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TMI Blog2023 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... owance u/s 40(a)(ia) - assessee has incurred various expenses and made the payment thereof without deducting tax at source - HELD THAT:- CIT(A) after considering the remand report of AO held that during appellate stage, the assessee filed detailed written submissions, which were sent to AO for his comment. No adverse comment is made against the submission of assessee, by AO as found the submission of assessee in order. AO only objected that the assessee furnished additional evidence. CIT(A) held that once the AO is given opportunity to examine the nature of expenses and no adverse comment is made, accordingly, directed the Assessing Officer to delete the disallowance of cutting expenses, development expenses and professional fees. In our view, the ld. CIT(A) has passed the order after giving due opportunity to the AO which we affirm. In the result, ground No. 3 raised by the revenue is also dismissed. Admission of additional evidences by CIT(A) - allegation of violation of Rule 46A of the Income Tax Rules, 1962 - HELD THAT:- AO was given full opportunity to submit his remand report. The Assessing Officer furnished his detailed remand report. Remand report of Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to unexplained cash credit, unexplained cash credit and disallowance u/s 40(a)(ia) of the Act. 4.Whether on the facts and circumstances of the case and in law, it was correct that the issue of examination of additional evidences produced before the Ld. CIT(A) of its admissibility is to be decided by Ld. CIT(A) through proper recording of the finding under Rule 46A of the Income Tax Rules, 1962 rather than no finding made but a simple statement . detail before the A.O during the remand proceedings, the additional evidences produced before the AO during the remand proceedings is being taken into cognizance as the condition laid down under Rule 46A of the IT Rules is fulfilled. 5.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has grossly erred while exercising the powers u/s 251 of the Income-tax Rules, 1962 that the appellant is not entitled to produce fresh evidences as a matter of right in appeal but subject to certain circumstances as mentioned in Rule 46A and principle of natural justice that nobody under the said rule be condemned without giving opportunity of being heard and while doing so an authority should not act whimsically whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19, the partner enhanced the disclosure to Rs. 3.20 crores considering any other discrepancy. The partner also confirmed that statement was made after proper discussion with other partners, Smt. Hitachiben Jashubhai Patel and Chartered Accountant Shri Girish N Shah. The partners of assessee also given the bifurcation of total units of Pent House, flats shops and on-money received against various type of units. The Assessing Officer further noted that in the computation of income, the assessee has shown only Rs. 1.003 crores as on-money and not offered the entire money as for disclosure. The Assessing Officer worked out the difference of Rs. 2,19,62,600/- (3,20,00,000/- - 2,15,62,600/-). The Assessing Officer on the basis of such discrepancies issued show caused notice to assessee, as to why the addition of difference amount be added. The Assessing Officer recorded that despite giving several opportunities, the assessee failed to give any explanation. Accordingly, the Assessing Officer made addition of Rs. 2,15,62,000/- 3. On further perusal of profit and loss account, the Assessing Officer noted that assessee has debited cutting of material expenses of Rs. 8,28,394/-, developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of sale of all the units in the project irrespective of its booking or otherwise. Thus, the quantification of on-money has no consistent basis nor it has any co-relation with the document / diary impounded. The assessee explained that statement of Rajendra Singh Sardar recorded at the time of survey have a lot of inconsistency and infirmities. As such he has quantified on money in respect of all units / flats in Saidham Residency Project irrespective that whether such flats / shops are booked or sold or not. It is common knowledge that no receipt, much less on-money can be assumed unless a unit is booked or sold. The quantification of on-money is much generalise without co-relating same with the writing in the seized diary containing in particulars of on-money received from large numbers of customers is very low as compared to what has been stated. 5. The assessee given details of on-money as per diary and as per the statement in the following manner:- Unit No. On-money as per diary (Rs) On-money as per statement (Rs) Flat A201 90,000/- 3,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003. 7. On the disallowance of expenses under section 40(a)(ia), the assessee submitted that assessee furnished the requisite particulars vide assessees reply dated 28.03.2014. On cutting expenses, the assessee explained that no TDS was required to deduct as TDS as the payments were made to the transporter who are engaged in the business of plying, hiring or leasing of goods. On development charges of Rs. 5,75,685/-, the assessee stated that such charges represent gas connection charges from Gujarat Gas Company to obtain gas connection for the project Saidham Residency Project and assessee paid gas connection charges of Rs. 5,55,935/- and Rs. 19,750/- to purchase of electric water pump. On professional fees, the assessee stated that assessee has deducted TDS payment of Rs. 55,000/- paid to Shri Harnish Gajjar and particular thereof was furnished before Assessing Officer. The remaining balance of Rs. 40,000/- was paid to three different parties and the amount paid was less than the threshold limits, the assessee was not required to deduct TDS from such payment. On the basis of such, assessee submits for deleting the disallowance under section 40(a)(ia). 