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TMI Blog2022 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is hereby directed to be deleted. In the result, the ground of appeal is allowed. Addition on account of non disclosure of work-in-progress in the Income Tax Return - HELD THAT:- Firstly, regarding receipts from professional activities and from agricultural income, CIT(A) has not accepted the same holding that no documentary evidence has been filed in support thereof which has now been contested by the assessee stating that the said receipts have been duly disclosed in the return of income and has been accepted by the AO. We agree with the contention of the assessee that where the nature and source of receipt has been duly accepted by the Revenue, there is no basis to deny the claim of the assessee as the source of investment in his real estate projects and the addition is hereby directed to be deleted. Receipts on account of unsecured loan from three persons - The claim of the assessee has been denied by the CIT(A) holding that these transactions are not reflected under the head unsecured loans in the balance sheet as on 31.03.2018. The claim of the assessee however has been that these unsecured loans were taken in personal capacity by the assessee and the amount ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the course of search was as per Board circular and due to some inadvertent mistake by the counsel during assessment proceedings it was overstated, which was clarified to the CIT(A) but the same has not been considered properly by the CIT(A). c). That there is a documentary evidence of the valuation made by the departmental valuer, mentioning the quantity of jewellery found during the course of search, which have been ignored by the Assessing Officer and CIT(A) and hence jewellery found being within the Board circular, no addition on account of excess jewellery was called for. 3. a) That the Ld. CIT(A) has erred in sustaining the addition of Rs. 32,35,000/-, out of addition of Rs. 42,95,573/- and Rs. 17,82,250/- on account of alleged nondisclosure of work-in-progress in the 'Income tax return' and which is against the facts and circumstances of the case as per para 4.8 of the order. b). That both the Assessing Officer and CIT(A) have failed to appreciate that complete evidences of the amount utilized for work in progress alongwith sources have been given during the course of assessment proceedings and before the Ld. CIT(A) and which have been ignored, witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the validity of the liability arising from the same business which was on account of purchase of construction material. It was submitted that seized documents has been believe to be correct and the liability reflected in the statement of affairs corresponded with the such sized document and hence the same needs to be accepted and the addition so sustained by the Ld. CIT(A) be deleted. 3.2. Per contra, the Ld. CIT/DR taken us through the findings of the Ld. CIT(A) and it was submitted that during the course of appellate proceedings, the assessee was asked to supply the copy of the bill and ledger account to show that the payment had been made in the subsequent financial year and also the source of the said payments. In reply, it was submitted that the payment are on account of bricks, cement, raita and bajri but it was not possible to give confirmation letter etc. As per the Ld. CIT(A) neither any bill has been filed nor the source of the payments has been explained to substantiate the claim that these were paid out of explained sources of the assessee during the next financial year and in view of the failure on the part of the assessee to substantiate its claim, it was subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground of appeal is allowed. 4. In Ground No. 3 the assessee has challenged the sustenance of addition of Rs. 32,35,000/- on account of non disclosure of work-in-progress in the Income Tax Return. 4.1 In this regard the Ld. AR submitted that the addition had been made by the AO on account of the source of investment in the proprietorship concern of Rs. 9,35,000/- remaining unexplained and in addition to this, amount of Rs. 23,00,000/- from the total amount of unsecured loans of Rs. 29,00,000/- remains unexplained/ unaccounted and he accordingly, treated the source of capital contribution as unexplained/ unaccounted. 4.2. In this regard, it was submitted that Rs. 9,35,000/- is on account of the income earned by the assessee during the year and the same has been duly declared in his Return of Income. The gross receipts from the legal profession being Rs. 8,39,600/- as per page 2 of the Paper Book out of which Rs. 4,19,800/- has been shown as profit and the agriculture income being Rs. 4,40,000/-. It was submitted that where the return of the income as filed by the assessee has been duly accepted by the Ld. AO as well as Ld. CIT-(A), there arises no iota of doubt as to tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ingot (Page 70-72), Rakesh Sachdeva Prop. Sunny Tex Fab (Page no. 73-78) Sh. Puneet Pal Singh (Page 86-89). Further, it is also submitted that the source of capital contribution and the loans received has never been doubted by the Ld. AO and CIT-(A). Therefore, the source for the investment in the M/s. M.P. Builders stands explained and hence, no additions are called for. 4.5. Per contra the Ld. CIT/DR taken us through the findings of the Ld. CIT(A) and submitted that the assessee during the appellate proceedings could not filed any documentary evidence regarding Rs. 9.35 lacs claimed as cash deposited from professional receipt and agriculture income and in the absence of the same, the said source was not found genuine and the amount of Rs. 9.35 lacs remained unexplained. Regarding loan of Rs. 10 lacs from Raja Ingots, Prop. Shiv Kr. Bajaj, Rs. 10 lacs from Rakesh Sachdeva, Prop. Sunny Tex Fab, and Rs. 3 lacs from Puneet Pal Singh, it was submitted that the same are not appearing in the balance sheet of M/s M.P. Builders Developers as on 31/03/2018. Hence, these amounts were rightly considered as unexplained, unaccounted investments in the hands of the assessee. It was accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17,400/- on account of alleged investment in jewellery. In this regard, it was submitted that the assessee is living in a joint family, wherein, he resides along with his parents, wife and 2 sons and the jewellery was received in inheritance as well as during the occasion of marriage and the jewellery as found during the course of search action is well within the limits as provided for in the CBDT Instruction No. 1916 dated 11.05.1994. The total limit of jewellery when applied in the case of the assessee comes out to be 1400 grams as per page 20 of the order of CIT(A). 5.1 It was submitted that the total weight of Gold Jewellery as found during the search action was 1315 gms as mentioned in the report of the Department Valuation Officer, the same has been duly mentioned in the documentary evidence of the valuation as made by the department valuer as per the copy of the Panchnama at page no 18-20 of the order of CIT(A). The copy of the Panchnama along with the valuation report of the Department Valuer Officer is submitted at page no. 52-68 of assessee s paper book. However, the Counsel of the assessee during the assessment proceedings has erroneously overstated the same and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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