TMI Blog2021 (4) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 6,47,500/- and the ld. CIT(A) held that this cash is part of the turnover which is not disclosed by the assessee, therefore, the AO shall tax it at the rate of 8.04% in terms of section 44AD (8.04% declared by assessee). In view of the above facts and circumstances of the case, we find no infirmity in the order of the ld. CIT (A), the same is upheld. Ground no. 1 is allowed. Addition on account of interest payment on the loan taken on 25.05.2012 and returned on 12.01.2013 - AO made the addition of this amount on the ground that the same was not verifiable from the books of accounts - CIT(A) has deleted the addition under consideration by holding that the statement recorded u/s 132(4) of the Act, the assessee has categorically stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of account - HELD THAT:- . In view of this, the statement recorded u/s 132(4) would prevail over statement recorded u/s 131 - assessee has further quoted various board circulars decrying surrender in confessional statement. CIT(A) has in agreement with the submission of the assessee that when income was declared u/s 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein it has been stated that the above page itself discloses that it was an estimate of expected expenditure on construction at three sites. Further the assessee has submitted these construction work receipts stand disclosed in Assessment Year 2013-14 of ₹ 98,60,000/- and Assessment Year 2014-15 of ₹ 56,40,320/-. Considering the above facts and circumstances of the case as discussed by the ld. CIT (A), we find no infirmity in the order of the ld. CIT (A), the same is upheld. Addition based on the statement under section 131 on account of unaccounted expenditure - Addition based on seized paper - CIT(A) has deleted the addition under consideration by holding that in the statement recorded u/s 132(4) of the Act, the assessee has categorically stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of accounts - HELD THAT:- We find that the ld. CIT (A) after considering the facts of the case as well as the submissions of the assessee has rightly concluded there was no case for making addition of the cash payment which stood covered by the deemed expenditure of ₹ 51,86,680/-. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2014-15 declaring total income at ₹ 3,61,810/- under the provisions of section 44AD of the Income Tax Act, 1961. After introduction of section 44AD the assessee has opted the presumptive scheme under section 44AD and has been regularly filing the returns since 1996-97 onwards. A copy of the acknowledgement of return for the assessment year 2014-15 along with computation of income is available on record. The AO while making the assessment, accepting the returned income of ₹ 3,61,810/-, assessed the total income at ₹ 1,79,39,030/- for the A.Y. 2014-15 by making various additions. The assessee challenged the action of the AO before the ld. CIT (A), who partly allowed the appeal of the assessee. 3. Aggrieved by the order of the ld. CIT (A), the revenue filed appeal before this Tribunal. The ld. D/R submitted that provisions of section 44AD of the I.T. Act has overriding effect over the provisions of section 28 to 43C of the Act. Further, as per section 44AD(4), the provisions of Chapter XVII-C, which is relating to advance tax are not applicable when income is declared under section 44AD of the Act. Thus, the Legislature has made specific exclusion in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 131 of the Act when the assessee has already admitted that he was not maintaining books of accounts and the returns were filed under section 44AD of the IT Act. It was only pressure tactics of the department that after completion of search they issued notice under section 131 and recorded the statement by pressure for obtaining more surrender. Therefore, the surrender was made under pressure, threat and coercion on the papers which are related to the turnover of the assessee declared under section 44AD of the Income Tax Act, 1961. None of the entries found in the seized documents are outside the scope of section 44AD of the Income Tax Act, 1961. The case laws given by the ld. D/R are not applicable under the facts of the case of the assessee as no assets or valuable was found during the course of search. The entries found are business transactions which are covered under section 44AD of the Income Tax Act, 1961. The ld. CIT (A) has given categorical findings in this regard on page 25 para 10, page 32 para 12 and page 35 para 15 which are very specific and in detail. The ld. Counsel for the assessee submitted that the appeal of the revenue be dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er regular provision and not under presumptive scheme. If what is found is only relating to payments made which has nexus with the business of civil construction carried on and not in respect of any other activity, the payment will be merging into calculation of presumptive scheme and no separate addition can be made while framing assessment u/s 153A. For this ground the appellant has not been able to establish factually the presence of cash of ₹ 6,47,500/-. In my opinion this cash is part of the turnover which is not disclosed by the appellant. Accordingly the AO shall tax it at the rate of 