TaxTMI 
TaxTMI 
2023 (4) TMI 326
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....0 is un - sustainable in law as well as on merits. 2. That under the facts and circumstances, estimation of N.P. @5.89% resulting into consequential addition of Rs. 4,48,754/- is absolutely unsustainable in law as well as on merits. 3 (a) That under the facts and circumstances, CIT (A) grossly erred in law as well as on merits in sustaining addition to the extent of Rs. 9.30,000/- u/s. 68 on the seized Pgs. 58 & 59. (b) That without prejudice. Ld. CIT (A) erred in law as well as on merits in not admitting the additional evidences induced U/R. 46 A of the I.T. rules. 3. First ground of appeal relates to addition of Rs. 7,40,704/- under section 69C of the Act towards unexplained expenses in housing project by the name of "Power House". 4. During the course of assessment proceedings, the AO issued a show cause basis document A-3 page no. 20 impounded from the business premises of the assessee. The reply so filed by the assessee was considered but not found acceptable to the AO. As per the AO, the assessee has failed to reconcile the expenses recorded on page no. 20 of the siezed documents with his regular books of account. It has been further held by t....
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.... its explanation corroborated by the affidavit of Shri Angra and therefore the addition so made and confirmed by the Ld. CIT(A) be deleted. 6.3 Per contra, the Ld. DR relied on the findings of the AO as well as that of the Ld. CIT(A) and our reference was drawn to the findings of the Ld. CIT(A) which are contained at para 7.1 of the impugned order which read as under: "7.1. I have considered the submission of the assessee and the impugned order. This document is a hand written page containing the details of payment received on various dates. Scanned copies of the both front and back, are placed in the body of the order. Assessee was asked to explain the nature and mode of receipts as well as reconcile these entries. The assessee stated the entries on back of page 20 are rough estimates as clearly mentioned which are in connection with installation of kitchen accessories etc. and other additional work to be carried out by some kitchen accessories' supplier. It was also stated that the documents are neither written by the assessee nor its employees and neither was it related to any project carried out by the assessee and its members. However, the AO observed that on t....
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....stands reduced and so on. Thus it is very clear that Rs.7,40,704/- was expended and as it is definitely not a dumb document, the assessee was required to reconcile the entries with the books of accounts. Merely filing reply without supporting documents does not help. Thus, I am inclined to hold that the addition has been rightly made u/s 69C here as the paper was seized from the business premises and presumption u/s 292C remains undischarged. Consequently, the addition in the hands of Shri Pawan Sahni is directed to be deleted. Assessee fails on this ground of appeal" 7. We have heard the rival contentions and purused the material available on record. From perusal of records and the affidavit placed on record, we find that there are two-set of work being carried out. One relates to regular kitchen work as part of the arrangement between the assessee and the customers and secondly, where there is requirement of any additional or specific kitchen work to be done as so required by the customers. The regular kitchen work was done by the assessee through Koncept Kitchen and Decorators, and the specific kitchen work was got done by the respective customers through M/s Mehak Enterprise....
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....s and net profit for financial year 2006-07 to 2009-10 was explained. It was explained that the net profit rate for the financial year 2006-07 is 8.65%, for financial year 2007-08 is 3.15%, financial year 2008-09 is 1.67% and for the financial year 2009-10, it is 1.80%. The reasons for high net profit ratio in the financial year 2006-07 was due to the fact that this was the initial year of the commercial operation and the fixed expenses such as staff salary of the assessee quite low and no depreciation has been claimed by the assessee on fixed assets. It was also explained that the main reason for low net profit percentage in financial year 2008-09 and 2009-10 as compared to earlier years was due to the fact that assessee has not claimed any depreciation on fixed assets in financial year 2006-07 and 2007-08. The assessee has claimed depreciation to the tune of Rs. 4,92,375/- during financial year 2008- 09 and Rs. 3,35,188/- during financial year 2009-10. This has resulted in less net profit rate in financial year 2008-09 and 2009-10. In the absence of depreciation in financial year 2008-09 and 2009-10, the net profit ratio would have been 2.78% and 4.85% respectively which is almos....
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....ssessment year under appeal by itself is no ground to make addition of this nature against the assessee. We, therefore, do not justify the orders of authorities below in making and upholding this addition. We, accordingly, set aside the orders of authorities below and delete the addition of Rs. 18,77,319/-. This ground of appeal of the assessee is allowed." 10. It was submitted that the facts and circumstances of the case are exactly similar to A.Y. 2009-10 and identical order has been passed by the AO for both the years. In A.Y. 2009-10, the declared N.P. rate of 1.68% was modified and estimated at 5.89%, and applying the same analogy, the declared N.P. of 1.80% was modified and estimated at 5.89% for the impugned assessment year. It was submitted that the Coordinate Chandigarh Bench has deleted the estimation addition and confirmed the declared N.P. for A.Y. 2009-10 and the ratio laid down therein squarely applied in the instant case. 11. Per contra, the Ld. DR relied on the order of the lower authorities. 12. We have heard the rival contentions and purused the material available on record. Admittedly, the facts and circumstances of the case are identical to A.Y 2009-10 ....
