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TMI Blog2019 (12) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... imation of profit at 8% is sufficient to meet the ends of justice. Accordingly, the estimation is scaled down to 8%. Thus, this ground of appeal raised by the assessee is partly allowed. Unexplained investment in purchase of property - HELD THAT:- assessee has pointed out from the paper book at page No. 17 wherein the advance site at BS Layout 305 sq.yds. for an amount of ₹ 56.70 lakhs clearly mentioned in the balance sheet. Keeping in view of the disclosure made by the partner Sri Kotagri Suryanarayana Murthy, in our opinion the addition cannot be survived. Accordingly, the addition made by the Assessing Officer and confirmed by the ld. CIT(A) is deleted. Thus, this ground of appeal raised by the assessee is allowed. Addition u/sec. 40A(3) as the payment or aggregate payments were made to a person in a single day in cash - HELD THAT:- The case of the assessee is that once income of the assessee is estimated, no separate addition can be made on account of expenditure incurred by the assessee. It is further submitted that the alleged cash payments were made towards various works like brick centering, mason, concrete and transportation charges against representing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red, therefore same are dismissed. Ground No.2 is not pressed by the assessee s counsel, therefore same is dismissed as not pressed. Ground No.6 is consequential in nature and not pressed, therefore same is dismissed as not pressed. The only grounds for adjudication before us are as follows:- 3. a) The ld. CIT(A) is not justified in sustaining the addition of ₹ 76,20,000/- towards on money received on sale of flats. ₹ 23,54,580/- b) Without prejudice to the above, the ld.CIT(A) ought to have directed the Assessing Officer to tax only the net profit in respect of the above receipts. 4. The ld. CIT(A) ought to have estimated profit @8% in respect of ₹ 3,22,560/- received from Sri M.K.S. Pratap. ₹ 7,974/- 5 a) The ld. CIT(A) is not justified in making addition of ₹ 56,70,000/- towards unexplained investment in purchase of property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant constructed an apartment by the name Jaya Residency consisting of 8 flats. During the course of appeal hearing, the appellant submitted a detailed chart containing the details of all the flats. As it can be verified from the chart, the appellant sold five flats during the relevant previous year for a sum of ₹ 98,94,000/- and these receipts were duly disclosed in the return of income filed by the appellant. Apart from the above, the customers paid a sum of ₹ 65,56,000 towards additional works. Two flats were sold to one Mr MKS Pratap. Out of these, one flat was sold during the financial year 2011-12 for a sum of ₹ 22,86,000 and one flat was sold during the financial year 2012-13 for a sum of ₹ 15,36,000, The assessing officer included the sale value of the 2nd flat also in the financial year 2012-13. Accordingly, the assessing officer considered the value of additional works in respect of the 2 flat amounting to ₹ 10,64,000 also for the financial year 2011-12, Thus, the assessing officer considered the total additional amount at₹ 76,20,000 (₹ 65,56,000+₹ 10,64,000) and proposed to consider, the some as on money in the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2019. I have carefully considered the facts of the case and submissions furnished by the Authorized Representative of the appellant. The appellant has not produced even an iota of evidence in support of their contention. The appellant has not filed the return of income originally within due date. The above income is shown only to set-off expenses against unaccounted receipts. The above claim is not backed by any evidences. No such evidences were found during the survey conducted nor produced during, the 'assessment proceedings'. n view of the above, the action of AO is justified the ground raised by the appellant is rejected . In view of the above, the explanation of appellant do not hold any ground and addition made by the AO is confirmed and the ground raised is rejected. 7. On being aggrieved, assessee carried the matter in appeal before this Tribunal. 8. Ld. counsel for the assessee has submitted that the Assessing Officer added the entire amount as addition, which was confirmed by the ld. CIT(A), but only profit has to be added. 