8.04% in terms of section 44AD (8.04% declared by appellant). The AO is thus directed to make an addition of ₹ 52,059/-. Ground No. 2 is allowed as indicated. The ld. CIT(A) has granted relief to the assessee by holding that the assessee had disclosed income u/s 44AD of the Act. In the statement recorded u/s 132(4) of the Act, the assessee has stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of accounts. The ld. CIR(A) has further held that in the general analysis, if as per evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking addition of the payment of interest on the ground that it was not verifiable. Obviously, the appellant was not in a position to get the payment of interest verified with reference to books of accounts as no books of accounts has been maintained. Hence the addition is hereby deleted. Appellant s Ground No. 3 is allowed. The ld. CIT(A) has deleted the addition under consideration by holding that the statement recorded u/s 132(4) of the Act, the assessee has categorically stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of account. In view of this, the statement recorded u/s 132(4) would prevail over statement recorded u/s 131 of the Act. The assessee has further quoted various board circulars decrying surrender in confessional statement. The ld. CIT(A) has in agreement with the submission of the assessee that when income was declared u/s 44AD and so accepted by the Assessing Officer there was no case for making addition of the payment of interest on the ground that it was not verifiable. The assessee was not in a position to get the payment of interest verified with reference to books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s 44AD which did not require maintenance of books of accounts. In view of this the statement recorded u/s 132(4) would prevail over statement recorded u/s 131. I am in agreement with the submission of the appellant that when income was declared u/s 44AD and so accepted by the Assessing Officer there was no case for making addition of the cash payment which stood covered by the deemed expenditure of ₹ 51,86,680/-. Hence the addition is hereby deleted. Appellant s Ground No. 4 is allowed. The ld. CIT(A) has deleted the addition under consideration by holding that the Assessing Officer has made addition of ₹ 23,68,320/- on the basis of page no. 20 and 22 of exhibit 3 on the ground that the payment of ₹ 23,68,320/- is unexplained and not verifiable. The Assessing Officer has referred the statement of the appellant recorded u/s 131 on 16.07.2013 wherein assesse was made to accept the expenditure as unexplained as he was not in a position to get the same verified with reference to books of accounts as no books of accounts has been maintained. The ld. CIT(A) also held that the assessee has disclosed gross receipts of ₹ 56,40,320/- and on such gross r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the detailed submission of the appellant which are with cogent reasons, I am of the view any alternative but to delete the addition. Appellant s Ground No. 5 is allowed. The ld. CIT(A) has deleted the addition by holding that the Assessing Officer has made the addition of ₹ 1,39,14,000/- on the basis of page no. 11 of Annexure AS Exhibit 4 on the ground that the payment of ₹ 1,39,14,000/- is unexplained and not verifiable. The Assessing Officer has referred the statement of the assessee recorded u/s 131 on 16.07.2013 wherein assessee has accepted the expenditure as unexplained as he was not in a position to get the same verified with reference to books of accounts as no books of accounts has been maintained. The ld. CIT(A) has considered the reply of the assesse, wherein it has been stated that the above page itself discloses that it was an estimate of expected expenditure on construction at three sites. Further the assessee has submitted these construction work receipts stand disclosed in Assessment Year 2013-14 of ₹ 98,60,000/- and Assessment Year 2014-15 of ₹ 56,40,320/-. Considering the above facts and circumstances of the case as discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture of ₹ 51,86,680/-. Hence the addition is hereby deleted. Appellant s Ground No. 7 is allowed. The ld. CIT(A) has deleted the addition under consideration by holding that in the statement recorded u/s 132(4) of the Act, the assessee has categorically stated that he was not maintaining books of accounts as income was being disclosed u/s 44AD which did not require maintenance of books of accounts. In view of this the statement recorded u/s 132(4) would prevail over statement recorded u/s 131. The ld. CIT(A) also held that when income was declared u/s 44AD and so accepted by the Assessing Officer there was no case for making addition of the cash payment which stood covered by the deemed expenditure of ₹ 51,86,680/-. 5.6 Having gone through the records of the present case, we find that the ld. CIT (A) after considering the facts of the case as well as the submissions of the assessee has rightly concluded there was no case for making addition of the cash payment which stood covered by the deemed expenditure of ₹ 51,86,680/-. Therefore we find no justification or relevance to interfere or deviate from the order passed by the ld. CIT (Appeals). Therefore, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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