9911796707
TMI Blog2018 (5) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... e, a partnership firm in the business of civil construction, as builders as well as on contract basis, was issued notice u/s. 153C of the Act on 18.03.2011 on the basis of incriminating material found in search on 05.02.2009 at the business premises of a firm, M/s. Khanna Pahwa Associates, as well as at the residences of its' partners. The said firm, in property dealing, is a related concern in-as-much as its' two partners are fathers of two of the three partners of the assessee-firm. The returned income being nil, assessment was framed at Rs. 11 lacs, being Rs. 10 lacs added u/s. 69/69A on account of unexplained expenditure, and Rs. 1 lac estimated as income on contract work. In appeal, the ld. CIT(A) found that the aggregate expenditure for the relevant year, as per the documents found during search, found unrecorded in the books of account of the assessee-firm (recorded by Assessing Officer (AO) at pages 3 and 4 of the assessment order), is Rs. 9,92,211. The addition of the balance Rs. 7,789 was accordingly deleted. The addition of Rs. 1 lac as estimated income was, again, both ad hoc and without basis. The assessee securing part relief thus, is in second appeal against the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been deemed as income in view of it being unexplained as to its source. That is, the assessee has, in terms of the document found in search - which is to be regarded as true in terms of s. 292C of the Act, incurred the expenditure, paying for the same in cash, so that the availability of cash with it on the relevant date/s (of payment) is proved. The same clearly falls u/s. 69A, which reads as under: 'Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.' Alternatively, it could equally be said that the assessee has not been able to explain the sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract work implies that the assessee is entitled to an agreed amount, either in absolute terms or specified in percentage, over and above the cost incurred. A fixed price, irrespective of the cost incurred by the assessee, on the other hand, implies it to be a sale of construction. Rather, and this constitutes the second aspect of the matter, incurring a higher expenditure implies that the expenditure was incurred in the first instance by the assessee, which was subsequently reimbursed by Mr. Anil Seth. The assessee could not have suffered a loss, as signified by the expenditure incurred being higher than the receipt, if the expenditure was being incurred from the cash made available to the assessee by him. On the contrary, how does the assessee explain the source of the excess expenditure? The argument, instead of advancing, defeats the assessee's case. That apart, there are other infirmities in the argument. There is, firstly, nothing on record to show that the construction commenced during the relevant previous year, i.e., f.y. 2006-07. Rather, going by the fact that it gets completed or substantially so, in end June, 2008, it would, given the time it normally takes for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing was provided. We, therefore, subject to the verification by the A.O. in the matter, direct for the deletion of the addition to the extent of the said duplication, clearly specifying the same in his order, as well as of the addition qua cash payments made after March 31, 2007. The assessee shall provide the necessary details/calculation. We decide accordingly, and the assessee gets partly relief. ITA No. 400/Asr/2010 (A.Y. 2009-10) 5. A reading of the assessment order reveals that the addition has in fact not been made on account of unexplained expenditure, as inferred, or even qua unexplained cash, but for the excess unaccounted receipt (Rs. 12.15 lacs) over the unexplained expenditure (Rs. 6.06 lacs), as found on the basis of the seized material (PB pages 10-25). However, as the ld. AR would point out during hearing, the very same sheet that reflects the receipt of Rs. 12.15 lacs from Shri Anil Seth, drawn as on 25.06.2008, also states the expenditure incurred on that project, at Rs. 14.74 lacs, incurring thus a loss of Rs. 2.59 lacs. The A.O. could not read a document de hors its context, drawing an inference as favourable to him, contrary to what the document explicitly s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