9. On the other hand, ld.DR has submitted that assessee has not give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer noted that the contention of the assessee was verified with the return of income of Sri Kotagri Suryanarayana Murthy for the assessment year under consideration. On verification of the record, it is found that Sri Kotagri Suryanarayana Murthy has also not filed his return of income u/sec. 139(1) of the Act, however, he filed his return of income on 28/07/2017 only after issue of notice u/sec. 148 and after survey action on the firm wherein he is one of the partners. Further on verification of return of income, it is seen that Sri Kotagri Suryanarayana Murthy has shown gross receipts of ₹ 27,00,500/- and income disclosed u/sec. 44AD. Further on verification of balance sheet for the A.Y. 2011-12 relevant to the A.Y. 2012-13, it is seen that he has shown investment of ₹ 1,47,880/- in the said firm but not the amount of ₹ 56.70 lakhs. Further on verification of balance sheet of Sri Kotagri Suryanarayana Murthy, it is seen that he has neither any investment nor drawing from said firm. Moreover, on verification of balance sheet for the A.Y. 2013-14 of Sri Kotagri Suryanarayana Murthy it was found that he has invested an amount of ₹ 1,55,040/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) The findings of the ld. CIT(A) are ambiguous. 4. The ld. CIT(A) ought to have deleted the addition of ₹ 9,38,000/- made by the Assessing Officer u/sec. 69C of the Act towards unexplained expenditure. 17. In the assessment order, the Assessing Officer has noted that on verification of impounded material, the assessee has received on money for sale of flats to the tune of ₹ 25.28 lakhs. The assessee failed to substantiate the same, therefore entire amount of ₹ 25.28 lakhs was treated as undisclosed income of the assessee and added back to the income returned. 18. On appeal before the ld. CIT(A), the assessee has submitted as under:- The assessing officer inferred on the basis of information for A.Y.2014-15 that the expenditure to the extent of ₹ 9,38,000 is from unaccounted source and further held that the expenditure is in violation of S.40A(3) of the Act. The appellant submits that the income from business was admitted by the appellant u/s 44AD of the Act. The appellant did not maintain any books of account. Therefore, the assessing officer is not justified in in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 690C of the Act. ₹ 10,73,197/- 4. The ld. CIT(A) is not justified in sustaining the addition of ₹ 3,43,000/- towards undisclosed contract receipts ₹ 1,05,987/- 23. So far as unexplained investment is concerned, the Assessing Officer has noted that the assessee firm has paid to Mahesh or Govinda Rao, Yendada or Naidu, SKC or Saulesh, Madhurawada or Sivaji or Krishna or Appala Naidu or Anand who have received payments on behalf of their other team workers. It is pertinent to mention that on the above issue it is not only the cash payment more than ₹ 20,000/- in a single day to a single person but also it is the expenditure from unexplained source. On verification of annexure impounded it is seen that individual pages allotted to individual party, some payments were made by cash some payments were made by cheque also. The cheque payments were cross checked with the bank account maintained by firm and found that it has duly been debited in the bank account of the firm. From these facts, the note books, di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have received the payment on behalf of the entire team of the workers. Thus, the assessee contended that payments cannot be treated as paid to a single person. We find that the assessee has not given any proper explanation in respect of source of expenditure to the tune of ₹ 34.73 lakhs before the Assessing Officer and even before the ld. CIT(A) also. Before us also no proper explanation is given. We find that Assessing Officer is justified in making the addition. Accordingly, this ground of appeal raised by the assessee is dismissed. 26. So far as ground No.4 relates to addition of ₹ 3,43,000/- on account of undisclosed contract receipts. The Assessing Officer has noted in the assessment order that assessee filed return of income on 15/04/2017 disclosing gross receipts of ₹ 4,63,50,000/- whereas information gathered u/sec. 133(6) of the Act, it was found that assessee has executed total contract of ₹ 4,66,93,000/-, thereby there is undisclosed income of ₹ 3,43,000/- (₹ 4,66,93,000 ₹ 4,63,50,000). The same discrepancy was apprised to the assessee vide this office show cause dated 02/11/2017, but failed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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