider such fact. In six cases relating to A.Y. 2007-08 and in one case relating to A.Y. 2008-09, the assessee received part payment through cheque and part payment through cash. All these payments are reflected in the ledger account of respective parties and closing balance is shown in audited balance sheet which tallies with the ledger account. The contention of Assessing Officer that cash are not recorded is illogical and incorrect. The Assessing Officer failed to bring any evidence which indicates that the assessee received amount from some other parti....
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....rest income (Rs. 45.11 lacs) as set off. Thus, proportionate interest expenses have been claimed as deduction which is very much allowable under the provisions of the Act. 6. The ld. CIT(A) on consideration of submission of assessee, held that the addition of Rs. 1.239 crore is based on the plea as recorded for reopening the case and the allegation that advances found recorded in the impounded material during the survey do not find place in the final books of account and declared final profit. The Assessing Officer made addition of the amount by taking a view that the assessee did not prove before him that these amount in fact were taken into books of account. In the remand report, the Assessing Officer took a totally opposite stand that the credits in the books of account are not explained and genuineness is not proved. The ld. CIT(A) on considering the submission of assessee, agreed that the advances shown in the impounded record are found matching with the Schedule of such advances in the final account and audit report which were filed (prepared) before the date of survey. There was no reasonable cause to doubt these being outside the books of account. The Assessing Officer in ....
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....ld. Sr. DR) for the Revenue and the ld. authorised representative (AR) for the assessee and have gone through the orders of the authorities below. The ld. Sr. DR for the revenue submits that during the remand proceedings for the A.Y. 2008-09 out of total 37 customers, the assessee furnished confirmation of 5 or 6 customers only. The assessee was asked to produce the parties and the assessee has neither produced any party nor filed any confirmation. Therefore in absence of complete details, the claim of assessee cannot be ascertained as correct and genuine. On deleting the interest disallowance, the ld. Sr. DR submits that the secured loans were availed by assessee for the purpose of completion of project. The assesse was following project completion method, thus the interest expenses incurred on the so called secured loan should have been part of work in progress and the same cannot be set off against the interest income. 9. On the other hand, the ld. AR of the assesses supported the order of ld. CIT(A) on both the issues. The ld. AR submits that the assessee has recorded entire amount received from various parties against booking of residential units in its books of account and t....
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....ited balance sheet, sale deeds and ledger accounts. 10. Against the interest disallowance, the ld AR for the assessee submitted that the assessee incurred interest expenses of Rs. 60,96,751/- and out of this amount proportionate interest expenses of Rs. 35,72,114/- attributable to earning of interest income has been duly claimed as a set off against the interest income earned. The balance amount of interest expenses of Rs. 25,24,637/- has been added to work in progress. This fact is clearly mentioned in the note in books of accounts. The ld. AR submits that assesse claimed set off of proportionate interest expenses as the said expenses relates to earning of interest income from various parties as advances to them were given from borrowings made from HUDCO. Thus, proportionate interest expenses has been claimed as deduction which is very much allowable under the provisions of the Act, the ld CIT(A) on appreciation of facts found interest expenses in order. 11. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. Ground No. 1 relates to deleting the addition of Rs. 1.239 Crore. We find that the Assessing Office....