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2021 (4) TMI 390 - AT - Income TaxEstimation of income on sub-contract receipts - estimating 8% profit element of its gross contractual receipts - CIT-DR vehemently argued the fact that the Assessing Officer’s remand report(s) have declined the assessee’s sub-contract receipts plea for want of original documents along with registration thereof - HELD THAT:- We see no reason to accept this mutually contradictory stand on the very books maintained and sub-contract receipts in furtherance to the corresponding contracts entered in the relevant previous year. And more particularly in view of the fact that the Assessing Officer has himself accepted the gross turnover figures in above terms. This tribunal’s co-ordinate bench’s decision in M/s.Maa highways [2013 (7) TMI 1013 - ITAT HYDERABAD] holds that subcontract receipts assessment @5% on lumpsum basis in the very business is just and proper. We thus direct the Assessing Officer to assess the assessee’s sub-contract receipts @5% income element only. Treatment on scrap sales income - under the head ‘business’ OR ‘other sources' - HELD THAT:- There is hardly any dispute that such scrap sales emanates in the ordinary course of civil constructions and contractor business amounts to business income as per DCIT Vs.Harjivandas Juthabhai Zaveri [1999 (12) TMI 5 - GUJARAT HIGH COURT] and M/s.J.V.K. Infra Pvt. Ltd. [2018 (6) TMI 545 - ITAT HYDERABAD] holding the very view. CIT-DR further fails to dispute clinching fact that the assessee’s books have indicated the impugned receipts from scrap sales than any ‘other’ source inviting application of Section 57 of the Act. We conclude in this factual backdrop that the assessee’s scrap sales income deserves to be treated under the regular business head followed by assessment thereof @8%. Un-explained cash credits - HELD THAT:- We come to the first investor party herein, assessee’s Managing Director Shri M.Venkatesh, who has duly filed his confirmation and all supportive documents. He continues to be assessed in the same range jurisdiction as well. Hon'ble Gujarat high court decision in PCIT Vs. Gyscoal Alloys Ltd.. [2018 (10) TMI 1725 - GUJARAT HIGH COURT] holds that the impugned section 68 addition on explained cash credits involving such related parties does not deserve to be treated as ‘un-explained. We further wish to emphasise here that the assessee’s first investor is none other than its Managing Director; taking all key decisions could not be treated as a bogus entity in other words. We thus direct the Assessing Officer to delete the impugned addition. For latter three investor parties who have not filed confirmations all along but they have also been allotted the assessee’s shares - The Revenue also fails to dispute that neither the Assessing Officer never found fault with all this evidence of filing of confirmations followed by assessment records and payments made through banking channels but also he has not indicated any cash deposits or withdrawals so as to raise any suspicion qua all of them. We held in this factual backdrop that the assessee has duly discharged his burden of proving identity, genuineness and creditworthiness of the impugned share application money of ₹ 55,36,609/- on facts in other words. We make it clear that although both the parties have sought to rely on a catena of case law, the same does not need a detailed discussion as the assessee has very well proved its genuineness of the investor parties on facts.
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