TMI Blog2014 (3) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ₹ 60,350/- in hand as on 31-8-2007 - These figures are demonstratively mentioned by AO in his order - When assessee had only meager cash balance, it is not understandable as to how assessee can credit ₹ 10 crores in his books - Prima facie, there is no justification in the assessee's act of crediting an amount of ₹ 10 crores in its books of accounts - it may amount to income of the assessee as unexplained income in the absence of availability - the issues in question have not been properly considered by the CIT(A) – thus, the order set aside and the matter remitted back to the AO for fresh consideration – Decided in favour of Assessee. - ITA No. 3112/Del/2011 - - - Dated:- 27-2-2014 - Shri R. P. Tolani And Shri B. C. Meena,JJ. For the Appellant : Shri R. S. Meena CIT (DR) For the Respondent : Shri G. C. Srivastava Adv. Shri Saurabh Srivastava CA Shri Vikrant Suri CA ORDER Per R. P. Tolani, J. M. This is revenue's appeal against CIT(A-1), New Delhi's order dated 29-03-2011 pertaining to A.Y. 2008-09. Sole effective ground raised is as under: whether on facts and circumstances of the case, the Ld. CIT(A) is justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound and seized from none other than the cashier of the group lead the Managing Director to surrender an amount of Rs.l 0 crore additional incomes in the hands of the assessee company. In this respect, reference is made to the statements of Shri Sharvan Gupta recorded on 12.09.2007 [u/s. 132(4)], 16.10.2007 (u/s. 131) and 07.11.2007 [u/s 132(4)] wherein he has given a bifurcation of the surrender ofRs.225 crores for the entire group. The relevant portion of the statement recorded on 16.10.2007 is as under: I would like to bifurcate our overall income of Rs.225 crores as under: Rs.160 crore as income (net of brought forward losses) for current financial year i.e. 2007-08 in M/s. Emaar MGF Land Ltd. which has resulted from recognition of revenue by following percentage completion method of accounting. The remaining Rs.65 crores as Income in the books of other Emaar MGF group ompanies/concerns/individuals and other entities on the basis of material found and seized during the search operations and change in method of accounting. the details of the same shall be provided after verification of the records The details as mentioned above in the statement were furnished before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary from builder to builder. The fact that the cash component is always out of the books no expense incurred wholly and exclusively for the purpose of business can be said to have been incurred out of the cash receipts. In other words, any attempt by any assessee to adjust business expenses out of the cash receipts, by showing the cash as advance from customers, needs to be discouraged in the interest of revenue. 7.2 It is a well established presumption that any cash found during search, for which supportive documents were also found, is without any encumbrance meaning thereby the cash has to be taxed in its entirety. In the case at hand, the typed sheet that was found in the cabin of Sh. N.D. Mishra, cashier of the assessee group, having nearly 30 years of work experience in the group, had the details including the dates of receipt, shop no, respective amounts etc. The impugned amounts are not reflected in the books of the assessee. No other documentary evidence could be produced at the time of search which could have thrown light on the fact that the respective amounts mentioned in the typed sheet is really accountable. It need not be emphasized that all unaccounted receipts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that entire amount of Rs. 10 crores surrendered by the assessee ought to be taxed in this year by following observations: 10.1 It may be mentioned here that on money received in cash cannot never from pan of budgeted exercise. Meaning thereby cash component cannot be taken to the contract sale value. Similarly, any unaccounted expense incurred can also not been taken to the cost of project. It needs to be emphasized here that part of the project had been sold for only cheque value of consideration to the sister concern of the assessee M/s MGF Development Limited giving under advantage to the sister concern. As per the accounting principle followed, the entire on money amounting to Rs. 94l.25 Lacs. (Surrendered Rs. 10 crores) is required to be separately taxed in A.Y. 2008-09. 10.2 As per another working if profitability of the project IS computed (Annexure -B) without taking into account the cash component, the loss from the project works out to be Rs. 79.85 Lacs. With the above observation the taxable income of the assessee is computed as below: Loss as per working (Rs. 79,85,102/-) In (Annexure -B) Add: On money received in cash Rs. 10,00,00,000/- Rs. 9,20,14,898 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made by the assessee based on percentage completion method was correct. Ratio of decision of Dhanvarsha Builders Developers v. DCIT that income is to be computed as method of accounting is applicable. Therefore, the action of Assessing officer in bringing to tax the amount of Rs. 10 crore as against Rs. 4,60,51,254/- taken into consideration by the appellant based on system of accounting cannot be sustained. Hence, addition of Rs. 10,00,00,000/- made by theAo is deleted. 2.4. Aggrieved, revenue is in appeal before us. 3. Ld. DR vehemently argues that ld. CIT(A) has totally mis-carried himself by deleting the addition. The order is assailed on various grounds: (i) If the addition of Rs. 10 crores is deleted and the effect thereof is given to the computation of income made by AO, in that case what remains to be assessed is a loss of Rs. 79,85,102/- as per Annexure 'B' appended by the assessing officer with his order, whereas the income returned by the assessee itself is Rs. 4,63,44,560/-. (ii) CIT(A)'s order is unsustainable as having been passed without proper application of mind. Ld. CIT(A) has relied on various case laws instead of appreciating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying on various case laws allowed the relief. 4. Ld. Counsel for the assessee, on the other hand, pleads that the ld. CIT(DR) is making out a new case and relied on Hon'ble Calcutta High Court judgment in the case of ITO vs. R.L. Rajghoria 119 ITR 872, holding as under: There can be no doubt that the Tribunal has the power to remanding a case to the AAC or the Income-tax Officer, as the case may be, requiring him to hold further enquiry and to dispose of the case on the basis of such enquiry. But the jurisdiction of the Tribunal is confined only to the subject- matter of the appeal. In the instant case, the question as to whether the loss was speculative loss was the only question which was sought to be agitated before the Tribunal. Admittedly, the question whether the loss was a capital loss w3as neither included in the grounds taken before the Tribunal originally, nor permitted to be taken subsequently, by the Tribunal. The Tribunal in deciding the case went out of its way and though the question whether the loss was a capital loss was not within the scope of its authority did take up that question and the determination of that question necessitated the sending of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the CIT(A)'s order, then assessed income comes to a loss of Rs. 79,85,102/- as against income of Rs. 4,63,44,560/-. (ii) We find merit in the argument of ld. DR that even if the issue of percentage completion method is kept aside, there is absolutely no justification in the act of the assessee crediting an amount of Rs. 10 crores towards the surrender in its books of a/cs. This is so because it is demonstratively apparent out of cash 'on money' of Rs. 9.41 crores appearing from seized papers an amount of Rs. 9.40 crors stands utilized leaving a meager balance of Rs. 60,350/- in hand as on 31-8-2007. These figures are demonstratively mentioned by AO in his order. When assessee had only meager cash balance, it is not understandable as to how assessee can credit Rs. 10 crores in his books. Prima facie we see no justification in the assessee's act of crediting an amount of Rs. 10 crores in its books of a/cs. In other words it may amount to income of the assessee as unexplained income in the absence of availability. 5.1. In our considered view, the issues in question have not been properly considered by the ld. CIT(A). Besides our query could not be satisfactor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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