TaxTMI 
TaxTMI 
2022 (12) TMI 68
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....f the Assessment Years 2012-13 to 2017-18 has to taxed under section 69A of the Income Tax Act, 1961 (hereinafter called 'the Act'), as assessee's unexplained money OR only 8% of the cash deposits has to be brought to tax under section 44Ad of the Act as treating the same as assessee's turnover in the business of construction contracts. 3. The assessee is an individual and is a partner in partnership firm M/s. Ace Developers, which is engaged in construction and sale of apartments. There was a search and seizure operation conducted under section 132 of the Act in the case of Nidhi Ace Infrastructure on 24.06.2016. As part of the said search operation, the residence of Mr. Gregory D'Silva at Mangalore was also searched. Books of Accounts an....
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....ed before the AO that the cash deposits for the various Assessment Years set out above were made out of contract receipts which were not included in the return of income. Since the cash represents income from the business of civil contracts, it is only the presumptive tax rate of 8% specified under section 44AD of the Act on the above cash deposits that can be brought to tax. The plea of the assessee was rejected by the AO for the reason that the assessee failed to establish with supporting evidence that the cash deposits were receipts from civil contract works undertaken by the assessee. The AO therefore brought to tax the cash deposits as unexplained money under section 69A of the Act and brought the same to tax under the head "Income fro....
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....) Ltd. v. Commissioner of Income-tax; Central-[2018] 98 taxmann.com 234 (Bombay), wherein the Hon'ble HIGH COURT OF BOMBAY held that entire non genuine transactions needed to be brought to tax and that the action of the AO limiting addition under section 69C on basis of GP ratio (15%) was unjustified. In this case the transaction itself was non-genuine transaction. (ii) In the case of CIT v. Maduri Rajaiahgari Kistaia 120 ITR 294 (AP), it was held that unless unexplained credits are referable to business, they cannot be considered as part of business income for the purpose of estimation of profits of business. (iii) CIT v. Devi Prasad Vishwanath Prasad [1969] 72 ITR 194 where there is an unexplained credit, it is open to the AO to h....
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....venue and transactions were not recorded in books of account then addition made by Assessing Officer was justified. The law in sum and substance is that if the Assessee has to show that the cash deposits were referable to unrecorded contract business receipts. 7. Aggrieved by the order of the CIT(A), the assessee has preferred the present appeals before the Tribunal. Learned Counsel for the assessee reiterated submissions as were made before the Revenue authorities. Learned Counsel for the assessee placed reliance on the decision of the Madhya Pradesh High Court in the case of CIT Vs. Balchand Ajith Kumar 263 ITR 610 (MP). In the aforesaid decision, the question was whether the entire unaccounted sale has to be added as undisclosed income....
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....e assessee and that has also not been disclosed. In the absence of such finding of fact the question whether the entire sum of undisclosed sale proceeds can be treated as income of the relevant assessment year answers by itself in the negative. The record goes to show that there is no finding nor any material has been referred about the suppression of investment in acquiring the goods which have been found subject of undisclosed sales." 4. We are in respectful agreement with the aforesaid opinion inasmuch as the total sale cannot be regarded as the profit of the assessee. The net profit rate has to be adopted and once a net profit rate is adopted, it cannot be said that there is perversity of approach. Whether the rate is low or high, it ....