TMI Blog2019 (7) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 2,38,737/- subject to his verification. Deduction u/s 54F - on enquiry the Inspector reported that the plot is lying vacant and there is no construction work carried over the said plot - HELD THAT:- We find neither the assessee has constructed the house property during the year as claimed nor deposited the long term capital gain of above amount in the specified capital gain accounts scheme. Therefore, when the assessee has not fulfilled the conditions laid down in section 54F the argument of the Ld. Counsel for the assessee that the same can be taxed only in the AY 2015-16 i.e. after the expiry of 3 years is not acceptable as not being in accordance with law. Therefore, the order of the CIT(A) on this issue is upheld and the ground raised by the assessee are dismissed. Disallowance of depreciation - depreciation on machines sold - HELD THAT:- It is the submission of the Ld. Counsel for the assessee that only an amount of ₹ 15,383/- has been claimed as excess depreciation and not ₹ 44,721/- as held by the AO and upheld by the CIT(A) and, therefore, this matter may be set aside to the file of the AO. In view of the above submission by the Ld. Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained with ICICI Bank. He, therefore, asked the assessee to explain the source of cash so deposited. It was submitted by the assessee that out of the above amount of ₹ 32,22,140/- deposited in ICICI Bank an amount of ₹ 15,39,800/- was deposited by the outstation Debtors. Purchases were made against such sale amounting to ₹ 14,63,984/-. The assessee earned a profit of ₹ 75,816/- which was not shown while filing the return of income and, therefore, the assessee wants to surrender the same. However, the AO was not satisfied with the explanation given by the assessee on the ground that no details of parties to whom the sales were made, no confirmations with address and PAN Number of the Debtors and no details of the parties from whom purchases were made along with their confirmation address and PAN etc. were submitted. He, therefore, again asked the assessee to explain as to why the claim should not be disregarded and the addition of ₹ 32,22,140/- should not be made. The assessee again submitted that the sale of ₹ 15,39,800/- were made to parties in cash and purchase of ₹ 14,63,984/- was also made in cash and hence, no details of creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has been changing his stand from the very beginning as mentioned above. The total turnover of the assessee is more than ₹ 2 crore much beyond the limit prescribed in section 44AD. The so called business of trading in chemicals done by the assessee through ICICI Bank account was totally unaccounted. Assessee never bothered to disclose the business in his return of income. From the conduct of the assessee it is crystal clear that the assessee wanted this business to remain hidden from tax authorities from the very beginning. He never intended to pay tax on this business. It was only after the AO confronted the assessee with AIR information, the assessee admitted having the bank account and having cash transactions therein. It was only when the assessee was cornered by the AO the assessee came up with the explanation that he was doing trading of chemicals which was not disclosed in his return of income. Turnover of this business was more than ₹ 32 lacs. Number of transactions in the bank statement clearly shows that it was not a one time affair. The assessee is also not new to financial world. He is carrying out h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the cash deposited in ICICI Bank account was not out of earlier cash withdrawal. However, the amount and place of cash of deposits do indicate that these may be sale proceeds of some business carried out by the assessee. It implies that there must be purchases also to enable the assessee to make sales. If the assessee s version of unaccounted purchases of ₹ 14,63,984/- is believed, it will result in unaccounted profit of ₹ 32,22,140 ₹ 14,63,984 = ₹ 17,58,156/-. In my view the addition on account of unaccounted cash deposits should be restricted to ₹ 17,58,156/-. 5. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 5.1 The Ld. Counsel for the assessee strongly challenged the order of the Ld. CIT(A). He submitted that before AO and the CIT(A) the assessee explained the amount deposited in the ICICI Bank which is basically out of the receipts of unaccounted sales as well as cash in hand. He submitted that the assessee filed the reconciliation reflecting the position of cash withdrawals and cash purchases. Referring to page no. 62 of the PB, the Ld. Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the peak credit. For the above proposition the Ld. DR relied on various decisions. He, accordingly, submitted that since the CIT(A) has given substantial relief to the assessee for which the Revenue is not in appeal before the Tribunal, therefore, the order of the Ld. CIT(A) should be upheld and the grounds raised by the assessee should be dismissed. 7. We have considered the rival arguments made by both the sides, perused the orders of the authorities below and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case made an addition of ₹ 32,22,140/- being the cash deposited in the ICICI Bank account of the assessee on the ground that assessee could not explain the nature and source of such deposits to his satisfaction. While doing so he rejected the claim of the assessee that out of such deposits an amount of ₹ 15,39,800/- was deposited by the out station debtors and the assessee had made purchases of ₹ 14,63,984/- and has earned an amount of ₹ 75,816/-. We find the Ld. CIT(A) after considering the various submissions made by the assessee sustained an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement with the contractor for construction of a residential unit along with bills of contractor and ledger account of material suppliers. The AO deputed the Inspector to report on the status of the construction. The Inspector reported that the plot is lying vacant and there is no construction work carried over the said plot. The AO, therefore, confronted the same to the assessee. The assessee replied that the building could not be constructed due to non-sanctioning of the plan although the intention of the assessee were to construct the residential house. The AO rejected the argument of the assessee and held that the assessee has not fulfilled the condition laid down in section 54F. He, therefore, made an addition of ₹ 9,54,544/- to the total income of the assessee. 11. In appeal, the Ld. CIT(A) upheld the action of the AO by observing as under: - Ground no. 3 : is against disallowance of ₹ 9,54,544/- u/s 54F. As mentioned above the assessee had claimed deduction of ₹ 9,54,544/- out of long term capital gain earned on sale of property at plot no. 95, phase-4, sector 56, HSIIDC, Kundli, Haryana. For claiming deduction u/s 54F t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions relied on by both the sides. We find the AO made addition of ₹ 9,54,544/- by rejecting the claim of deduction made u/s 54F out of the long term capital gain on sale of property on the ground that assessee has not fulfilled the conditions of the said section by not constructing the house property as claimed. We find the CIT(A) upheld the action of the AO, the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the Ld. Counsel for the assessee that as per the provisions of section 54(1) of the I.T. Act, 1961, the assessee is entitled to utilize the long term capital gain for construction of a house property within a period of 3 years and, therefore, addition, if any, can be made only in the AY 2015-16 and no addition can be made in this year. For the above proposition, he relied on the decision of the Kolkata Bench of the Tribunal in the case of Mahesh Pal Arora vs. ITO vide ITA No. 206/Kol/2013 order dated 29.03.2016. However, we do not find any merit in the above argument of the Ld. Counsel for the assessee. We find neither the assessee has constructed the house property during the year as claimed nor deposited the long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation to the actual amount of excess claim. This ground of assessee is partly allowed. 19. Ground of appeal no. 5 reads as under: 5. That the Ld. CIT(A) erred in law and on facts in confirming the ad-hoc addition of ₹ 80979/- being disallowance @ 1/5th out of expenses claimed under the heads of car insurance, communication expenses, interest on car loan, vehicle running maintenance expenses and depreciation on car in the facts and circumstances of the case. 20. After hearing both the sides, we find the AO disallowed an amount of ₹ 80,979/- being 20% of the following expenses for want of details and probable personal use: - 1. Car Insurance ₹ 16,054/- 2. Communication Exp. ₹ 57,212/- 3. Interest on car loan ₹ 92,567/- 4. Vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
