TMI Blog2021 (4) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, we remit the issue back to the file of the AO with a direction to ascertain the correct purchase value of the property and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee in the matter. The assessee is directed to substantiate his claim by way of documentary evidence. This ground is allowed for statistical purposes. Unexplained cash credit - HELD THAT:- On perusal of record and submissions of the assessee, the assessee could not satisfy the basic ingredients laid down in section 68 of the IT Act even though the revenue authorities provided sufficient opportunities to the assessee to substantiate his claim by way of documentary evidence as per the requirement of section 68 of the Act. Therefore, we are of the considered view that the CIT(A) has rightly decide the issue against the assessee and accordingly, we uphold the order of the CIT(A) and dismiss the ground raised by the assessee on this issue. Unexplained investments in form of pro-notes in the hands of the assessee in respect of the following pro-notes found and seized by the department at the time of search - HELD THAT:- The submission of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/H/2019 - - - Dated:- 26-4-2021 - Shri Satbeer Singh Godara, Judicial Member And Laxmi Prasad Sahu, Accountant Member For the Assessee : Shri P. Murali Mohana Rao For the Revenue : Shri YVST Sai ORDER PER L.P. SAHU, A.M.: This appeal filed by the assessee is directed against CIT(A) - 11, Hyderabad s order dated 29/03/2019 involving proceedings u/s 143(3) of the Income- Tax Act, 1961 ; in short the Act wherein the assessee has raised 13 grounds and its sub-grounds, the sum and substance of which are against the action of the CIT(A) in confirming the order of the AO. 2. Briefly the facts of the case are that the assessee, is an individual deriving income from house property and civil contract. A search and seizure operations u/s 132 of the Act were carried out in the residential premises of the assessee on 25/11/2010. The AO issued a notice u/s 142(1), in response to which, the assessee filed his return of income on 07/03/2012 declaring the income of ₹ 25,58,554/- and agricultural income of ₹ 3,00,000/-. The AO completed the assessment u/s 143(3) of the Act determining the assessed income of the assessee at ₹ 1,22,45,722/- by making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hydro Consortium, ITA No. 461/Hyd/2019. The ld. AR requested before us that 8% net profit rate may be applied on direct contract works and 3% on sub-contract works, respectively. 6.3 The ld. DR on the other hand relied on the orders of revenue authorities. 6.4 After considering the submissions of both the parties and perusing the material on record as well as the orders of the authorities below, we are of the view that since the books of account of the assessee are subject to audit u/s 44AB of the Act and bills vouchers were not available and before the AO the assessee confessed that he destroyed the bills/vouchers after incurring the expenditure. Considering the prayer of the ld. AR of the assessee in the interest of justice as well as looking into the facts of the case, we direct the AO to estimate the profit @ 8% on direct contract receipts and @ 3% on sub-contract works. Accordingly, ground raised by the assessee on this issue is partly allowed. This view should not be taken as precedent. 7. As regards ground No. 7 and its sub-grounds (a) to (c) regarding addition of long term capital gains of ₹ 6,86,651/-, the AO had made the addition of ₹ 6,86,651/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only. The grounds raised are disposed with the above directions and treated as partly allowed. 7.3 After considering the submissions of the both the parties and perusing the material on record as well as the orders of the revenue authorities, the contention of the assessee is that the purchase consideration of the property is at ₹ 1,49,00,000/- and the AO while making the assessment for AY 2008-09 has determined the total purchase of the property at ₹ 3.5 crores. Therefore, to meet the ends of justice, we remit the issue back to the file of the AO with a direction to ascertain the correct purchase value of the property and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee in the matter. The assessee is directed to substantiate his claim by way of documentary evidence. This ground is allowed for statistical purposes. 8. As regards ground No. 8 and its sub-grounds (a) to (e) regarding addition of ₹ 5,71,000/- as unexplained cash credit, the AO noticed that the assessee had claimed to have taken unsecured loan of ₹ 5,71,000/- from one Sri P. Gangadhar. Accordingly, the AO issued a show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Krishan Reddy 5,00,000 R. Gopal 2,00,000 A. Seshaiah 2,00,000 T. Janardhan Naidu 50,000 T. Gangaram 10,00,000 V. Jayachandra naidu 3,00,000 G. Manohar Reddy 5,00,000 C. Chandra Sekhar 5,00,000 Grand Total 33,76,000 When the AO asked the assessee about the source of such lendings, the assessee stated that the same were lent out of the HUF funds and returns were filed in the status of HUF for AY 2011-12. However, as the return of income in the status of HUF for AT 2011-12, was filed on 30/03/2012 i.e. after the date of search and assessee has also failed to explain the sources for the above lendings, the AO treated the said amount of ₹ 33,76,000/- as unexplained investment in the hands of the assessee. 9.1 Before the CIT(A), the assessee made elaborate submissions, which were extracted by the CIT(A) at pages 11 to 15 in his order. After conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een audited qualified CA u/s 44AB of the Act. We also perused the cash book and financial statements filed by the assessee and find that there is no negative balance is shown at any time. Therefore, we are of the view that it cannot be said that the source is not explained by the assessee and accordingly, we direct the AO to delete the addition of ₹ 23,50,000/- made in the hands of the assessee. 9.5 As regards the addition of ₹ 9,00,000/- towards unexplained investments in form of pro-notes in the hands of the assessee in respect of the following pro-notes found and seized by the department at the time of search: Page No. Date Lender Lendee Amount (Rs.) 75 10/07/2010 Not mentioned V. Jayachandra Naidu 3,00,000 77 30/08/2010 -do- G. Manohar Reddy 1,00,000 83 22/11/2010 -do- C. Chandra Sekhar 5,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ₹ 23,50,000/- . This ground is partly allowed. 11. As regards ground No. 11 and its sub-grounds (a) to (c) regarding addition of ₹ 50,680/- in respect of cash found during the search, the ld. AR of the assessee has not pressed this ground at the time of hearing, therefore, the same is dismissed as not pressed. 12. As regards ground No. 12 and its sub-grounds (a) (b) regarding the addition of ₹ 12,19,714/- towards unexplained investment in jewellery, during the course of search, the AO noticed that the assessee had gross weight of jewellery at 751.5 grams and net weight at 593.5 gms valued at ₹ 12,19,714/-. The assessee stated that the said jewellery belonged to his family members and was received on various occasions as gifts by his wife and other family members. Rejecting the submission of the assessee, the AO made the addition of ₹ 12,19,714/-. 12.1 The CIT(A) confirmed the said addition by holding that the assessee has not furnished any evidence to explain the source of jewellery found. 12.2 Considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. During the cour ..... 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