9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 938 - AT - Income TaxUnexplained money u/s. 69A - deemed income - Receipts on account of booking of flats as income from undisclosed sources, by concluding that the percentage of completion method is not applicable and therefore, assessed the amount on receipt basis in the respective years, in which have been received - HELD THAT - Commissioner categorically held that section 69 is not applicable to the instant addition. In fact, the income from unaccounted/undisclosed business transactions is to be treated on different footings and taxed under the head income from other sources . Commissioner also held since the amount was not recorded in the books, it did not form the part of the Revenue Receipts of the Assessee. The amount was enjoyed by the Assessee on receipt basis and never recorded in the regular books of accounts, therefore, the amount has to be taxed on receipt basis and not on the basis of POC method. No reason and/or material to contradict the findings recorded by the ld. Commissioner in taking into consideration the peculiar facts and circumstances of the case and the relevant provisions of law as applicable to the issue in hand, hence we are inclined not to interfere in the decision of the Commissioner in holding the amount as taxable u/s. 56 of the Act under the head other sources . As we have already upheld the addition hence not dwelling into the controversy raised by the Ld. DR to the effects that the ld. commissioner wrongly held that provisions of section 69A of the Act are not applicable. Consequently, Ground No. 1 stands dismissed. Bogus purchases - AO on the basis of the statement made by the third party made this addition - HELD THAT - The statement of third party was not confronted to person who supplied cement and steel to the Assessee, therefore, adverse statement by third party could not be held against the Assessee. Commissioner further held that it is undisputed that the material was actually used as per the certificate of the Architect and the quantity of purchase and consumption of steel in the projects has not been found to be incorrect or assailed by the Revenue. In these circumstances, it cannot be held that the purchases were bogus or unexplained. Commissioner though deleted the addition under consideration, however, goes beyond by directing the Assessing Officer to make necessary reference to the Assessing Officer of the said two persons/proprietors. The ld. Commissioner directed that adverse inference can be drawn against the Assessee only, if it is established from this inquiry that the purchases were indeed bogus or the material so supplied was not actually consumed. Commissioner thoroughly examined the peculiar facts and circumstances of the case and not only deleted the addition in hand, but also directed the Assessing Officer for taking appropriate actions. Assessee before us did not appear inspite of sending notice, hence, failed to substantiate its ground of appeal and even otherwise, we do not find any reason and/or material to contradict the findings of the ld. Commissioner on the issue in hand. As the Assessee got substantive relief on merits, hence, adjudication of the ground under consideration would be academic exercise only. Accordingly, ground No. 2 also stands dismissed. Validity of assessment order passed by AO u/s. 143(3) read with section 153A is illegal and without jurisdiction and the ld. commissioner of Income-tax (Appeals) should have held so - HELD THAT -The Assessee failed to substantiate the present ground and even otherwise we do not find any infirmity in the decision of the Ld. Commissioner on the issue under consideration, hence Ground no. 3 stands dismissed. Disallowance being 50% of the commission paid as excessive - advance booking received during the year and the commission paid is very high at almost 10% which is against the normal industries norms of 2-3% of total sales - HELD THAT - Commissioner by thoroughly considering the assessment order and the aforesaid explanation made by the Assessee came to the conclusion that the calculation of the figure of advance from customer is factually wrong and cannot form the basis of any disallowance. Commissioner further held that this could have been clarified, if the issue had been brought to the notice of the Assessee by the AO. The Assessee was never informed of the adverse conclusion reached by the Revenue. The addition made is flawed and is deleted. In our considered view, the ld. Commissioner based his decision on peculiar facts and circumstances of the case and even otherwise we do not find any reason and/or material to contradict the findings of the ld. Commissioner in deleting the addition under consideration. Consequently, ground No. 4 raised by the Revenue Department stands dismissed. Disallowance on account of interest free advance given by the Assessee - HELD THAT -We observe that the ld. Commissioner by considering the peculiar facts and circumstances and the submissions made by the Assessee and the assessment order, came to the conclusion that the interest free advance given pertains to earlier years. The interest expenditure of the Assessee in this year relates to interest on bank loan for vehicle and other interest which have no direct nexus with the advances given earlier. Therefore, the addition made is unfounded and is deleted. Unexplained loan credit - HELD THAT - Commissioner by considering the peculiar facts and circumstances that the amount was not borrowed during the year under consideration, but only the repayment was made during the year, as the credit does not pertain to the previous year, no addition can be made in this year. The Assessee has discharged its primary onus of establishing the transaction. No defect is found in the evidences filed by the Assessee. As the confirmations had been filed, reference could have been made to the Assessing Officer of the creditor company for further verification. The addition appears to have been hurriedly made without proper application of law and procedure and cannot be sustained. We observe that the ld. Commissioner duly considered the peculiar facts and circumstances of the case and correctly adjudicated the facts pertaining to the addition under consideration.
Issues Involved:
1. Confirmation of addition as income from other sources. 2. Addition on account of alleged bogus purchases. 3. Legality and jurisdiction of assessment orders under section 153A. 4. Disallowance of commission and interest expenses. 5. Deletion of additions by the Commissioner of Income Tax (Appeals). Summary: Issue 1: Confirmation of Addition as Income from Other Sources - The Assessee declared an income of Rs. 57,53,553/- for the assessment year 2008-09. Post a search and seizure operation, the Assessing Officer (AO) made additions of Rs. 1,04,88,750/- as unexplained money under section 69A and Rs. 8,64,000/- for bogus purchase expenditure. - The Commissioner of Income Tax (Appeals) confirmed the additions but reclassified Rs. 1,04,88,750/- as taxable under section 56 as "income from other sources" instead of section 69A. - The Tribunal upheld the Commissioner's decision, agreeing that the amount should be taxed as "income from other sources" since it was not recorded in the regular books of accounts. Issue 2: Addition on Account of Alleged Bogus Purchases - The AO added Rs. 8,64,000/- as bogus purchases based on the unverified existence and transactions of M/s. Laxmi Enterprises. - The Commissioner deleted the addition, noting that the material was used as per the architect's certificate and the purchases were not found to be incorrect. - The Tribunal upheld the Commissioner's decision, agreeing that the purchases could not be deemed bogus without further inquiry. Issue 3: Legality and Jurisdiction of Assessment Orders under Section 153A - The Assessee argued that the assessment orders under section 153A were illegal and without jurisdiction. - The Commissioner dismissed these grounds, and the Tribunal found no infirmity in the Commissioner's decision, thus dismissing the Assessee's appeal on this issue. Issue 4: Disallowance of Commission and Interest Expenses - For the assessment year 2009-10, the AO disallowed Rs. 50,86,488/- as excessive commission expenses and Rs. 2,07,040/- for interest-free advances. - The Commissioner deleted these additions, noting factual errors in the AO's calculations and the lack of direct nexus between the interest expenditure and the advances. - The Tribunal upheld the Commissioner's decision, finding no reason to contradict the findings. Issue 5: Deletion of Additions by the Commissioner of Income Tax (Appeals) - The Revenue appealed against the deletion of various additions by the Commissioner, including Rs. 57,02,001/- for the assessment year 2009-10 and Rs. 22,21,86,248/- for the assessment year 2010-11. - The Tribunal dismissed the Revenue's appeals, agreeing with the Commissioner's thorough examination and factual determinations. Conclusion: All appeals filed by both the Assessee and the Revenue Department were dismissed. The Tribunal upheld the Commissioner's decisions on all issues, confirming the reclassification of certain additions as "income from other sources" and the deletion of others based on factual and legal grounds.
|
