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TMI Blog2018 (8) TMI 1723X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. AR did not bring any tangible evidence to show that the profit of the assessee was less than 12%. The assessee has neither submitted the details of expenditure relatable to the additional gross contract receipts admitted by the assessee nor the advances received by the assessee as per bank account. The assessee has not declared the true and correct receipts and the income earned there from. Only after the case was selected for scrutiny and called for the details, the assessee had admitted the additional gross receipts of ₹ 50, 44, 750/- before the AO. Though the assessee stated that the Sum of ₹ 40. 00 lacs represent the advance but not established the same with any evidence. Therefore, we hold that the Ld. CIT(A) has rightly rejected the books of accounts and estimated the income fairly @12% and we do not find any reason to interfere with the order of the Ld. CIT(A). CIT(A) has not given an opportunity for rebuttal of the gross receipts and consequent estimation of income - Held that:- As during the appeal hearing, we have given an opportunity to the Ld. AR to place the relevant material to show that the turnover was less than the sum computed by the ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation with relevant evidences to show that the sum of ₹ 50, 44, 750/- was the business receipts and the assessee had incurred the expenditure relating to the additional receipts declared during the assessment proceedings. However, the assessee appeared before the AO on 27. 03. 2015 and filed a letter accepting the addition of ₹ 46, 41, 170/- (Rs. 50, 44, 750-Rs. 4, 03, 580) as undisclosed income. Accordingly the AO completed the assessment on total income of ₹ 54, 35, 450/-. . 3. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and agitated against the addition of ₹ 50, 44, 750/- instead of the profit on such amount u/s 44AD @8% which was offered by the assessee. The Ld. CIT(A) verified the contentions of the assessee and observed that the assessee had offered the additional income of ₹ 46, 41, 170/- voluntarily and there was no force or coercion from the AO. The Ld. CIT(A) verified the record and given a finding that the AO has concluded the hearing on 25. 03. 2015 as per the order sheet and after conclusion of the hearing, the assessee had filed the letter voluntarily admitting the income on 27. 03. 2015, thus the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity. With regard to receipts of ₹ 40, 00, 000/-, the same represented the customer advances which should not be included in the gross contract receipts, since the work was not completed. Thus, argued that the estimation of income on ₹ 40, 00, 000/- is arbitrary and unjustified. In respect of ₹ 50, 44, 750/-, miscellaneous receipts, requested for estimation of income @8%. The Ld. AR further argued that the Ld. CIT(A) is not right in rejecting the books of accounts, enhancement of receipts and estimation of income @12% which is very high. 5. On the other hand, the Ld. DR argued that as per the balance sheet, the assessee had received the sum of ₹ 40, 00, 000/- and as per the agreement, the sums are to be received from the customers on stage by stage completion of the work. Once the amounts are received from the customer, it is established that the assessee had completed the construction activity to the extent of money received from the customers. It is immaterial whether the amount is lying in the bank account or in the balance sheet as advance. The amount of advance received by the assessee depending on the stage of completion of the work. Similarly, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 8% of gross receipts of 50, 44, 750/-) income from contract business at ₹ 4, 89, 699F, income from consultancy profession at NH, and has shown gross total income of ₹ 893, 279/-, and after claiming deduction u/s. 80C of ₹ 99, 000/- declared total income of ₹ 7, 94, 279/-. An income and expenditure statement was also enclosed wherein the gross receipt was shown at ₹ 1. 20 crores and net income shown at ₹ 4189, 699/-. In regard to the gross receipts of ₹ 50, 44, 751/-, the AO called upon the assessee to furnish the name, address and other details with verifiable evidence. The assessee had furnished the breakup details for the impugned amount of ₹ 50, 44, 751/-, as being from Eshwar Prasad (Rs. 14, 71, 000/-), Vishnu Priya (Rs29, 00, 000/-), G. Prameeta (Rs. 5, 00, 000/-) Others (Rs. 1, 73, 751/-) and requested time to file their details and confirmation letters. On 23. 3. 2015, the assessee filed confirmation letter from Easwari Prasad Vishnu Priya, and also requested to make certain corrections in the details earlier filed. Subsequently on 25. 3. 2015, other confirmation letter from Lavanya was also filed. The AO on perusal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed principle of law that a retraction to an admission has to be made as and when the threat or coercion had ceased to exist. The fact that the assessee had not chosen. to file a retraction letter immediately, also suggest that there is no truth in these contentions and allegations, and that khese contentions and allegations are mere afterthought made to suit the asessee's convenience. The assessee has filed an affidavit dated 22. 8. 2015 only during the appeal hearing, after a lapse of five months and therefore the averments made in the affidavit cannot be as such believed without any corroborative evidence. Besides except averring that the AO was annoyed there was no averment as to the specific threat thrown at the assessee. Therefore, I do not find merit in the contention that the assessee had given the disclosure letter out of coercion arid threat. During the appeal hearing the Ld. A. R did not place any material to controvert the finding of the Ld. CIT(A). In the instant case the assessing officer has called for the explanation from the assessee and the hearing was completed on 25/03/2015 and the assessee filed admission letter on 27/03/2015 and there was no evidence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de payment for purchase of car from this 531 A/c No. 10012558333, and the depreciation of the car has been claimed in P L Account, and the asset declared in the Balance Sheet. The liability towards car loan with Axis Bank was shown in the audited balance sheet though the payment to the car loan was through SB A/c. No. 10012558333. It is also seen that the From 3CD report qualifies that 'sundry debtors are subject to confirmation. However, the audited balance sheet does not show any sundry debtors. Thus, it is apparently seen that the transaction in the two bank accounts also forms part of the audited balance sheet and hence the correctness of these financial statements is doubtful and not reliable. The assessee has not furnished any detail relating to expenditure incurred with regard to receipts declared u/s44AD, and it is not verifiable whether such expenditure are part of the expenditure debited in Income Expenditure statement. It is also seen that in the Income Expenditure statement, the assessee has shown merely gross receipts of ₹ 1. 2 crores, and has not declared work-in-progress / closing stock in relation to substantial purchases effected. It is improbable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the customers. The Ld. AR also argued the said receipts of ₹ 40, 00, 000/- were received on 28. 03. 2015 and it is unjust to hold the same as receipt includible in gross receipts since the assessee is following stage to stage completion of work. 6. 5. We have considered the submission of the Ld. AR and observed that the assessee has not declared the contract receipts correctly. The fact that the assessee has declared additional contract receipts only after taking up the case for scrutiny established that the assessee is suppressing the receipts and the books of accounts does not show true and correct financial transactions. Though the Ld. AR canvassed for excluding the receipts of ₹ 40, 00, 000/- as advances, perusal of construction agreement shows that the customers are required to make the payment on completion of work stage by stage basis. During the appeal hearing, the Ld. AR did not establish with any tangible evidence that the assessee has not completed the construction to the extent of the receipts received by the assessee. In the absence of any evidence to establish that the assessee had received advances from the customers are not directly relatable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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