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2020 (12) TMI 19 - AT - Income TaxUnaccounted cash receipts - on money for the additional work executed - statement recorded u/sec. 132(4) relied upon for making the addition - whether the entire additional receipt constitute income or not when unaccounted expenditure is also involved? - CIT(A) deleted the addition holding that the assessee has received the on money for the additional work executed by them and the entire receipts cannot be treated as income - HELD THAT:- AO made the addition solely on the basis of statement recorded u/sec. 132(4) without considering the other issues and facts involved in construction with regard to the additional expenditure related to construction of flats. No other evidence was brought on record by the AO to controvert the statement regarding receipt of additional receipts for additional work carried out by the assessee. This fact was supported by the information found from the table of the Accountant indicating the additional receipt as well as expenditure. The assessee has explained during the course of assessment proceedings that the additional income of ₹ 750/- per sq.ft. was accepted without taking into consideration of the land owners share. The assessee from the beginning explained that the additional receipts were received for earning the additional work. All these facts and circumstances support that only profit required to be brought to tax but not the entire receipts. The assessee had admitted the income @ 30% on additional receipts which appears to be fair and reasonable.The AO cannot make addition solely on the basis of statement u/sec. 132(4) without considering the entire facts and the expenditure, therefore we do not find any reason to interfere with the order of the ld.CIT(A) and the same is upheld and the appeal of the Revenue is dismissed for both the assessment years. Addition u/s 147 - As argued that the assessment made u/sec. 143(3) r.w.s. 147 is bad in law - HELD THAT:- . During appeal hearing, ld.DR did not place the reasons recorded by the AO for reopening the assessment before us. However, as seen from the assessment order the assessee has accepted the additional income u/sec. 132(4) on the basis of information collected by the AO during the search proceedings thus there was escapement of income and hence, we hold that reopening of assessment by issue of notice u/sec. 148 is valid.
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