2024 (5) TMI 745 - AT - Income Tax

Addition u/s 69 - Cash/credit deposit in the bank account - Assessment u/s 44AD - Additions as unaccounted income of the assessee - HELD THAT - Because of failure of assessee to serve the notice on M/s Krrish Buildtech alias M/s Brahma City Pvt. Ltd., or to produce the said Company Directors to give their confirmations, learned CIT(A) seems to have drawn an impression that the said entity had nothing to do with the business of the assessee. Learned CIT(A) has rested its findings heavily on the fact that amounts which were received for the alleged transactions of purchasing land on account of M/s Krrish Buildtech was returned within a period of 2 days to 15 days itself. CIT(A) also did not find any justification in the fact that if it was an advance given to assessee for arranging land for agriculturists then for what reasons interest of Rs. 50,00,000/- was paid by the assessee to said M/s Krrish Buildtech. Before us also, on behalf of assessee, no substantial evidence was produced to justify the transactions. The manner in which CIT(A) has discussed the receipt and payment by assessee and lack of certainty to whom the payments were actually returned. The non corroboration of claim of working as land aggregator with specific transactions taken up or abandoned on behalf of said builder M/s Krrish Buildtech, only justifies the conclusion of CIT(A) and same cannot be said to be based on mere suspicion. Admittedly assessee had sought assessment u/s 44AD with a claim of not maintaining any day to day record or regular books of account. That all the more required evidence of the alleged business activity as a land aggregator. Thus the findings of learned CIT(A) deserve no interference. Grounds raised have thus no substance. The appeal of the assessee is dismissed.

Issues Involved:
1. Assumption of jurisdiction in reopening the assessment u/s 143(3)/147.
2. Validity of the reassessment order due to non-issuance of notice u/s 143(2).
3. Addition of Rs. 49,64,940/- by AO and its enhancement to Rs. 1,20,00,000/- by CIT(A).
4. Charging of interest u/s 234A, 234B, and 234C of the Income Tax Act, 1961.

Summary:

1. Assumption of Jurisdiction in Reopening the Assessment u/s 143(3)/147:
The assessee challenged the reopening of the assessment and passing of the impugned order u/s 143(3) read with section 147 of the Income-tax Act, 1961. The primary contention was that the statutory conditions stipulated u/s 147 to 151 were not complied with. However, the tribunal upheld the reopening of the assessment, finding no merit in the assessee's contention.

2. Validity of the Reassessment Order Due to Non-Issuance of Notice u/s 143(2):
The assessee contended that the reassessment order was invalid as no notice u/s 143(2) was issued/served. The tribunal did not find this argument compelling enough to quash the reassessment order.

3. Addition of Rs. 49,64,940/- by AO and its Enhancement to Rs. 1,20,00,000/- by CIT(A):
The AO added Rs. 49,64,940/- to the total income of the assessee based on unexplained cash deposits. The CIT(A) enhanced this addition to Rs. 1,20,00,000/- due to discrepancies in the assessee's explanations and lack of evidence supporting the transactions with M/s Krrish Buildtech. The tribunal noted that the assessee failed to produce substantial evidence to justify the transactions and corroborate the claim of working as a land aggregator. The tribunal upheld the findings of the CIT(A), stating that the conclusions were not based on mere suspicion but on substantial discrepancies and lack of evidence.

4. Charging of Interest u/s 234A, 234B, and 234C:
The assessee also contested the charging of interest u/s 234A, 234B, and 234C. However, the tribunal did not find any grounds to reverse the action of the AO in this regard.

Conclusion:
The tribunal dismissed the appeal of the assessee, upholding the enhancement made by the CIT(A) and the original addition by the AO. The tribunal found that the assessee failed to provide substantial evidence to justify the transactions and corroborate the claim of working as a land aggregator. The appeal was dismissed, and the order pronounced in open court on 14.05.2024.

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