Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (10) TMI 701 - AT - Income TaxAddition of contracts payments – Held that:- The supplementary cash book has been verified – it could not be understood that after making such verification how whole receipts were added to the income - It is not possible in case of various construction receipts to have 90-100% rate of profit which is shown in profit and loss account by special auditor which itself shows that contention of the assessee has merits - However, at the same time there is no evidence to show that receipts in the hands of G.M. Construction Company proprietary concern and in the hand of Matchless Associates were security receipts - these receipts do not relate to construction payment therefore whole of the amounts is required to be added to the income - these are construction receipts and therefore direct receipts and therefore the AO is directed to apply Net profit rate of 8% on these receipts - Therefore this ground is partly allowed. Unexplained cash credits u/s 68 – Held that:- The matter was remanded to the AO and the AO has made enquiries - In response to the query u/s 133(6) Matchless Associates had clearly mentioned the fact regarding purchase of property jointly with Pritam Singh i.e the assessee and the fact that M.S. & Co. kept 30% share - PAN number and acknowledgement of return etc. have been filed - Even the copy of agreement showing 30% share belonging to him has been filed – it could not be understood that after receiving the information no further enquiry has been made then such evidence cannot be ignored - this addition is not justified. Receipt of ₹ 5 lakh withdrawn by Hardeep Singh on various dates which becomes clear from the copy of the bank account placed - Hardeep Singh has clearly stated in his letter that he was employed by the assessee and was deputed to Gurdaspur site and the amounts were withdrawn from the bank and were handed over to Pritam Singh - clearly the assessee has discharged the onus which was put on the assessee and the AO has not made any further inquiry – the AO is not right to reject this evidence without further enquiry – the order of the CIT(A) is set aside – Decided in favour of assessee. Addition of opening/closing work in progress – Total contract receipts received from PBIL Apex Consortium Ltd. treated as income – Held that:- The income and expenditure account clearly show that opening stock of ₹ 214700/- closing stock is also shown at ₹ 214700/-. Therefore there is no justification in addition of opening stock which has been shown as closing stock – the order of the CIT(A) is set aside – Decided and accordingly we set aside the order of the Ld. CIT(A) and delete the addition of ₹ 214700 - The contention of the assessee is accepted that for example in G.M. Construction case against the payment of ₹ 1579700/-, Net profit is shown at ₹ 1364715/- which is almost 90% which is not possible in construction business - the expenses were booked in the supplementary cash book which was verified by the AO during remand report in AY 2003-04 – the order of the CIT(A) is to be set aside and the AO is directed to apply rate of profit at 8% in respect of receipts of ₹ 2265000/- and delete the addition made on account of construction receipts – Decided in favour of assessee. Addition of cash deposited for purchase of demand draft – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the supplementary cash book was originally admitted by the CIT(A) and sent for remand report - entry in respect of ₹ 450000/- was verified by the AO - If the Assessing officer had any further doubt he should have made further enquiry but he could not simply reject this evidence – thus, the order of the CIT(A) is to be set aside – Decided in favour of assessee. Unexplained cash credits u/s 68 – Held that:- As far as a sum of ₹ 2 Lakh is said to have received from Sharma Associates the assessee has filed a copy of confirmation copy of account is sent by the assessee to Sharma Associates in which Mahinder Sharma has simply signed - PAN No. has also been given - The AO has not made any enquiry - Once the depositor has given the confirmation and PAN, if the AO had any doubt he should have conducted further enquiry and could not have rejected this evidence without any further enquiry - the assessee has discharged the burden of proving the genuineness of this transaction of ₹ 2 lakhs. In respect of a sum of ₹ 4.50 lakhs and ₹ 4 lakhs received from R.K. Associates, they were having 25% share in property No. BMM 373 Ph 11, Mohali which was purchased through auction - Other details of payment through DD were also furnished. Even copy of the agreement was filed - PAN of R.K. Associates was not mentioned in the confirmation - Thus the assessee had clearly failed to discharge the onus. Sum of ₹ 3 lakhs received from G.M. Construction, only document filed is a letter from M.S. Alagh stating that he has purchased a truck and a jeep - Even PAN No is not mentioned in such letter - during hearing whether evidence in the form of transfer of vehicles by way of endorsement in the registration certification is there, the assessee showed inability to file such evidence - in respect of the transaction the assessee has not discharged his burden and the addition has been rightly made by the CIT(A) - Decided partly in favour of assessee. Validity of transaction - Cash withdrawal or cheque withdrawal – Held that:- The contention of the assessee is to be accepted that once additional evidence was accepted and during verification in the remand proceedings certain further documents were filed - all the evidences were filed including a certificate from bank - Certificate from the bank show that through cheque No. 252583 cash was withdrawn - This evidence cannot be brushed aside by simply saying that cash was withdrawn through Sarabjit Singh who is only a domestic help - If the Revenue had any doubt the AO should have made further enquiry during assessment proceedings – thus the order of the CIT(A) is to be set aside – Decided in favour of assessee. Addition of undisclosed investment in jewellery – Held that:- Net jewellery is required to be added because no explanation is available and that is 598.48 gms - This jewellery is required to be added in the hands of Pritam Singh and Gurjit Singh - Since this issue has been considered jointly no details have been furnished for individual jewellery and out of the jewellery weighing 298.48 gms should be added in the hands of the assessee and balance 300 gms should be added in the hands of Gurjit Singh – the order of the CIT(A) is to be set aside and the AO is directed to make addition on account of jewellery weighing 298.48 gms in case of the assessee – Decided partly in favour of assessee. Validity of gift received – Failure to prove the genuineness – Held that:- The Revenue has already accepted the fact of giving gifts by Shri Surinderpal Singh - after issuing notice u/s 148 on the basis of above noted reasons the assessment was ultimately completed u/s 143(3) r.w.s. 148 in case of Shri Surinderpal Singh vide order dated 28.2.2013 for AY 2005-06 in which it is clearly mentioned that the gifts given by Surinderpal Singh to Pritam Singh and Gurjit Singh were verified - Surinderpal Singh is an NRI and running many business organizations and assessable income in India was nil - Therefore it becomes clear that source of gifts stand explained - reasoning given by the CIT(A) for deleting the addition, is totally correct and the order of the CIT(A) is upheld – Decided against revenue.
|