2023 (12) TMI 392 - AT - Income Tax

Unexplained advances from customers towards booking of plots - Addition u/s 68 - HELD THAT - As assessee has received advance towards booking of plot and received further sums in subsequent financial year as well. That apart, the whole money was refunded through banking channel via bank a/c of director of assessee-company. The evidences placed by assessee in terms of Rule 29 to demonstrate these factual aspects are taken as authentic evidences and relying upon the same and having considered the explanations made by Ld. AR, we are inclined to accept that the advance received by assessee is proved appropriately and, therefore, addition made by AO deserves to be deleted. Decided in favour of assessee.

Summary

Issues involved:
The issue involves the addition of Rs. 3,78,946/- on the count of unexplained advances from customers u/s 68 of the Income-tax Act, 1961.

Summary:

Facts and Background:
The assessee, a company engaged in construction and colonizing business, filed a return of income for the relevant assessment year declaring a total income of Rs. 62,57,220/-. The Assessing Officer (AO) made certain additions during the assessment u/s 143(3), including an addition of Rs. 52,40,362/- u/s 68 for unexplained advances received from customers towards booking of plots. The Commissioner of Income-Tax (Appeals) [CIT(A)] deleted a substantial part of the addition but upheld a small addition of Rs. 3,78,946/- received from a non-resident individual, Shri Praveen Kumar Sharma.

Additional Evidences:
The assessee filed additional evidences including booking letters, cancellation requests, and bank statements to support their case. The additional evidences were admitted and considered by the ITAT.

Arguments and Submissions:
The assessee's representative argued that the advance received from Shri Praveen Kumar Sharma and another party was genuine, supported by booking letters and payment details. The parties requested cancellation of the booking due to personal reasons, and the refunded amount was transferred through a bank account, incurring costs on remittance.

Decision:
After considering the submissions and evidences, the ITAT accepted that the advance received by the assessee was genuine and properly accounted for. The addition made by the AO was deleted, and the assessee's appeal was allowed.

Conclusion:
The ITAT ruled in favor of the assessee, allowing the appeal and deleting the addition of Rs. 3,78,946/- made by the lower authorities.

This summary provides a detailed overview of the legal judgment, highlighting the key issues, facts, arguments, and the final decision made by the ITAT.