TMI Blog2018 (4) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... s engaged in the business of Construction Activity and Real Estate Development. A survey under section 133A of the Act was conducted at its business premises on 15.03.2011, wherein, the survey party had found and impounded certain incriminating documents. One such impounded document is marked as Annexure- 4, which is a ledger, and as per details recorded therein, it was found that the assessee had received cash advances amounting to ₹ 8,00,02,000/- from 43 persons during financial year 2010-11. On examination, it was found that the assessee had received such amounts by doing transactions outside its books of account, as these were not recorded in the assessee's regular books of account. The assessee was confronted with and asked to explain, by the Survey Party, such significant discrepancies involving cash receipt of ₹ 8,00,02,000/- as per the notations appearing in the said document, i.e., ledger marked as Annexure A-4. The assessee was further asked to explain whether the amounts were recorded in the books of account. However, the assessee could not furnish any explanation about the non-inclusion of such amounts in its regular books of account, and besides, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock value. It was also observed that besides, it was against the actual findings which were noticed during the course of survey, and at the same time, in being against the documentary evidences in the shape of valuation submitted by the assessee from its own registered valuer. Thus the AO, while framing the assessment, denied the benefit of closing stock for the assessment year 2011-12 and the opening stock for the assessment year 2012-13 to the assessee in respect of ₹ 6 Crore on the ground that it was never stated in the statement recorded that there was any investment which was made in the value of building construction under progress as shown by the assessee. 3. The ld. CIT(A), dismissing the assessee s appeal, observed as follows: 5. I have considered the facts of the case, the written submissions as filed by the Ld AR for the appellant and perused the order of the AO with relevant facts on record Besides, the report as submitted from the AO and rejoinder on same as filed by the Ld AR have also been considered. It is an admitted fact that the appellant had surrendered the amount of ₹ 8,00,02,000/- in respect of money received from various persons which wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i City' and Maruti Residency during the previous year relevant to assessment year 2011-12 are made Annexure-A and Annexure- B respectively to this order 5.3 It is also seen from the Trading Account furnished by the appellant that expenses incurred during the year under appeal in Maruti City project excluding the claim of investment as per survey is ₹ 4,34,50,488/- whereas the architect Sh. Amit Juneja has certified the investment only to the extent of ₹ 34.75 lacs. Similarly in the project Maruti Residency. the expenses incurred during the year under appeal is ₹ 1 whereas the architect Shri Amit Juneja of AADHARSHILA' has certifed the investment to the extent of ₹ 2.47 Cr. Thus the investment in both the projects certified by the appellant's own architect are not matched with the investment as claimed by the appellant. The claim of the appellant regarding investment of ₹ 6 Cr. in Maruty City as per survey is not found acceptable in view of the certificate of the appellant's own architect who has certified the investment in Maruti City' project only at ₹ 34.75 lacs. Since the investment in both the projects are not commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome in the Profit and Loss Account which is represented by cash. However, the AO has taken the statement as partly correct and has accepted the income of ₹ 2,00,02,000/- represented by cash and has disowned that very statement in part by not accepting the investment of ₹ 6 Crore in Maruti City Project. However, the income component has been accepted by him. Once the AO has accepted the income component which was not duly recorded in the books of account till the date of survey, then it is not understood that how the AO could disallow the other balancing part of the same income which is the investment in Maruti City Project. The Assessing Officer cannot have two yard-sticks to assess the income of the assessee. The statements and facts have to be accepted in totality and not in piece-meal as suits the Assessing Officer. The assessee has followed the provisions of the Companies Act and that is why both the entries of income are on the credit side and in the debit side, the balancing entries for the same in cash account and in work done account have been passed. It is further claimed that once the assessee is in the construction business, the unaccounted amount which is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he queries raised during the course of assessment stage and further substantiated the investment for work done by submitting the certificate of registered architect, which has not been found to be false by the AO. Further no specific show cause notice was given before denying the benefit of ₹ 6 crore in work-in-progress. 7. The Ld. CIT(A), in his order, at page 7, para 5, has mentioned that the director never stated in his statements, or even before the AO, that the amount received from various persons was invested in work in progress of Maruti City project. In this regard, it is the submission of the assessee no question was asked by the survey party with regard to investment done and further, before the AO, in the assessment proceedings, it is clearly mentioned by the assesse that the advances received have been invested in the project under consideration during the period itself, as per para 3(iv) page 2 of the A.O's order. 8. The Ld. CIT(A) has further stated in para 5.1 of his order, that the amount invested in Maruti Residency project, as certified by the assessee's architect, is ₹ 4.25 crore and the investment done in F.Y. 2010-11 is ₹ 2.47 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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