9911796707
TMI Blog2023 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... e did not furnish details with evidence of expenditure incurred on earning "On Money" of Rs. 2,15,62,600/-. The expenditure incurred was already claimed as a cost in the books of accounts. 2. On the facts and circumstances of the case and in law, the C.I.T.(A) erred in deleting addition on account of "On Money" received of Rs. 2,15,62,600/- without appreciating that Shri Rajender Singh Avadsingh Sardar, partner of the assessee firm in his statement had admitted the receipt on money of Rs. 3.16 crores as unaccounted and additional income and that no expenses will be claimed against this unaccounted income which will be net profit for the year. 3. On the facts and circumstances of the case, whether the CIT(A) was correct in law in admitting additional evidence without appreciating that the assessee during the course of assessment proceedings having been afforded adequate opportunity of being heard did not furnish the details called for on the issue relating to unexplained cash credit, unexplained cash credit and disallowance u/s 40(a)(ia) of the Act. 4.Whether on the facts and circumstances of the case and in law, it was correct that the issue of examination of additional ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o addition of on-money are that a survey under section 133A was carried out on 11.01.2013 on the business premises of assessee. During the survey proceeding a diary was found and impounded as Annexure-A/5 which contains the entry of total consideration of sale value of the units along with on money received in cash against bookings. At the time of survey, statement of one of the partner of assessee firm, Rajendra Singh Awadhsingh Sardar was recorded on oath. During his statement, in reply to Question No.18, the partner of assessee admitted that in one of three projects Vachnamrut Residency, the assessee-firm has received cash from customer of Rs. 3.16 crores, which has not been accounted in regular books of account for financial year 2012-13 relevant to assessment year 2013-14 and made disclosure of Rs. 3.16 crores as additional unaccounted income and promise not to claim any expenditure against the declared income. Further in response to Question No.19, the partner enhanced the disclosure to Rs. 3.20 crores considering any other discrepancy. The partner also confirmed that statement was made after proper discussion with other partners, Smt. Hitachiben Jashubhai Patel and Chartered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed an amount of Rs. 1.003 crores only in its return of income and accordingly a difference of Rs. 2.156 crores was not offered to tax and added to the income of assessee. The assessee explained that there is no consistent basis of making addition. For assessment year 2010-11, the Assessing Officer made addition, on the basis of actual receipt in assessment year 2011-12, the Assessing Officer quantified such amount based on actual receipt of Rs. 3,57,000/- in the year and estimated the sale value (-) the recorded sale value is estimated by Assessing Officer on the basis of identification of higher and lower value of sale for assessment year 2012-13. The Assessing Officer adopted the basis by estimating sale value minus recorded sales. Again the basis of such identification of higher value and quantification is not more. For assessment year 2013-14, the estimation of sale value is made on the basis of statement relating to on-money received in respect of sale of all the units in the project irrespective of its booking or otherwise. Thus, the quantification of on-money has no consistent basis nor it has any co-relation with the document / diary impounded. The assessee explained that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither from the customers or to co-relate with the impounded material. The Assessing Officer has not made any such exercise. The assessee also relied on certain case law and Circular of Central Board of Direct Taxes (CBDT) No.286/2003 dated 10.03.2003. 7. On the disallowance of expenses under section 40(a)(ia), the assessee submitted that assessee furnished the requisite particulars vide assessees reply dated 28.03.2014. On cutting expenses, the assessee explained that no TDS was required to deduct as TDS as the payments were made to the transporter who are engaged in the business of plying, hiring or leasing of goods. On development charges of Rs. 5,75,685/-, the assessee stated that such charges represent gas connection charges from Gujarat Gas Company to obtain gas connection for the project "Saidham Residency Project" and assessee paid gas connection charges of Rs. 5,55,935/- and Rs. 19,750/- to purchase of electric water pump. On professional fees, the assessee stated that assessee has deducted TDS payment of Rs. 55,000/- paid to Shri Harnish Gajjar and particular thereof was furnished before Assessing Officer. The remaining balance of Rs. 40,000/- was paid to three different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of survey. Therefore, entire on-money was offered in its return of income filed for assessment year 2013-14. The Assessing Officer also contended that the case law relied by assessee being different set of fact. The assessee never retracted from its statement in writing. The project of assessee consists of four Penthouse, 56 flats and 40 shops. The aggregate cash accepted of Rs. 3.16 crores and this fact is also confirmed by the buyers' statements were recorded under section 131 on 11.01.2013. The Assessing Officer mentioned the details of cash part registered in the following manner: Unit Name of the Buyer Amount paid (Rs) Document amount as per statement and document Cash paid as per statement AA-601 Amarjeet R Rarachhiya 15,50,000/- 12,00,000 3,50,000 A-101 Pravinbhai M Tapiawala 13,50,000/- 10,00,000 3,50,000 10. On the disallowance under section 40(a)(ia), the Assessing Officer submitted that assessee was given show cause notice but the assessee failed to produce any document / explanation to finalization of assessment order. Now the assessee has submitted additional evidence though during the assessment proceedings, the assessee was given ample opportuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm Smt. Hitachiben Patel) 11,000 55 (refer page No.136 of the paper book) 17 S-3 5,00,000 4,50,000 50,000 56-58 18 S-5 5,00,000 4,00,000 1,00,000 59-61 19 S-6 5,00,000 (AO has wrongly taken the figure of Rs. 3.75 lakhs) 3,25,000 1,75,000 62-65 ii) In response to the rest of the units, the difference is quantified on the basis of actual receipts recorded in the diary (in these cases, the actual sale value is not noted) minus the sale value recorded in the books in respect of the following units: Sr No. Unit No. Actual