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Asst. Commissioner of Incometax, Circle – 2 (1) , Hyderabad Versus M/s Jahnavi Infrastructure Pvt. Ltd., Hyderabad

2015 (7) TMI 726 - ITAT HYDERABAD

Undisclosed income of assessee - CIT(A) deleted the addition - Held that:- Assessee has shown ₹ 3,00,000 as the amount received when sale took place and balance ₹ 3,00,000 as development charges. Therefore, in our view, in case of each of the transaction, an exercise has to be undertaken to find out not only the fact whether they appear in the accounts of assessee but also whether there is any variation between the amounts received as per list submitted by assessee and the loose shee .....

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ile of AO for deciding the same after reasonable opportunity of hearing to Assessee to explain its case. AO must verify the documents submitted by assessee and thereafter take a decision in the matter. - Decided in favour of revenue for statistical purposes.

Disallowance made u/s 40A(3) - CIT(A) deleted the addition - Held that:- Though, assessee claimed before ld. CIT(A) that payments were made to persons at places where banking facility is not available, but, in our view, assessee’s .....

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es within the purview of rule 6DD. AO must afford reasonable opportunity of being heard to assessee before deciding the issue.- Decided in favour of revenue for statistical purposes.

Disallowance made u/s 40(a)(ia) - CIT(A) deleted the addition - Held that:- As can be seen, against the payment towards agent commission, assessee has deducted an amount of ₹ 1,38,300 and remitted to the govt. account, hence, AO’s allegation that no tax was deducted is incorrect. As far as the devel .....

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need to be verified by AO. - Decided partly in favour of revenue for statistical purposes.

Disallowance of expenditure - CIT(A) restricting the disallowance - Held that:- As can be seen while AO has disallowed 10% expenditure out of the expenditure claimed by assessee under various heads, ld. CIT(A) has restricted the disallowance to the expenditure claimed towards development expenditure, site visit expenditure, survey charges and preliminary expenses. In our view, the decision of l .....

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expenditures where there are no supporting evidences, therefore, no further disallowance should be made. In view of the aforesaid, we uphold the order of ld. CIT(A) on this issue by dismissing the ground raised.- Decided against revenue. - ITA No. 511/Hyd/2013 - Dated:- 15-7-2015 - Shri B. Ramakotaiah and Shri Saktijit Dey, JJ. For the Petitioner : Shri Rajat Mitra For the Respondent : Shri S. Rama Rao ORDER PER SAKTIJIT DEY, J.M.: This appeal by revenue is directed against the order dated 4/01/ .....

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return of income on 31/10/2007 declaring total income of ₹ 28,66,090. During the assessment proceeding, AO found from the material on record that survey was conducted in case of assessee on 30/10/2006, during which, certain material was impounded . As stated by AO, in course of assessment proceeding, though, assessee was granted repeated opportunities to produce its books of account, but, it did not produce them on some pretext or other. AO, therefore, proceeded to complete the assessment .....

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rial found during the survey, AO found that assessee has sold plots to 54 persons and received an amount of ₹ 54,31,500 in white and ₹ 1,29,28,500 in black. AO after going through the impounded material, observed that contents of loose sheets when read along with registered sale documents, revealed that assessee is collecting amounts over and above the sale value mentioned in the sale documents, which is not disclosed to the department. From the amount mentioned in white and black as .....

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d before ld. CIT(A). 5. In course of hearing of appeal before ld. CIT(A), it was submitted, assessee sales plots to the customers after developing them. It was submitted that the amount mentioned in the sale deed is the cost of land and the amount alleged to have been received in black is actually development charges received from the purchasers of land and recorded in the books of account as advances received from customers. It was submitted, for the purpose of registration only the cost of lan .....

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nt for each of the plot is more than the amount mentioned in the impounded document. 6. Ld. CIT(A) on verifying the facts and materials placed before him agreed with assessee that the amount debited in the books of account is more than the amount mentioned in the impounded documents. He observed that though assessee has bifurcated the total consideration received under two different heads, towards sale of land and development charges, however, both were considered by assessee as income, hence, A .....

