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TMI Blog2023 (8) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... in cash against the sale of flats and never intended to be accounted for by the assessee in its books of account. Therefore, when the transactions of sale of flats have attained finality then it is obvious that all the amounts receipt by the assessee and recorded in the books of account of the assessee as advance from customers has to be set off and included in the turnover of the assessee. At the same time when the amounts received in cash against the same transaction of sale of flats which have not been recorded in the books of account of the assessee at the time of search and seizure operation and subsequently recorded in the books as advance from customers is nothing but an eye wash to supplement the explanation of the assessee regarding the cash receipts. We are unable to agree with the contention and submission of the assessee placed before the authorities below and at the same time we are inclined to agree with the findings recorded by the CIT(A) as noted above, while confirming the addition are correct but his findings towards change of charging section from 69A to 56 are not correct. Therefore we are inclined to hold that the addition made by the AO deserves to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by : None For the Revenue by: Shri Kanav Bali, Sr. DR ORDER PER C. M. GARG, J. M.: 1. These are the appeals filed by the assessee and the revenue against the order of the ld CIT(A)-1, New Delhi dated 17.02.2014 for AY 2011-12. Assessee appeal ITA 2592/Del/2014 for AY 2011-12 2. The grounds raised by the assessee reads as follows:- 1. On the facts and circumstances of case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the addition of Rs. 38,78,388/- as income from other sources. On the facts and circumstances of case and in law, the addition of Rs. 38,78,388/- made by the assessing officer is erroneous and CIT(A) should have deleted the same. 2. On the facts and circumstances of case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the addition of Rs. 1,50,49,000/- on protective basis. On the facts and circumstances of case and in law, the CIT(A) should not have upheld the addition of Rs. 1,50,49,000/- even on protective basis. On the facts and circumstances of case and in law, the addition of Rs. 1,50,49,000 upheld by CIT(A) on protective basis is erroneous and the same is liable to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate order we further note that the ld CIT(A) while adjudicating ground No. 5 of assessee noted the written submissions of the assessee in para 7.1 of first appellate order wherein, the assessee submitted that the amount is duly recorded in the books of account and it is not a case of the assessee has not offered any explanation. It was also contended by the assessee that when the nature and source of cash receipts are established from the seized material itself provision of section 69A of the Act cannot be applied for making any addition in the hands of the assessee. Placing reliance on the order of the ITAT Pune Bench in the case Dhanvarsha Builders Developers (P) Ltd Vs. DCIT (2006) 102 ITD 375 (Pune), it was contended that the concept of income is a legal concept and amount of real income has to be arrived at after considering various other aspect such as expenditure and year of taxability and even in case of undisclosed income detected as a result of search, accounting of profit has still to be made on the basis of method of accounting followed by the assessee. 9. The ld CIT(A) after considering the above written submissions and contentions of the assessee held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the transactions of sale of flats have attained finality then it is obvious that all the amounts receipt by the assessee and recorded in the books of account of the assessee as advance from customers has to be set off and included in the turnover of the assessee. At the same time when the amounts received in cash against the same transaction of sale of flats which have not been recorded in the books of account of the assessee at the time of search and seizure operation and subsequently recorded in the books as advance from customers is nothing but an eye wash to supplement the explanation of the assessee regarding the cash receipts. We are unable to agree with the contention and submission of the assessee placed before the authorities below and at the same time we are inclined to agree with the findings recorded by the ld CIT(A) as noted above, while confirming the addition are correct but his findings towards change of charging section from 69A to 56 are not correct. Therefore in view of foregoing we are inclined to hold that the addition made by the AO deserves to be confirmed in the hands of the assessee u/s 69A of the Act. Accordingly, ground No. 1 of the assessee is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers but when the transactions of sale of flats have attained finality but the intention of assessee was clear that he did not want include the same in turnover at the time of completion of transaction of sale of flats and therefore the Assessing Officer was right in treating the same as unexplained money u/s. 69A of the Act. Therefore the ld. CIT(A) was not correct in changing the charging section from 69A to 56 of the Act and addition is confirmed u/s. 69A of the Act. Accordingly, ground no. 2 of revenue is allowed. Ground no. 3 of Revenue. 