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2016 (11) TMI 1295 - ITAT KOLKATA

2016 (11) TMI 1295 - ITAT KOLKATA - TMI - Revision u/s 263 - Advances for the flats - Held that:- We find that the assessee has shown both the figures of advance for the flats and sundry creditors under the head ‘booking advance of flats and sundry creditors’. Therefore in our considered, it is not appropriate to draw the conclusion that only the ld. CIT(A) directed to verify the advances for the flats only and not sundry creditors. It is also important to note that the assessee has not been co- .....

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stification of the sundry creditors. The necessary details include the address, PAN, confirmation, their income tax returns etc. However, we find that the assessee failed to produce the same in spite of several opportunities. In our considered view merely paying the amount through banking channel and submitting the bank statements in support of it, the assessee does not get discharged from his responsibility. However, at the same time we cannot ignore the fact that the assessee has shown its inc .....

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re inclined to give one more opportunity to the assessee to justify the amount of creditors. - Advance received against the sale of flat - Estimation of profit - Held that:- We find that assessee in earlier year has declared profit @ 2.35% which was accepted by the Department. In our considered view, the estimated profit calculated@ 20% is on much higher side. After considering the facts in totality we restrict the estimated profit @ 5%. Hence, this ground of assessee’s appeal is partly allo .....

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ferred to as the Act ) vide his order dated 30.12.2011 for assessment year 2006-07. The grounds raised by the assessee per its appeal are as under:- 1) That the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of ₹ 78,45,882, made by the Assessing Officer in the order passed under section 263/144 of the Act, which sum represented balances of Sundry Creditors as on 31st March, 2006 and which was not the subject matter of directions issued by the Commissioner of Inco .....

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Tax (Appeals) erred in rejecting the remand report of the Assessing Officer and confirming the aforesaid addition of ₹ 78,45,882. 4) That the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of ₹ 4,60,000 made by the Assessing Officer estimating 20% of profit element on advances against sale of flats constructed by the Assessee. Shri A.K. Tibrewal, Ld. Authorized Representative appeared on behalf of assessee and Shri Sallong Yaden, Ld. Departmental Represent .....

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of Civil Constructions. The original assessment was framed on dated 18- 9-2008 at a total income of ₹10,05,520/-. Thereafter the proceedings were initiated under section 263 of the Act for seeking the clarification of the balance sheet item shown as booking advance of flats and sundry creditors for an amount of ₹ 1,76,46,882/-. In response to the notice u/s 263 of the Act the assessee submitted that the aforesaid figure of ₹ 1,76,46,882/- consists of two transactions head i.e. .....

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the Act directed to pass a fresh assessment order with the following directions : (a)- (b) The issue regarding the taxability of advance against flat should be examined with a view to ascertain as to whether the same would be taxable in the year under review. The AO in his order passed u/s 144/263 of the Act has disallowed entire sundry creditors for ₹ 78,45,882/- on the ground that the postal addresses of sundry creditors with other necessary details were not furnished, so no enquiry wha .....

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arded the plea of the assessee by observing as under :- (a) Additional ground of appeal: The Additional Ground is only on the issue of Sundry Creditors. As discussed above this Additional Ground of Appeal was admitted as no fresh evidence is required to be brought on record to adjudicate the same. It is seen from the order u/s. 263 of the Act that in para 1(b), the CIT had asked the assessee to furnish an explanation concerning a sum of ₹ 1,76,46,882/- declared as booking Advance for Flat .....

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ssee. In Para 7 the CIT categorically notes that the assessee had not submitted the requuired details and has not substantiated the explanation furnished. The CIT is clear terms notes further that the AO has not verified the issues stated at clause (a) to (c) of paragraph (1) of his order during the course of assessment proceedings. The CIT accordingly set aside the assessment and directed the AO to pass a fresh assessment order after carrying out inter-alia certain verification. This part of th .....

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has given a finding that the assessee has not submitted the required details and papers as requisitioned on 01.11.2010 and hence has not substantiated the explanation furnished. The term explanation furnished includes the explanation offered by the assessee for the Sundry Creditors. In view of the above discussion it is held that the Additional Ground of Appeal of the assessee requires to be rejected as it is not covered by the case laws of : 1. CIT v. Hindusthan Coconut Oil Mill (2002) 255 ITR .....

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y creditors . Therefore in our considered, it is not appropriate to draw the conclusion that only the ld. CIT(A) directed to verify the advances for the flats only and not sundry creditors. It is also important to note that the assessee has not been co-operative at the time of impugned proceedings u/s 263 and 144 of the Act. Considering the fact and circumstances of the case, we uphold the order of Ld. CIT(A) and this ground of assessee is dismissed. 6. The second inter-connected issue raised by .....

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e assessee. 8. Aggrieved assessee preferred an appeal to ld. CIT(A) whereas it was submitted that all the sundry creditors were paid in the subsequent year through account payee cheque. This fact of payment with bank statement was produced before the AO at the time of remand report. The assessee also submitted that two sundry creditors died and in support of his claim he filed death certificates of two parties. However, the AO submitted in his remand report that the notices u/s 131 of the Act wa .....

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tion from the parties whose address were supplied and it is not possible to verify creditors from the bare name and city detail filed by the assessee. Further, the purpose of verifying sundry creditor is to examine not only their identity and genuineness of the transactions but also their capacity to supply the goods. These verification are not possible to be done by only a cursory examination of bank account. The assessee has not produced any bill, ledger account or other challan/receipts to pr .....

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age, does not help the case of the assessee. Therefore, the Remand Report of the AO is not relied upon and the addition of ₹ 78,45,882/- is confirmed for the reason that the assessee has not been able to prove the same. As a result the Revised Ground of appeal No. 3 is dismissed. Being aggrieved by the order of ld. CIT(A), the assessee came in second appeal before us. 9. Before us Ld. AR submitted paper book which is running from pages 1 to 92 and he reiterated the same submission as made .....

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address, PAN, confirmation, their income tax returns etc. However, we find that the assessee failed to produce the same in spite of several opportunities. In our considered view merely paying the amount through banking channel and submitting the bank statements in support of it, the assessee does not get discharged from his responsibility. However, at the same time we cannot ignore the fact that the assessee has shown its income from the business of civil construction which has been accepted and .....

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