8. On the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey. Therefore, entire on-money was offered in its return of income filed for assessment year 2013-14. The Assessing Officer also contended that the case law relied by assessee being different set of fact. The assessee never retracted from its statement in writing. The project of assessee consists of four Penthouse, 56 flats and 40 shops. The aggregate cash accepted of Rs. 3.16 crores and this fact is also confirmed by the buyers statements were recorded under section 131 on 11.01.2013. The Assessing Officer mentioned the details of cash part registered in the following manner: Unit Name of the Buyer Amount paid (Rs) Document amount as per statement and document Cash paid as per statement AA-601 Amarjeet R Rarachhiya 15,50,000/- 12,00,000 3,50,000 A-101 Pravinbhai M Tapiawala 13,50,000/- 10,00,000 3,50,000 10. On the disallowance under section 40(a)(ia), the Assessing Officer submitted that assessee was given show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,00,000 1,11,000 13-16 5 A-503 12,11,000 11,10,000 1,01,000 17-20 6 A-601 13,00,000 12,00,000 1,00,000 21-24 7 A-701 14,61,000 13,50,000 1,11,000 25-27 8 A-702 13,51,000 11,00,001 2,50,999 28-30 9 AA-104 18,62,000 12,11,000 6,51,000 31-33 10 AA-803 804 41,01,000 41,01,000 Nil 34-36 11 G-2 5,51,000 4,01,000 1,50,000 37-40 12 G-7 6,00,000 3,86,000 2,14,000 41-44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,00,000 1,00,000 86-88 7 G-1 9,00,000 3,00,000 6,00,000 89 8 G-13 G-14 17,52,000 (original booking cancelled) 8,00,000 (sold to Jashbhai Patel husband of partner Smt. Hitachben J Patel) 9,52,000 90 (refer page No.135 of the paper book) 12. On the basis of aforesaid details, the assessee stated that in both cases, the sale price is re-negotiated considering the balance amount of working to be done by customers, and the excess amount either agreed or received was refunding, which is evident from the ledger account. The refund amount was not doubted by the Assessing Officer and such assumption of Assessing Officer is factually incorrect. 13. The assessee in its without prejudiced submission, submitted that even if it is held that assessee has received on-money of Rs. 62.19 lakh, such amount cannot be independently subjected to tax beyond the amount already offered in its return of income. It is settled proposition that on-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y price depends on various factors; like time of booking, terms of payment, relationship and commercial exigency. The assessee also claimed that there is various inconsistency in the statement of partner of assessee, Shri Rajendra Singh Awadhsingh Sardar that no uniform basis can be taken for on-money in all units. Against the remand proceeding of Assessing Officer, the assessee filed rejoinder dated 21.09.2019, wherein assessee has pointed out that assessing officer pointed out difference of Rs. 62,18,999/- in the remand report. The assessee explained that in respect of units, difference is quantified on the basis of actual receipts recorded in diary minus the sale value recorded in the books in respect of certain units. It was further submitted that in certain cases, the actual sale price is renegotiated considering the balance amount of work to be done and the excess amount is refunded. To support such, submission, the assessee submits the ledger account of the parties. It was also contended that even if it is held that assessee has received on-money of Rs. 62.19 lakhs, such amount cannot be independently subject to tax beyond the of the assessee was considered by Ld. CIT(A) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appeal before the Tribunal. The revenue has not challenged. 20. We have heard the submission of Ld. Commissioner of Income-Tax-Departmental Representative (Ld. CIT-DR) for the Revenue and the Ld. Authorized Representative (AR) for the assessee. considered the rival submission of both the parties and have gone through the order of lower authorities. Ground No. 1 2 relates to deleting the addition of on money . the ld Sr. DR for the revenue supported the order of assessing officer. The ld. Sr. DR submits that during the survey action, the assessee made disclosure of Rs. 3.20 crores, however, while filing return of income, the assessee has offered only Rs. 1.00 crore on account of additional income in his return of income. The Assessing officer after detailed discussion, added Rs. 2.15 crores. The ld. CIT(A) allowed the plea of assessee that the assessee has offered more than 30% of income from the undisclosed income declared during the survey action. The case law relied by ld. CIT(A) in his order is based on different set of facts and cannot be applied on the facts of the present case. The ld. Sr. DR prayed for reversing the order of the ld. CIT(A) and to restore the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1.003 crore in return of income on account of undisclosed income. The Assessing Officer worked out the difference of Rs. 2.15 crores (Rs. 3.20 crores 1.003 crore). As noted above, before the ld. CIT(A), the assessee filed detailed written submission. On the submission of assessee, the Assessing Officer was given opportunity to file his remand report. The Assessing Officer furnished his remand report. In rejoinder to the remand report, the assessee contended that the on-money cannot be independently subject to tax beyond the amount already offered in the return of income and only percentage of profit on such on-money can be brought to tax. The assessee relied on the decision of Hon ble Gujarat High Court in Panna Corporation (supra) and decision of Tribunal in Kishore Telwala Vs ACIT and Abhishek Corporation (supra). We find that the ld. CIT(A) after considering the submission of assessee, held that the assessee offered on-money from A.Y. 2010-11 to 2013-14 of Rs. 1.003 crore. However, subsequently, the assessee offered amount of Rs. 1.003 crore in its return of income for A.Y. 2013-14 itself. On the basis of remand report, the assessee in its rejoinder dated 21/09/2019 has poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee submits that during the assessment, the assessee furnished the reply dated 28/03/2014. The Assessing officer made disallowance without considering such reply, the assessee explained that no TDS was required to deduct as TDS as the payments were made to the transporter who are engaged in the business of plying, hiring or leasing of goods. On development charges of Rs. 5,75,685/-, the assessee stated that such charges represent gas connection charges from Gujarat Gas Company to obtain gas connection for the project Saidham Residency Project and assessee paid gas connection charges of Rs. 5,55,935/- and Rs. 19,750/- to purchase of electric water pump. On professional fees, the assessee stated that assessee has deducted TDS payment of Rs. 55,000/- paid to Shri Harnish Gajjar and particular thereof was furnished before Assessing Officer. The remaining balance of Rs. 40,000/- was paid to three different parties and the amount paid was less than the threshold limits, the assessee was not required to deduct TDS from such payment. 26. We have considered the submissions of both the parties and gone through the orders of lower authorities carefully. We find that the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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