TMI Blog2022 (1) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... s remained to be examined by the ld. Assessing Officer. Therefore in our considered view this issue was rightly remitted to the Ld. Assessing Officer for examination so as to compute the correct income of the assessee. Assessee has purchased 51 residential plots on 12.09.2014 out of which six plots were sold during the year on which the assessee has claimed capital loss - Firstly the assessee has not furnished complete details of plots purchased, and secondly there was no information about the source of investment. Even AO has not raised any query about the details of plots purchased, purchase consideration paid, fair market value of the property/valuation as per stamp valuation authority, whether they are part of business transaction and most importantly source of investment to purchase these properties. The information called by the AO as well as the assessment order are silent on this issue. It is also noteworthy that in the computation of income assessee has shown income from house property, profit and gain of business, income from sale and profit of firm, income from capital gain and income from other source and after claiming the deduction u/s 80C of the Act total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of Civil Contractor. Income of ₹ 49,15,730/- declared in the e-return of income filed on 31.10.2015. Case selected for scrutiny through CASS due to reasons Receipt u/s 194C and 194J( As per 26AS) are more than the receipts shown in ITR5/5/6 . Notices u/s 143(2) 142(1) of the Act were served upon the assessee. It was admitted before Ld. AO that books of account are not maintained, statutory requirement of getting the books of account audited u/s 44AB of the Act not complied. As per the 26AS the contractual receipts stood at ₹ 6,96,81,297/- whereas the turnover declared by the assessee was ₹ 8,08,21,143/-. Assessee declared net profit @ 5% on the total turnover at ₹ 40,39,907/-. Ld. AO finalized the assessment estimating net profit @10% on the gross receipt shown by the assessee at ₹ 8,08,21,143/-. Income assessed at ₹ 8,08,2114/-. 3. Subsequently, Ld. Pr. CIT, Bhopal after examining the assessment records, invoked the provisions of section 263 of the Act and issued following show cause notice to the assessee (relevant extract is reproduced below): In this case, assessee filed return of income of the A.Y.2015-16 on 31.10.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s earned interest of ₹ 9,97,465/- on FDRs. The assessee has made FDRs for providing bank guarantee and as security deposit to the government departments for which contract work is undertaken. Thus the interest on FDs is in nature of business income. The assessee has shown income on percentage basis. The assessee has not claimed deduction for interest paid separately. Similarly income is also not shown separately. If interest income is considered separately then deduction of interest paid should be allowed from interest income. 2. The plots purchased are not for business purpose but are fixed assets of assessee. This is prove from the fact that the income from six plots sold has been shown under the head capital gain. 3. If the registration expenses and stamp duty are paid by seller then it will increase the capital loss. Thus there is no loss to the revenue in such a case. 5. Apart from the above referred submissions, no other supporting evidence were filed by the assessee before the Ld. Pr. CIT. After going through the assessment records, and the submissions made by the assessee before the lower authorities, Ld. Pr. CIT was of the view that the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction business @ 10% at ₹ 80,82,114/-. We further find that notice u/s 263 of the Act was issued by ld. Pr. CIT, Bhopal for the following two issues: 1. The assessee received interest from the Bank of India of ₹ 9,97,465/- and ₹ 45,970/- from shri Lokesh Narang. Tax deducted at source on such interest was duly claimed in the return of income. The assessee has not considered such interest income in the total turnover nor under the head income from other sources . The same should be added back to the total income. 2(a). The assessee had purchased 51 residential developed plots on 12.09.2014 from M/s Shri Atharva Devcon Pvt. Ltd. for ₹ 2,27,00,000/- and registration stamp duty expenses of ₹ 18,42,985/-. Furtehr the assesse paid ₹ 45,40,000/- in cash to the seller between 02.09.2014 to 31.03.2015. The assessee has not maintained any books of accounts regarding plots so purchased and sold. Since the assessee purchased the plots for business purposes, cash payment of ₹ 45,40,000/- to sellers is not allowable and required to added back u/s 40A(3). 2(b) Out of 51 residential plots purchased, the assessee sold 6 plots during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of capital gain is attached here with. The copy of registries of sale is also attached. The source of investment is ? 10.1 From the above reply it is loud and clear that firstly the assessee has not furnished complete details of plots purchased, and secondly there was no information about the source of investment. Even the Ld. Assessing Officer has not raised any query about the details of plots purchased, purchase consideration paid, fair market value of the property/valuation as per stamp valuation authority, whether they are part of business transaction and most importantly source of investment to purchase these properties. The information called by the ld. Assessing Officer as well as the assessment order are silent on this issue. It is also noteworthy that in the computation of income assessee has shown income from house property, profit and gain of business, income from sale and profit of firm, income from capital gain and income from other source and after claiming the deduction u/s 80C of the Act total income has been shown at ₹ 49,15,731/- whereas surprisingly on looking to the assessment order dated 30.12.2017 we find that the assessment has been completed o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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