13. The ld. Senior DR submitted that the Assessing Officer was right and justified in making addition in the hands of assessee by observing that the company has received the cash by issue of check on account of purchase bills. The ld. Senior DR drew our attention towards para 5.1 to 5.2 of first appellate order submitted that the Assessing Officer observed from receipt and payment account and also noted that no transaction on account of payment to BOMB Authority of Rs. 45 lakh, Noida Authority of Rs. 5 crore and Billing Commission of Rs. 12,50,000/- total of Rs. 5,57,500/- has not been recorded in the books of accounts of assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.08.2010 to 20.10.2010. The Assessing Officer reproduced the contents and receipt and payment account and thereafter observed that no transactions on payment of commission, BOMB Authority and Noida Authority is recorded in the books of accounts of assessee and he made addition u/s. 69C of the Act treating the same as unexplained expenditure. The ld. CIT(A) deleted the addition only by observing that the source of payment was bank account of appellant duly disclosed and also noted that these payments were utilised for taking back cash to be spent for other purposes which could not have been recorded as such. We are not in agreement with the findings recorded by the ld. CIT(A) without even looking into the books of accounts of assessee and relevant bank account from where the transactions were undertaken. The ld. CIT(A) has not considered a very relevant assertion of Assessing Officer that these transaction/expenditures were not recorded in the books of accounts of the assessee which clearly shows the intention behind this strategy of assessee. Therefore the findings recorded by the ld. CIT(A) has not legs to stand and therefore the same are set aside. However in our considered opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and utilisation thereon but assessee could not furnish any details as asked for. The ld. Senior DR drew our attention towards para 4 of assessment order and submitted that the assessee vide reply dated 21.03.2013 submitted list of fourteen parties and submitted copy of account purchase bill only but failed to produce freight bill and Dharm Kata Weigh bill and also failed to produce parties to prove the genuineness of purchase. 18. The ld. Senior DR submitted that the Assessing Officer conducted inquiry by way of issuing notice u/s. 131 of the Act, and through Income Tax Inspector and thereafter went into detail for all fourteen parties and recorded detailed findings against the assessee in para 4.4 to 4.6 of assessment order and rightly disallowed and reduced amount of Rs. 27,23,09,422/- from work in progress out of which Rs. 26,12,41,822/- was pertaining to the year under consideration i.e. FY 2010-11 relevant to AY 2011-12, treating the same as bogus purchases claimed by the assessee by enhancing work in progress he submitted that the ld. CIT(A) has granted relief to the assessee by recording cryptic findings in para 4.2 therefore the first appellate order may kindly be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 concerns have been opened at one span of time as all these accounts, bear the account numbers in almost chronological order, which confirm the operation of one mind to create entity for issue of bogus bills. f) All the accounts opened in Vijya Bank at one point of time and catering to Amrapali and Gardenia Group of Company, clearly proved that these are managed and operated by these group only to service their illegitimate purpose of enhancing the cost of construction. g) Further, the analysis of these accounts shows that a few persons operates more than one accounts as per the following details: i) Sh. Gopal Krishn, R/o: C-118, Panchsheel Enclave, Sahibabad, Loni Road, Delhi - 110032 a. M/s. Bansal Trading Co. b. M/s. SC. Trading Co. c. M/s. Guru Nanak Trading Co. ii) Sh. Gopal Gupta, R/o: 3/3-), Extension, 2nd Floor, Street No.6, Murti Wali Gali, Laxmi Nagar, Delhi-110092 a. M/s. Om Enterprises b. M/s. Paras Enterprises C. M/s. Jai Shree Trading Co. ill) Sh. Kishori Lal, R/o: D-78, LIG Flats, Lajpat Nagar, Sahibabad a. M/s. Shree Bankey Traders b. M/s. Tirupati International As none of these persons are existing on the given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in progress. After these findings the ld. CIT(A) concluded that he deem it fit to direct the Assessing Officer to make available or adverse material and to allow necessary opportunity to the appellant to explain/revert the evidence and this exercise may be undertaken during the assessment proceedings for AY 2012-13 and 2013-14 when the said expenditure embedded in the work in progress will be considered for computing the income of assessee as per project completion method and will be free to take action according to law. With these findings he set aside the action of the Assessing Officer excluding the impugned expenditure from the work in progress. 21. In our considered view, the bogus claim unearth and found during the course of search and seizure operation and post search enquiry and outcome of survey operation on the related parties which were found to be in the business of providing bogus purchases entries and with whom the assessee undertaken purchases and added the same to the work in progress. In our considered opinion the assessee is not deserve to be allowed to show an include bogus purchases and to add the same to work in progress with an intention to increase the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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