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..... CIT(A) was not justified in rejecting the application as the assessee was prevented by reasonable cause from producing these documents during the assessment proceedings. It was accordingly submitted that in the light of the above submissions and the documentation so filed indicating the sale and the registration, the payments so received by the assessee from the Goyal Brothers relates to A.Y. 2008-09 and not to impugned assessment year and therefore the addition so made by the AO and sustained by the Ld. CIT(A) be deleted. 17. Per contra, the Ld. DR relied on the order of the lower authorities and our reference was drawn to the findings of the Ld. CIT(A) which are contained at para 8.2 of the impugned order. 18. We have heard the rival contentions and purused the material available on record. On perusal of records, we find that the payment of Rs 9,30,000/- relates to sale of flats which have been sold by the assessee to Goyal brothers. The sale deeds in respect of these flats were registered on 24/08/2007 and all the payments totaling to 59,30,000/- including the payment of 9,30,000/- was received prior to registration of the sale deed. Therefore, we agree with the contenti....
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....assessee is in appeal in ITA No. 181/Chd/2014 amounting to Rs. 4,48,754/-. Thirdly, the assessee is in appeal against the levy of penalty in respect of Rs. 9,30,000/- addition sustained by the Ld. CIT(A) under section 68 of the Act. Besides the assessee has also challenged the penalty on addition of Rs. 7,40,704/- which has wrongly been confirmed by the Ld. CIT(A) wherein the fact is that the AO has not initiated and levied any penalty in respect of the same. 22. Regarding levy of penalty on surrendered amount of Rs. 25,00,000/- as WIP under section 132(4) of the Act, it was submitted that the search was conducted on 11/09/2009 and the assessee surrendered WIP amounting to Rs. 25,00,000/- subsequently the same was declared in the returned income filed under section 139(1) on 30/09/2010, paid the taxes as applicable and same was duly accepted and assessed by the AO. However the AO initiated the penalty @ 10% under section 271AAA of the Act. It was submitted that the similar surrender and consequent levy of penalty has been made in A.Y. 2009-10 wherein the Ld. CIT(A) deleted the same vide his order dt. 09/06/2017 and which stands accepted by the Department. It was submitted that t....
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.... been levied by the AO and therefore this issue was not before the Ld. CIT(A) however the Ld. CIT(A) in conclusion confirmed the penalty of Rs. 7,40,704/- by wrongly assuming that the penalty has been levied by the AO. It was accordingly submitted that when the AO has not levied the penalty at first place and therefore the assessee has not taken up the issue before the Ld. CIT(A) then he could not had given findings for confirming the penalty which was never levied. 27. Regarding levy of penalty of addition of Rs. 9,30,000/- it was submitted that the addition of Rs. 72,86,000/- was made by the AO on the basis of seized documents and the Ld. CIT(A) sustained the addition of Rs. 9,30,000/- in quantum appeal on which penalty stood confirmed by the Ld. CIT(A) in the impugned order. It was submitted that firstly the submissions made in the quantum appeal in ITA No. 181/Chd/2014 may be considered. Secondly, it was submitted that the addition has been made on the basis of seized material and not on the basis of unexplained credit in the books hence the addition cannot be made under section 68 of the Act. Consequently no penalty can be levied on the addition made under section 68 of the....
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.... this has been filed during the appellate proceedings. In view of the same, penalty on this surrendered income is sustained. Further, it is seen that the CIT(Appeals) has confirmed the following additions:- (i) Addition on a/c of low net profit shown by appellant-Rs. 4,48,754/- (ii) Addition u/s 69C- Rs. 7,40,704/] (iii) Addition u/s 68- Rs. 9,30,000/- The AO in the penalty order has discussed elaborately the reasons for levying penalty on these additions on the basis of discrepancies found in documents found during the search. No, submissions have been filed during the penalty proceedings. In view of the same, the penalty is confirmed on the above mentioned additions confirmed by CIT(Appeals) amounting Rs. 46,19,458/-. The AO is directed to recomputed the penalty accordingly." 30. We have heard the rival contentions and purused the material available on record. For the purposes of levy of penalty u/s 271AAA, what is required to be examined is whether any undisclosed income of the specified previous year has been found during the course of search in case of the assessee and the term "Undisclosed income" has been defined under explanat....