9911796707
TMI Blog2025 (1) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant @ 8% of gross contract receipts without properly appreciating the facts & circumstances of the case. 3. Because the Ld. CIT (A) has erred in confirming an addition on account of interest on FDR to the tune of Rs 87662/- without properly going through the merits of the case and without appreciating the fact that the same was already included in the total income of the appellant. 4. Because the Ld. CIT (A) has erred in confirming an addition on account of interest to the tune of Rs 73972/-received from JSPL without properly going through the merits of the case and without appreciating the fact that the same was already included in the total income of the appellant. 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the grounds are without prejudice to each other." 3. Brief facts of the case are that the assessee filed return of income on 31.10.2010 declaring income of Rs. 31,10,060/-. The return of income was processed by the Revenue u/s. 143(1) of the Act. Case of the assessee was selected by Revenue for framing scrutiny assessment u/s 143(2) read with Section 143(3). Statutory notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross receipts. Assessing Officer rejected the contentions of the assessee and brought to tax net profit @ 8% of the gross receipts, as the assessee failed to furnish the reasons for self made vouchers and justifications for making payments in cash. While estimating the profits of the assessee as above, the AO also made, inter-alia, additions of Rs. 73,972/- being interest earned by the assessee from JSPL by including the same separately as income under the head 'income from other sources' 4. Aggrieved, the assessee filed first appeal with the ld. CIT(Appeals). Learned CIT(Appeals) dismissed the appeal of the assessee with respect to chargeability of profit of 8% by rejecting the contentions of the assessee. There was one more addition, inter-alia, which was upheld by the ld. CIT(Appeals) with respect to addition of Rs. 73,972/- as interest income from JSPL as income from other sources. The assessee submitted that the same is included in the business income and has been taxed under the head profit and gain from business or profession. CIT(Appeals) observed that there is no double addition on account of interest income of Rs. 73,972/-, as the said income was shown as income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the assessee stated that the profit declared by the assessee during the year under consideration was to the tune of 7.32% while in the assessment year 2008-09, same was 3.07%. It was submitted that in view of higher profit being declared by the assessee, no addition should be sustained. 5.3 Learned Sr. DR, on the other hand, submitted that the books of accounts were not produced and the Assessing Officer has applied the provisions of section 44AD. The ld. Sr. DR submitted that the said profit rate of 8% should be sustained. Learned CIT(Appeals) has rightly confirmed the order of the Assessing Officer. 6. I have considered rival contentions and perused the material on record. I have observed that the assessee Shri Rakesh Kumar Bansal has filed return of income on 31.10.2010 declaring income of Rs. 31,10,060/-. The return of income was processed by Revenue u/s. 143(1) of the Act. Case of the assessee was selected by Revenue for framing scrutiny assessment u/s 143(2) read with Section 143(3). Statutory notices u/s. 143(2) and 142(1) were issued by the AO to the assessee during the course of assessment proceedings. I have observed that the assessee is a proprietor of M/s. Shakti C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t able to demonstrate even before ITAT that the vouchers/bills were not self made and same can be subjected to verification/enquiry. Thus, the findings of the authorities below remained uncontroverted by the assessee even before the ITAT. It is equally true that the authorities below never made any attempt to quantify and specify with precision as to what are self made vouchers which could not be subjected to verification and their magnitude/quantification. The authorities below have not pin pointed the said self made cash vouchers and their quantification/identification, which were not supported by evidences and which remained unverifiable. The assessee has stated that all these self made vouchers were duly receipted by the recipients. If the recipients were identifiable, then it was incumbent on the authorities below to have made enquiries with the recipients to unravel truth. The authorities below has dealt with the matter in a very casual manner, and such lack luster and casual approach can never be appreciated, more so the assessee has to face the ordeal dealing with lengthy and expensive litigation running into several years. In the instant case, the case of the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the said interest income is earned keeping in view the business requirement and business exigencies, rather than investing the surplus fund lying with the assessee with JSPL. This requires investigation of facts and the matter is remanded back to the file of Assessing Officer for limited verification as to whether said funds were invested with JSPL keeping in view commercial/business expediency rather than merely investing surplus fund, on which interest of Rs. 73,972/- was earned. After arriving at the conclusive finding as aforesaid, the Assessing Officer shall accordingly bring to tax the said income. If it is surplus fund, the same shall be taxed separately, while if it is earned from the funds deployed for commercial/business exigency, then the same be treated as business income. Onus is on the assessee to prove commercial expediency and or business requirement to invest funds with JSPL, on which interest income is earned. Accordingly, this matter is remanded back to the file of Assessing Officer to decide the same afresh after arriving at the findings as aforesaid. The AO shall also keep in view our decision in this order in sustaining only the disallowance of expend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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