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TMI Blog2019 (7) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer and by the same Circle namely DCIT, Central Circle 4(1), Mumbai. Accordingly, we have no hesitation in directing the AO to delete the addition made in the sum of ₹ 8.70 Crores in the hands of the assessee. - Decided in favour of assessee. - ITA No.688/Mum/2018, CO No.71/Mum/2019 (Arising out of ITA No.688/Mum/2018) - - - Dated:- 10-7-2019 - Shri M. Balaganesh, AM And Shri Amarjit Singh, JM For the Assessee : Shri Rishabh Shah For the Revenue : Shri S. Yadagiri ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.688/Mum/2018 CO No.71/Mum/2019 for A.Y.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-52, Mumbai in appeal No.CIT(A)-52/IT-368/DCIT-4(1)/2016-17 dated 03/11/2017 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3)of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/12/2016 by the ld. Dy.Commissioner of Income Tax 4(1), Mumbai (hereinafter referred to as ld. AO). Since identical issues are involved in these appeals, they were heard together and are being disposed off by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated the entire gross sum of ₹ 8,70,00,000/- as undisclosed income of the assessee and added the same to the total income in the assessment. 3.2. Before the ld. CIT(A), the assessee argued that the ld. AO himself had quoted and relied upon the statement given by the assessee wherein assessee had confirmed that the page Nos. 36 to 64 of Annexure A1 i.e. seized papers relate to the payment made to the labourers and labour contractors. The assessee had also confirmed that he had received total amount of ₹ 8,70,00,000/- in cash as gross receipts for work done for Runwal Group and had passed on the same as labour payments for the contract work executed on behalf of Runwal Group. It was pleaded that this submission of the assessee was made in the form of a statement recorded during the course of search and it was accepted by the search team which is evident from the fact that no further questions were posted by the search team on the assessee. It was pleaded that once the same has been accepted as genuine by the search team, the ld. AO ought not to have taken a divergent stand and added the same to the income of the assessee treated the same as payments ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the last three years should be taken as a basis for permitting the addition in respect of this sum of ₹ 8.70 Crores and accordingly, adopted the rate of 16% as gross profit for the year under consideration and applied the sum of ₹ 8,70,00,000/- and made an addition of ₹ 1,39,20,000/- thereon. 4. Aggrieved, the assessee is in appeal before us. 5. We have heard rival submissions. The primary facts stated hereinabove remain undisputed and hence, the same are not reiterated herein for the sake of brevity. We find from the statement recorded on oath at the time of search, the assessee had clearly informed that he had received unaccounted contract receipts of ₹ 8.70 Crores. Further, in the course of search action, papers were also seized which showed that assessee had incurred unaccounted cash expenses while carrying out the contract work. The assessee in his statement submitted that the said unaccounted cash payments were to the tune of ₹ 8.70 Crores which were received in cash from Runwal Developers Ltd., by the assessee. Hence, the source for making cash payments is duly explained by the assessee at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 9,53,44,921/- which comprised of certified work of ₹ 3,06,43,683/- and proforma invoices raised of ₹ 63,16,291/-. The assessee further submitted before the ld. CIT(A) that against the proforma invoice raised, M/s. Runwal Developers Pvt. Ltd., had made unaccounted payments to him in cash. We find that the ld. DR vehemently argued that Runwal Developers had offered on-money received from customers by them for A.Y.2014-15 and 2015-16 for this specific Anthurium project and not for the labour payments made in cash and accordingly argued that offer made in the hands of the Runwal Developers Pvt. Ltd., has got nothing to do with the addition made in the sum of ₹ 8.70 Crores in the hands of the assessee. Per contra we find that the ld. AR placed on record the copy of the assessment order framed in the hands of M/s. Runwal Developers Pvt. Ltd., u/s.143(3) of the Act dated 30/12/2016 for the A.Y.2015-16 wherein after elaborate discussion with regard to the receipts and payments of Runwal Anthurium project together with statements recorded during the course of search thereon from various authorities, the ld. AO had dedicated specific paragraphs vide paras 8.1 to 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of ₹ 8.7 crores has not been accounted in the books of account of Shri Himmatbhai Senghani 8:3 During the course of assessment proceedings the assessee has been asked to explain whether any payment has been made to Shri Himmatbhai Senghani, Prop, of M/s. M.J. Construction and Senghani Associates in the F.Y. 2014-15 (search year) relevant to A.Y.2015-16. The representative of the assessee has submitted as under :- Shri. Himmatbhai Senghani - Runwal Developers Pvt. Ltd - Cash Payment Shri.. Himmatbhai Senghani is a Labour Contractor for the Runwal Group. He is executing his contracts under his Proprietorship Concern running under the name of M/s. M. J. Construction. In his respect, you have sought / asked for the following: Your goodself has alleged that has admitted to receiving a sum of ₹ 8.70 crores from Runwal Group for work done, the said payment being unaccounted and received in Cash. In this respect we have to submit as under: At the onset, we have to humbly submit that the Assessee Group is not aware of any such admission by the said Mr.Himmatbhai Patel. In case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the facts of the case. Shri Himmatbhai Senghani is working as a labour contractor with the Runwal Group. From the submission of the assesses it appears that the assesses wants to cross examine the witness i.e. Shri Himmatbhai Senghani as if he is not known to the assesses and is staying far off. The assesses is trying to shift its burden to prove the genuineness of its cash transaction. Reliance is placed on judgement of the Gujarat High Court reported in CIT Vs Chandra Vilas Hotel (1987) 164 ITR 102 (Guj). This onus has not been discharged by the assesses. 8.6 The year under consideration, an amount of ₹ 17,94,14,102/- (as mentioned in paras-6 above) has been added to the total income of the assessee. Therefore, the assessee had sufficient unaccounted cash balance in its hand to make such payment to Himmatbhai Senghani The assessee company had generated cash by receiving on money from the sale of its residential/commercial units. On the basis of explanation, offered by the assessee which is placed on record, telescoping benefit to the extent of ₹ 8.70,00,000/- is liable to be .given to the assessee and no separate addition is made on this accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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