TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 1786
X X X X Extracts X X X X
X X X X Extracts X X X X
....lected for scrutiny followed by notice issued u/s 143(2) as well as u/s 142(1) of the Act. In response to the notices, ld. AR of the assessee appeared time to time before the AO and to furnish various details in the course of hearing. During the course of assessment proceedings, ld. assessing officer asked to furnish the details of sundry creditors as on 31.03.2012. However, the details furnished by assessee in response to the notice were inadequate besides that assessee could not file the details of major expenses incurred during the assessment year in question. In this regard, the ld. AO was asked the assessee to explain the same. In response to the query made by the ld. AO, assessee company filed a reply requested to estimate the net profit of the assessee at 8% as done in earlier years i.e. A.Y. 2010-11 & 2011-12. The ld. AO after considering the submission of the assessee computed the net profit of the assessee @ 8% on the total turnover by rejecting the profit & loss account as disclosed in ITR filed by the assessee. The ld. AO assessed the income of the assessee from the business of civil construction @ 8% of total turnover of Rs. 44,87,35,982/- which come to Rs. 3,58,98,878....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erused material placed before us. We notice that addition u/s. 43B of the Act at Rs.2,23,11,140/- has been deleted by Ld. CIT(A) solely on the ground that income of the assessee has been estimated after rejecting the books results and, therefore, no other addition can be made. We fail to find any merit in the said finding of the Ld. CIT(A) for the reason that in the instant case the income has been estimated by applying 8% net profit rate on the gross turnover and, therefore, only items of P&L Account have been considered to be rejected and profit estimated. So far as the items of Balance sheet are concerned, where the assessee takes unsecured loans and also make investments which are not having any connection with the P&L Account, all those transactions are always under the scanner of examination by the Ld. AO. Under the given facts and circumstances, admittedly, there is VAT/service tax liability standing in the books which has not been paid before the due date of filing of income tax return and, therefore, section 43B of the Act is applicable. During the course of hearing, ld. Counsel for the assessee was fair enough in admitting that though the alleged sum of VAT/service tax ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee company during the relevant previous year comes to Rs.3, 18,44, 538/- (Rs. 78,20,363/- + Rs.4,34,79,85 1/-) - (Rs. 54,63,606/- + Rs. 1,39,91,970/-) and the assessee was requested to furnish the necessary evidences in respect of the said loans. However, despite being given ample opportunity, the assessee had failed to furnish the necessary evidences, i.e. loan confirmation, bank statements of the loan creditors, source of fund etc. in respect of the said loan taken during the relevant year. As such, the entire amount of Rs.3, 18,44, 538/- was treated as unexplained cash credit and added back to the total income of the assessee. Now, during the appellate proceedings, the assessee has submitted before your good self that this loan was taken from its associated concerns. In the interest of justice, your good self has directed the undersigned to give an opportunity to the assessee to produce the evidence before the undersigned and to verify the identity, capacity and genuineness of the transactions and submit a report in this regard. In this context, I would like to submit the factual findings of the case, which is as under:- As directed, during remand proceeding, to v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5,000/- From the above fact, it can be safely concluded that the creditworthiness of the above said creditors are doubtful and the capacity of the creditors to provide such huge amount of loan to the assessee cannot be fully substantiated by the documents which were provided by the loan creditors in response to notice issued u/s133(6) of the Act. On perusal of the details filed by the assessee regarding the long term borrowing, it is found that the said borrowings are basically secured loans which were taken by the assessee from different scheduled banks and financial institution for purchase of its fixed assets, details of which is as under: Loan taken from Opening Balance Taken during the year Interest charged Payment during the year Closing Balance HDFC Bank 11,65,173.34 90,804.10 6,70,836.00 5,85,141.44 3,86,871.92 21,928.08 4,08,800.00 11,10,262.90 95,533.04 5,97,240.00 6,08,556.03 7,05,877.38 53,631.60 6,09,960.00 1,49,548.98 3,91,139.81 31,428.19 4,22,568.00 11,00,000.00 90,587.74 3,69,500.00 8,21,087.74 21,17....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the assessee company. The other two entities are group companies of the assessee. The ld. AO while framing the assessment accepted the fact that companies are group companies or director himself who have given loan to the present assessee during the year under consideration. The only objection of the AO in the remand report is that the returned income of Johnbro Construction Pvt. Ltd., Online Builders Pvt. Ltd. is not commensurate with the returned income of the assessee. However, the alleged view taken by AO was brushed aside by the ld. CIT(A) since the identity, creditworthiness and genuineness of the transaction has been duly proved. The ld. AO in his remand proceedings did not consider the aspect of the fact that the loan transactions have vital movement in terms of receipt and payments. But the Ld. AO while making addition only taking into consideration the difference between the opening and closing balance of secured and unsecured loan. Therefore, the ld. CIT(A) after analyzing above fact rightly deleted the addition as made in the case of assessee. 12. We after hearing the rival submissions of the parties and perusing the material available on record. The ld. CIT(A) find....