sale price noted in the Diary Sales value recorded in books Difference (Rs) Ledger account 1 AA-303 13,00,000 12,00,000 1,00,000 66-69 2 AA-304 18,01,000 12,00,000 6,01,000 70-73 3 AA-404 14,35,000 12,34,000 2,01,000 74-77 4 AA-504 15,00,000 12,00,000 3,00,000 78-81 5 AA-701 16,51,000 12,51,000 4,00,000 82-85 6 AA-704 13,00,000 12,00,000 1,00,000 86-88 7 G-1 9,00,000 3,00,000 6,00,000 89 8 G-13 & G-14 17,52,000 (original booking cancelled) 8,00,000 (sold to Jashbhai Patel husband of partner Smt. Hitachben J Patel) 9,52,000 90 (refer page No.135 of the paper book) 12. On the basis of aforesaid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re made by the partner of assessee, Shri Rajendra Singh Awadhsingh Sardar. The assessee given detailed of unit-wise of working of on-money in their submission. The assessee offered on-money from assessment years 2010-11 to 2013-14 of Rs. 1.003 crores. However, subsequently the assessee offered this amount of Rs. 1.003 crores in its return of income for assessment year 2013-14 itself. The Assessing Officer while passing the assessment order made addition of Rs. 2.156 crores on account of on-money, being difference of disclosure and the income offered in the return of income. The assessee in its submission explained that in real estate project, the on-money price depends on various factors; like time of booking, terms of payment, relationship and commercial exigency. The assessee also claimed that there is various inconsistency in the statement of partner of assessee, Shri Rajendra Singh Awadhsingh Sardar that no uniform basis can be taken for on-money in all units. Against the remand proceeding of Assessing Officer, the assessee filed rejoinder dated 21.09.2019, wherein assessee has pointed out that assessing officer pointed out difference of Rs. 62,18,999/- in the remand report. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) held that during appellate stage the assessee filed detailed written submission, which was sent before Assessing Officer for his comments. No adverse inference against the contention of assessee was made by the Assessing Officer. The Assessing Officer found the same in order. Assessing Officer only objected against the admission of additional evidence. Such objection has already been rejected. The Ld. CIT(A) on considering the submission of assessee directed the Assessing Officer to delete the disallowance of cutting expenses, development charges and professional fees. 19. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. The revenue has not challenged. 20. We have heard the submission of Ld. Commissioner of Income-Tax-Departmental Representative (Ld. CIT-DR) for the Revenue and the Ld. Authorized Representative (AR) for the assessee. considered the rival submission of both the parties and have gone through the order of lower authorities. Ground No. 1 & 2 relates to deleting the addition of 'on money'. the ld Sr. DR for the revenue supported the order of assessing officer. The ld. Sr. DR submits that during the survey action, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Buildcon Pvt.Ltd. ITA No. 312/Ahd/2018 dated 27/04/2022 and DCIT Vs Safal Nirmal Pvt. Ltd. ITA No. 336 to 338 and 2244/Ahd/2018 dated 04/06/2021. 22. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that the Assessing Officer during the assessment made addition of Rs. 2.15 crores by taking a view that during the survey action, the assessee made disclosure of Rs. 3.16 crores as additional unaccounted income. Further to cover any other discrepancies, the partner of assessee enhanced the disclosure to Rs. 3.20 crores. However, the assessee has offered only Rs. 1.003 crore in return of income on account of undisclosed income. The Assessing Officer worked out the difference of Rs. 2.15 crores (Rs. 3.20 crores - 1.003 crore). As noted above, before the ld. CIT(A), the assessee filed detailed written submission. On the submission of assessee, the Assessing Officer was given opportunity to file his remand report. The Assessing Officer furnished his remand report. In rejoinder to the remand report, the assessee contended that the on-money cannot be independently subject to tax beyond the amount already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e result, ground No. 1 and 2 of appeal raised by the revenue is dismissed. 24. Ground No. 3 of the appeal relates to deleting the addition/disallowance under Section 40(a)(ia). The ld. Sr. DR for the revenue supported the order of Assessing Officer. The ld. Sr. DR submits that assessee has incurred various expenses and made the payment thereof without deducting tax at source. On show cause, the assessee failed to furnish the detail and substantiate as to why TDS was not made on payment of such expenses. The ld. CIT(A) accepted the explanation offered by assessee and deleted the disallowances. 25. On the other hand, the ld. AR of the assessee submits that during the assessment, the assessee furnished the reply dated 28/03/2014. The Assessing officer made disallowance without considering such reply, the assessee explained that no TDS was required to deduct as TDS as the payments were made to the transporter who are engaged in the business of plying, hiring or leasing of goods. On development charges of Rs. 5,75,685/-, the assessee stated that such charges represent gas connection charges from Gujarat Gas Company to obtain gas connection for the project "Saidham Residency Project" a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after considering the submission and the evidences filed before ld. CIT(A), the Assessing Officer should have no grievance to raise such plea, when all his objections and remand report was duly considered. 29. We have considered the submissions of both the parties and have gone through the orders of lower authorities carefully. As recorded above, on the written submission filed before the ld. CIT(A), the Assessing Officer was given full opportunity to submit his remand report. The Assessing Officer furnished his detailed remand report. Remand report of Assessing officer is referred and considered by the ld. CIT(A) while passing the order on merit. We find that ld. CIT(A) while referring the decision of Hon'ble Jurisdictional High Court in CIT Vs. Dharmdev Finance P Ltd. (supra) held that once remand report was obtained from the Assessing Officer by giving opportunity to both the parties, there is no violation of Rule 46. As we have also seen that the Assessing Officer was given full opportunity to counter the submission of assessee and to file his remand report, therefore, we do not find any violation of Rule 46 in admitting and considering the relevant fact and the evidence which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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