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with written submissions and supporting documents filed by assessee before ld. CIT(A), but, no such documents were supplied to him. In this context, ld. DR brought to our notice letters dated 12/07/12 of AO to Ld. CIT(A) as well as assessee. Thus, ld. DR submitted, when assessee submitted statements/books of account before ld. CIT(A) for the first time for reconciling/explaining discrepancies/omissions found as a result of the incriminating material impounded at the time of survey, ld. CIT(A) s .....

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uments, which were also before AO in the form of final accounts. Ld. AR submitted, though books were not available at the stage of assessment, but, it is a fact that assessee maintained books of account and audited final accounts prepared on the basis of such books of account. Ld. AR referring to the P&L A/c for the year under consideration and balance sheet of the impugned year submitted before us, if figures mentioned therein towards advances from customers shown under the head current lia .....

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adjusted advances by taking it to the P&L a/c in the subsequent AYs. Thus, it was submitted by ld. AR, there is no black and white income earned by assessee as alleged by AO by relying upon impounded material, but, assessee has shown the entire income in its books of account. 9. We have considered the submissions of the parties and perused the orders of revenue authorities as well as other material on record. Admittedly, assessee has not produced the books of account or any other informatio .....

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of ₹ 54,31,500 in white and ₹ 1,29,28,500 in black. However, it is the claim of assessee amounts purportedly received in white actually represent the cost of land as per the registered documents whereas the amount received in black is the development charges received by assessee from purchasers. However, both the amounts have been recorded in the books of account. In this context, assessee has referred to list of purchasers, copies of which are at pages 42 to 47 of the paper book. O .....

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ial. For example, in case of G. Janardhan, the amount received as per the impounded material is as under: ₹ 1,77,500 white and ₹ 4,22,500 - black, total ₹ 6,00,000 When this is juxtaposed to the list submitted in the paper book, it is seen that assessee has shown ₹ 3,00,000 as the amount received when sale took place and balance ₹ 3,00,000 as development charges. Therefore, in our view, in case of each of the transaction, an exercise has to be undertaken to find out .....

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ted the addition merely relying upon the submissions of assessee. In the aforesaid view of the matter, we set aside the order of ld. CIT(A) on this issue and remit the matter back to the file of AO for deciding the same after reasonable opportunity of hearing to Assessee to explain its case. AO must verify the documents submitted by assessee and thereafter take a decision in the matter. This ground is allowed for statistical purposes. 10. The next issue as raised in ground No. 7 is with regard t .....

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whom payments were made are staying in villages where banking facilities are not available, hence, such payments are within the exception provided under Rule 6DD. Ld. CIT(A) accepting the claim of assessee, deleted the addition. 12. We have considered the submissions of the parties and perused the material on record. Though, assessee claimed before ld. CIT(A) that payments were made to persons at places where banking facility is not available, but, in our view, assessee s claim has to be proved .....

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rule 6DD. AO must afford reasonable opportunity of being heard to assessee before deciding the issue. 13. The next issue as raised in ground No. 8 relates to disallowance made u/s 40(a)(ia) of the Act but deleted by ld. CIT(A). 14. Briefly the facts are, during the assessment proceeding, on verifying the P&L account, AO found that assessee has made some payments without deducting tax at source. Such expenditure quantified by AO are as under: Sl.No. Particulars Amount 1. Agent Commission 27, .....

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e. As far as the development charges of ₹ 43,79,683 is concerned, assessee submitted that out of the said amount assessee has deducted tax at source on an amount of ₹ 21,27,450 and offered the balance amount of ₹ 22,52,233 to tax. As far as the rent payment of ₹ 2,67,318 is concerned, assessee submitted that since payments are less than the prescribed amount of ₹ 10,000 per month there is no requirement of deduction of tax at source. In respect of development charge .....

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an amount of ₹ 1,38,300 and remitted to the govt. account, hence, AO s allegation that no tax was deducted is incorrect. As far as the development expenses are concerned, assessee has deducted tax on amount of ₹ 21,27,450 and the balance amount of ₹ 22,52,333, assessee itself disallowed and added back in the computation of income. Therefore, allegation of AO is proved to be wrong. Therefore, we agree with ld. CIT(A) in deleting these two additions. As far as, rent payment and p .....

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