TaxTMI 
TaxTMI 
2026 (1) TMI 1317
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....assessee has never filed the return of income u/s 139(1) of the Act voluntarily although a duty has been cast on the assessee to file the same as the income earned by the assessee is above the taxable limit. 1.(ii) the assessee has filed the return of income only in response to the notice issued u/s 148 of the Act thereby clearly establishing that the income of the assessee has escaped assessment 1.(iii) the assessee failed to submit any documentary evidence whatsoever in support of the Profit & Loss Account and Balance Sheet as these are the only documents submitted by the assessee along with the return of income in support of his claim for receipt and expenses: 1. (iv) the Profit & Loss Account and Balance Sheet, which were relied upon by the CIT(A) while allowing the claim of the assessee, were filed in response to the notice u/s 148 of the Act which cannot be considered as books of account within the meaning of books of account as defined in the Act and especially in view of the judgement of Hon'ble Madras High Court in CIT Vs Taj Borewells (291 ITR 232 Madras) wherein it was held that the assessee is duty bound to produce various books of account....
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.... Borewells (291 ITR 232 Madras) wherein it was held that the assessee is duty bound to produce various books of account like cash book, bank book, ledger accounts, bills/vouchers etc., which the assessee has failed to produce before the Assessing Officer. 2.(v) the Profit & Loss Account and Balance Sheet, which were relied upon by the CIT(A) while allowing the claim of the assessee, have not been audited as per the provisions of Section 44AB of the Act although the turnover of the assessee was more than Rs. 40 lacs during the assessment year under consideration and the assessee was duty bound to get the accounts audited. 2. (vi) the books of account relied upon by the CIT(A) shows total receipts of Rs. 90 lacs and after claiming expenses, a profit of Rs. 11,66,217/- was offered and no details of the expenses with documentary evidences whatsoever were produced for the expenses claimed to have been incurred for the purpose of business. 2. (vii) the assessee, who is a non-resident, has managed to construct an entire building without being present in India and without even filing any return of income in India for any of the years. 3 On the facts and ....
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....y been held by the Hon'ble High Court that when the assessee has not maintained the regular books of account, then after forming prima facie opinion that the value of investment is not genuinely shown, the AO can refer the valuation to DVO and make an addition u/s 69 of the Act. 5. That the revenue craves leave to alter, add, modify, delete any or all grounds of appeal." 3. Ground No.1: Vide ground No.1, the Revenue has agitated the action of the Ld. CIT(A) in deleting the addition of Rs. 27,05,519/- which was made by the Assessing Officer (AO) on account of unexplained deposits in bank account of the assessee. 4. The brief facts of the case are that the assessee during the year had constructed 10 residential flats on his ancestral land, out of which four flats were held on for his own purpose/given as gift and the remaining 6 flats were sold to outside parties. The assessee has sold five flats during the year under consideration and sale consideration of Rs. 90 lakhs was shown as income in the Profit & Loss account submitted along with the return of income filed u/s. 148 of the Act. The assessee explained before the ld.CIT(A) that the aforesaid amount of Rs. 27,....
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.... nor bifurcated the construction cost in material and labour. He observed that the DVO only determined the fair market value of the property, whereas, the fact on the file was that in the DVO's report it was nowhere mentioned that construction cost shown by the assessee was incorrect or that the cost of construction was not determined by him on scientific basis. He held that the market value of the property as on 31/03/2012 could not be equated with cost of construction. He, therefore, held that provisions of section 69 of the Act cannot be made applicable in this case on the basis of fair market value estimated by the DVO to hold that the assessee had made unexplained investment. 8. Before us, the Ld.DR could not rebut the aforesaid factual findings arrived at by the Ld. CIT(A). Moreover, the Ld. Counsel for the assessee has explained that during the year under consideration, no construction/investment was made by the assessee, therefore, no addition could have been made by the AO on account of unexplained investment in construction in the year under consideration. He has further submitted that even otherwise the assessee has duly given the details of cost of construction about....