2024 (12) TMI 374

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....urse of assessment, the AO had made the following additions: i. Under statement of receipt from service - Rs. 8,77,60,800/- ii. Over statement of purchase - Rs. 39,52,298/- iii. Expenditure from unaccounted source - Rs. 1,04,98,344/- 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which has been decided vide the impugned order and the appeal of the assessee was allowed. 4. Now, the Revenue is in appeal before us. The Revenue has taken the following grounds in this appeal: (a) The Ld. CITIA) has erred in law and on facts in deleting the Addition of Rs. 8,77,60.800/-on account of understatement of Revenue. (b) The Ld CIT(A) has erred in law and on facts in deleting the Addition of Rs. 39.52,298/ on account overstatement of purchase (c) The Ld. CIT(A) has erred in law and on facts in deleting the Addition a Rs. 1,04,98,344/ on account of unexplained expenditure (d) The appellant craves leave to add, alter and/or to amend all or any the ground before the final hearing of the appeal." 5. The first ground pertains to addition of Rs. 8,77,60,800/- on accoun....

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....During the assessment proceeding, it was noticed by the AO that the appellant has not offered any sale or revenue in said project until the A.Y. 2018-19. The AO further noted that the appellant had declared an amount of Rs. 2,04,23,200/- as service tax in the GST return for the period from July 2017 to March 2018 but did not shown any income in the P&L Account. Further, it is noticed by the AO that the appellant has received services charges totaling Rs. 6,99,90,800/- during that period Apr-17 to June-17 with a service tax component of Rs. 2.09,97,240/-, The AO was of the view that the net amount of Rs. 8.77,60,800/- which excludes service tax and GST is nothing but service charges which were rendered by the appellant as consultancy fees for construction-related work. However, during the assessment proceeding. the appellant has made elaborate submission stating that these amounts was basically pertain to advance received from customer for booking of flats. It is further stated by the appellant that the AO misunderstood the nature of the appellant firm's business activities, erroneously concluding that it provides consultancy services for construction work. It is also assumed by....

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.... use permission for its residential scheme "Ishan Luxuria" in April 2018 Le, in AY 2019-20. On verification of the same, it is observed that the appellant has offered income aroused from sale of flats of said project in the subsequent years le. A.Y. 2019-20 and A.Y. 2020-21, In view of the above since the booking advance amount of Rs. 8,77,60,800/- does not represent the amount received from consultancy services as assumed by the AO, the question of taxing this amount is not correct in the eyes of the law. Considering the fact and circumstances of the case, the addition of Rs. 8,77,60,800/- on account of understatement of revenue made by the AO is hereby deleted. Therefore, the same is deleted and ground raised by the appellant on this issue is hereby allowed." 8. It is found that the Ld. CIT(A) has correctly appreciated the facts of the case and allowed relief to the assessee. The AO had no evidence of any consultancy services rendered by the assessee so as to treat the receipt of Rs. 8,77,60,800/- as income of the assessee. As no TDS was deducted on this amount there was no reason to conclude that this amount was consultancy receipt. The Ld. CIT(A) has correctly held that this....

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....idering the explanation of the assessee. He has also given a finding that there was no disparity between the data from the books of account and the details as presented regarding these sundry creditors. Since, the Ld. CIT(A) has allowed the relief after correctly appreciating the facts of the case, the ground taken by the revenue is dismissed. 12. Ground No.3 pertains to addition of Rs. 1,04,98,344/- on account of unexplained expenditure. The Ld. CIT-DR explained that in the course of assessment, the AO had called for details of squared up unsecured loans during the year. On verification of the details as furnished, the AO found that the re-payments of loan were not matching with the bank statement. He found that the assessee had refunded loan of Rs. 1,48,98,334/- during the year. However, the payment of Rs. 44,56,543/- only was appearing in the bank statement. The AO, therefore, held that the differential amount of Rs. 1,04,98,344/- was repaid from unexplained source and accordingly this difference was treated as deemed income u/s. 69C of the Act. The Ld. CIT.DR submitted that the addition was made by the AO for the reason that the assessee could not co-relate the re-payment of....