TMI Blog2019 (10) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Lacs from WIP account. Additions u/s 69C - HELD THAT:- Upon perusal of factual matrix, we find that total expenditure found to be incurred by the assessee was ₹ 37.67 Lacs. Out of this expenditure, the amount paid through cheques was ₹ 12.73 Lacs. The cash expenditure is stated to be made to the extent of ₹ 15 Lacs, for which the assessee has already been saddled with disallowance u/s 40A(3) @20%. This would leave unexplained balance of ₹ 9.94 Lacs. The same would stand confirmed in view of the fact that the source of the same remained unexplained. Hence, the addition to the extent of ₹ 9.94 Lacs stands confirmed. These grounds stand partly allowed. - I.T.A. No.3657/Mum/2012 - - - Dated:- 14-10-2019 - Shri Saktijit Dey, JM And Shri Manoj Kumar Aggarwal, AM For the Appellant : Shri D.V. Lakhani-Ld. AR For the Respondent : Shri K. Madhusudhan-Ld.CIT-DR ORDER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1.1 Aforesaid appeal by assessee for Assessment Year [AY] 2006-07 contest the order of Ld. Commissioner of Income-Tax (Appeals)-23 Mumbai, [in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause for filing appeal late. The appellant prays that the delay may be condoned and appeal may be admitted. 1.2 The registry has noted a delay of 36 days in filing of the appeal, the condonation of which has been sought by the assessee vide condonation petition dated 19/05/2012 by submitting that the assessee had preferred a rectification application u/s 154 before Ld. Assessing officer against order giving effect and was under a bona-fide belief that the appeal was not be preferred before Tribunal. Keeping in view the period of delay and explanation furnished by the assessee, the bench formed an opinion that in the interest of justice, the delay was to be condoned. Therefore, we proceed to dispose-off the appeal on merits as per argument advanced by both the representatives. We have heard and considered the arguments, perused relevant material on record and deliberated on judicial pronouncements as cited before us. As evident from grounds of appeal, the assessee is contesting the addition of ₹ 10 Lacs being sale of scarp material, addition of ₹ 3 Lacs u/s 40A (3) and an addition of ₹ 14.34 Lacs u/s 69C. Ground Nos. 6 7 contest levy of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Consequently, proceedings u/s 153C was initiated for AYs 2003- 04 to 2007-08. It transpired that the assessee obtained loans from various concerns and utilized the same mainly for advancing loans to partners and other group concerns and towards creation of work-in-progress (WIP). During the year, the amount of WIP increased from ₹ 12.14 Crores to ₹ 12.94 Crores i.e. reflected increase of ₹ 0.80 Crores. The assessee submitted that since there was no taxable income from projects, no return of income was ever filed for all the years. The last return was stated to be filed for AY 2001-02. 2.5 Upon perusal of cash book, it transpired that the assessee was in receipt of ₹ 10 Lacs in cash from sale of scrap. It was submitted that the said amount was reduced from WIP. However, the assessee did not file any supporting to show that amount was reduced from WIP. Moreover, the sale of scrap, in the opinion of Ld. AO, could not be co-related to the WIP and the expenses debited to Profit Loss Account could not be considered as incurred for earning the income from sale of scarp. Accordingly, the said income of ₹ 10 Lacs was broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 37.67 Lacs, the amount of ₹ 12.73 Lacs was paid by Cheque while amount of ₹ 15 Lacs was spent in cash since the disallowance u/s 40A(3) was made by Ld.AO at 20% resulting into addition of ₹ 3 Lacs in the hands of the assessee. Therefore, the balance amount left would be ₹ 9.94 Lacs and not ₹ 14.34 Lacs as determined by Ld. AO which may be added with a view to conclude the matter. The Ld. first appellate authority, after appreciation of factual matrix directed Ld. AO to verify the cheque payments and add the differential amount to the income of the assessee. Upon perusal of order giving effect dated 07/02/2012, it is observed that the income has been re-computed at the same figures and no relief has been granted to the assessee. Aggrieved, the assessee is in further appeal before us. 4. We have carefully considered the factual matrix as enumerated by us in the preceding paragraphs. So far as the addition of ₹ 10 Lacs representing sale of scrap is concerned, it is observed that the assessee was undertaking development of certain project and sole activity being carried out by the assessee was construction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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