TaxTMI 
TaxTMI 
2023 (8) TMI 330
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....sis. On the facts and circumstances of case and in law, the CIT(A) should not have upheld the addition of Rs. 1,50,49,000/- even on protective basis. On the facts and circumstances of case and in law, the addition of Rs. 1,50,49,000 upheld by CIT(A) on protective basis is erroneous and the same is liable to be deleted. 4. On the facts and circumstances of case and in law, the assessment order passed by the assessing officer u/s 143(3) rw.s. 153A is illegal and without jurisdiction and Commissioner of Income Tax (Appeal) should have held so." 3. The grounds of appeal raised by the revenue are as under:- "1. The order of Ld. CIT (A) is not correct in law and facts. 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 38,78,388/- made by AO u/s 69 of the I.T. Act. 3. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 5,57,50,000/- made by AO on account of "unexplained expenditure". 4. On the facts and circumstances of the cases the Ld. CIT(A) has erred in directing the AO to cancel the reduction in closing work-in-progress on account of bogus purchases of Rs. 26,12,41,822....
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....en in case of undisclosed income detected as a result of search, accounting of profit has still to be made on the basis of method of accounting followed by the assessee. 9. The ld CIT(A) after considering the above written submissions and contentions of the assessee held that during the search and seizure operating incriminating documents indicating unaccounted cash receipts from customers was found and seized. There is no quarrel as to the nature or quantum of the amounts. The ld CIT(A) also noted that at the time of search and seizure operation cash receipts were not recorded in the books of account and these appeared to have been entered in the books of account subsequently. The ld CIT(A) further noted that no doubt the amount may have been entered into books of account of the appellant as advance from customers but the facts remain that these amounts were on money received in cash against the sale of flats and never intended to be accounted for or included in the books of account of the assessee. The ld CIT(A) also noted that the regular business activities have been duly accounted regularly in the books of account and the business transactions which have not been recorded in ....
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....ds change of charging section from 69A to 56 are not correct. Therefore in view of foregoing we are inclined to hold that the addition made by the AO deserves to be confirmed in the hands of the assessee u/s 69A of the Act. Accordingly, ground No. 1 of the assessee is also dismissed. Revenue appeal ITA no. 2623/Del/2014 for AY 2011-12 11. Ground no. 1 of revenue is general in nature which requires no specific adjudication. Apropos ground no. 2 the ld. Senior DR submitted that the ld. CIT(A) has erred in deleting the addition made by the Assessing Officer u/s. 69A of the Act. Drawing our attention towards relevant part of the assessment order para 7 the ld. Senior DR submitted that before the Assessing Officer the assessee stated that impugned cash receipts have been received on account of advances against flats/plots and the same has been shown as an advance from customers against which no sale has been booked and it will be taxed when the sale is recognized. The ld. Senior (DR) submitted that these amounts were not recorded in the books of accounts of assessee and notice by the Department only due to search operation therefore the Assessing Officer was right in making addition ....
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....ccount and also noted that no transaction on account of payment to BOMB Authority of Rs. 45 lakh, Noida Authority of Rs. 5 crore and Billing Commission of Rs. 12,50,000/- total of Rs. 5,57,500/- has not been recorded in the books of accounts of assessee therefore the Assessing Officer was right in treating the same has unexplained expenditure and taxing the same as deemed income of assessee u/s. 69C of the Act. The ld. Senior DR vehemently pointed out that the ld. CIT(A) has granted relief to the assessee without any basis therefore the first appellate order may kindly be set aside by restoring that of the Assessing Officer. 14. From the submissions of the assessee before ld. CIT(A), which has been reproduced in para 5.1, we note that the first contention of assessee is that the assessee has not claim impugned amounts as deduction. The second contention is that the Assessing Officer in para 5.2 of assessment order has himself admitted that the assessee company has received the cash by issue of check of purchase bill and cash generated thereof has been used for making payments. Therefore the assessee submitted that no addition is called for. 15. From operative para 5.2 to the firs....
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.... the books of accounts of the assessee which clearly shows the intention behind this strategy of assessee. Therefore the findings recorded by the ld. CIT(A) has not legs to stand and therefore the same are set aside. However in our considered opinion the tax authorities should have examined and verified the contention of the assessee that the source is cash receipt against the bills and the same was again utilized for incurring expenditure on commission and payment by way of examination of books of account and relevant bank accounts of assessee as to how the cash was generated and Revenue-deposited for making further payments and incurring expenditure. The ld. CIT(A) is directed to adjudicate the issue afresh after allowing due opportunity of hearing to the assessee and without being influenced with the earlier first appellate order. Accordingly, ground no. 3 of revenue is allowed for statistical purposes. 17. The ld. Senior DR supporting the assessment submitted that the assessee company was involved in bogus purchases from various parties which were not genuine and thereby reducing the taxability of income of assessee. The ld. Senior DR submitted that during the year under consi....
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....ame as bogus purchases claimed by the assessee by enhancing work in progress he submitted that the ld. CIT(A) has granted relief to the assessee by recording cryptic findings in para 4.2 therefore the first appellate order may kindly be set aside by restoring that of the Assessing Officer. 19. From relevant part of assessment order we note that the assessee failed to substantiate claim of purchase of construction material before the Assessing Officer despite due opportunity was given by the Assessing Officer. The Assessing Officer also issued notices 131 of the Act and also made inquiry through Income Tax Inspector and thereafter recorded a detail findings in paras 4.4 to 4.6 which are as follows:- 4.4. The assessee vide order sheet entry dated 21.03.2013 was appraised as to the enquiries conducted in terms of issue of summon us. 131 and physical enquiry conducted by the Inspector which reveals that these parties are not genuine business entity but mainly entry providers indulging in issue of bills but not effecting true sales. Therefore, A.R. of the assessee was finally asked to produce the above parties along with books of accounts & IT to prove the genuineness of the party an....
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....ree Trading Co. ill) Sh. Kishori Lal, R/o: D-78, LIG Flats, Lajpat Nagar, Sahibabad a. M/s. Shree Bankey Traders b. M/s. Tirupati International As none of these persons are existing on the given addresses and by no stretch of imagination can construed to transact the sale of iron & steels routed through these accounts having more than one firm, as above. h) As during the course of survey done by ADIT (Inv.), Unit-II Ghaziabad (U.P) that the above party admitted to have received commission of 25 paise for every 100 rupees for providing entry for sale of goods. Money routed through the bank accounts are at first stage transferred to other accounts and at second stage these are withdrawn mostly in cash, which is repatriated to the beneficiary i.e. the assessee company and its associates in cash. Moreover, failure on the part of the assessee to produce such parties inspite of the repeated opportunity given to them conclusively prove that no such party actual exist which can stand and own-up the transactions alleged to be routed through their bank accounts and issue of purchase bills. 4.6 Accordingly, the transactions of purchase of building materials/steels alleged ....