TaxTMI 
TaxTMI 
2025 (8) TMI 1866
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ab initio. 3. On the facts and circumstances of the case and in law, ld. CIT(A) erred in confirming the action of ld. Assessing Officer in passing the assessment order on a non-existing entity. 4. On the facts and circumstances of the case and in law, ld. CIT(A) erred in confirming the action of ld. Assessing Officer in making an addition of Rs. 17,78,645/- being profit @ 8% on receipts reflected in the ITS/ Form 26AS. 5. On the facts and circumstances of the case and in law, ld. CIT(A) erred in confirming the action of ld. Assessing Officer in making an addition of Rs. 3,62,292/- being expenditure incurred for credit card payment as reflected in ITS details which is consider in PAN of AABCH7678H. 2. Briefly stated, facts of the case are that in view of non-filing of return of income for the year under consideration that assessment year 2013-14, the Assessing Officer issued notice u/s 148 of the Income-tax Act, 1961 (in short 'the Act') after recording reasons to believe that income escaped assessment particularly in view of information received from the ITS details reflecting credit card payment of Rs. 3,62,292/-; undisclosed turnover of Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounds of the appeal are directed against the addition of Rs. 17,78,645/- that was determined at 8% of its turnover reported in the Service Tax Return amounting to Rs. 1,53,68,205/- and Rs. 68,64,865/- on account of gross receipts from contract work totaling to Rs. 2,22,33,070/- by the AO. The appellant has contended that the assessee has never received the notice for Re-opening u/s 148 of the Act, 1961 and service of order was dated 30/12/2021. Further, the learned officer has stated in his order that the assessee is company, however on PAN it belongs to Partnership Firm which is different in nature and it has already filed letter for cancellation of the PAN and the same has already been furnished to concerned jurisdiction officer on dated 18/10/2012. The appellant has further contended that the learned officer erred by stating in the order that due to absence of documentary evidence total income has been determined @ 8%, however the learned officer has never rejected the Books of Accounts, consideration of income on ad-hoc basis is bad in law. The appellant has claimed that the learned officer has erred by passing an order as it does not comply with basic condition i.e. opportunit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act nor in response to the notice u/s 148 of the IT Act. The AO was in the possession of the information that the appellant had reported turnover of Rs.1,53,68,205 in the Service Tax Return and also receipts of Rs. 68,64,865/- in the form of contract receipts during the FY 2012-13, totaling to Rs.2,22,33,070/-. In course of assessment proceedings, it was asked to furnish the requisite details w.r.t. contractual receipts and income earned thereon during the year under consideration and copy of Service tax return filed for the period under consideration. However, neither any submission nor any written reply was submitted by the appellant before the AO. In the absence of the documentary evidence, it was not possible for the AO to verify the correctness of the accounts. Consequently, the AO has taken the liberal view and allowed all the possible expenses before reaching at a conclusion with respect to income of the appellant. Accordingly, the AO has estimated and assessed the total income of the appellant for A.Y.2013-14 that was determined at Rs. 17,78,645/- which was 8% of its turnover reported in the Service Tax Return amounting to Rs. 1,53,68,205/- and Rs.68,64,865/- on acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d so far. 5.5.2 On verification of case records, the AO has noticed that the assessee has filed its return of income on 27/08/2013 with the PAN AABCH7678H showing total income of Rs.2,23,68,227/-. The case was selected for scrutiny under manual selection and assessment was completed u/s. 143(3) on 29/02/2016 assessing total income at Rs.2,35,31,730/-. Thereafter, new information was received on department's system for the PAN - AABFH1723L. Therefore, the case was selected for re-assessment by recording reasons and issuing notice u/s. 148 of the Act. Thereafter, the re-assessment was completed ex-parte as there was no compliance from the assessee. The AO estimated profit @ 8% from the undisclosed turnover and treated the credit card payments as unexplained expenditure u/s. 69C of the Act. The AO during the re-assessment proceedings has added income from these receipts and has assessed accordingly. Further, the AO has stated that he cannot empirically verify from the return of income whether these receipts have been offered while filing return of income with PAN - AABCH7678H. 5.5.3 Other relevant details/ information for the instant case: a. The assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent proceedings, the assessee put this stand without any cogent or verifiable proof. In addition to above findings about the appellant, it is clear that the appellant is using both the PANs for its transactions which is verified from the fact that the department has received information from third parties where the other PAN was used by the assessee. Considering all the above cited facts and discussion by the AO around the embedded surrounding circumstances and discussion it is established that the AO was right in his observation and subsequent action by making addition of Rs. 17,78,645/- at 8% of its turnover reported in the Service Tax Return amounting to Rs. 1,53,68,205/- and Rs.68,64,865/- on account of gross receipts from contract work totaling to Rs.2,22,33,070/- by the AO. Therefore, the grounds raised by the appellant are disallowed. " 3. We have heard rival submissions of the parties and perused the relevant materials on record. The ground No. 4 & 5 of the appeal of the assessee relate to the merit of the addition. The Ld. counsel for the assessee filed a Paper Book containing pages 1 to 51 and referred to the page Nos. 44 to 47, which is Form 26AS in respect of the old....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2 P 21-Dec-2012 - 818894.00 16378.00 16378.00 16. 194C 07-May-2012 P 2l-Dec-2012 B 818894.00 16378 00 16378.00 3.1 The relevant entries in Form 26AS clearly evidenced that the receipts in question had been nullified against the old PAN, therefore, no addition was required in the case of the receipt reflected in the old PAN of the assessee. We agree with the contention of the Ld. counsel for the assessee as respective receipt have been reduced in the form of 26AS issued by the Department against old PAN and therefore, no addition was warranted in respect of contract receipts which were reflected in the old PAN of the assessee. 3.2 Similarly, regarding the service charges of Rs.1,53,68.205/- the Ld. counsel for the assessee referred to profit and loss account of the assessee, wherein total revenue from the operation is reported at Rs.31,87,87,879/-. Detail of the revenue from operation has been provided on Paper Book page 27 which included service charges of Rs.1,53,68,205/-. The allegation of the Assessing Officer is that this amount of the service charge was reflected in the old PAN and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12 By CENTRAL RLY BHUSAWAL Sales 87 2,56,703.00 13-1-2013 Bu Tata Power Co Ltd Sales 92 39,000.00 15-1-2013 By CENTRAL RLY BHUSAWAL Sales 93 1,95,362.00 19-1-2013 By CENTRAL RLY BHUSAWAL Sales 94 1,95,362.00 20-1-2013 By Tata Power Co Ltd Sales 95 1,12,000.00 31-1-2013 By CENTRAL RLY KALWA Sales 103 3,58,114.00 By CENTRAL RLY KALWA Sales 104 3,58,114.00 6-2-2013 By WESTERN RLY, BARODA Sales 107 2,34,675.00 By WESTERN RLY, BARODA Sales 108 2,34,675.00 12-2-2013 By CENTRAL RLY KALWA Sales 110 3,58,114.00 27-2-2013 By CENTRAL RLY KALWA Sates 115 3,58,114.00 8-3-2013 By CENTRAL RLY KALWA Sales 117 3,75,644.00 By CENTRAL RLY KALWA Sales 118 3,75,644.00 12-3-2013 By CENTRAL RLY KALYAN Sales 120 7,05,325.00 19-3-2013 By WESTERN RLY, BARODA Sales 121 2,34,675.00 &nbs....