M/S SURYA HOMES,HZB vs. ITO WARD-2(2), HZB

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ITA 149/RAN/2018Status: DisposedITAT Ranchi03 March 20202 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal deleted the addition of Rs. 6,86,400, finding the assessee had discharged its onus by explaining the source of funds. It also held that a lump sum estimation of 5% for certain expenses was justified, rather than the higher disallowance made by the lower authorities.

What were the facts?

The assessee, a builder and developer, had Rs. 6,86,400 added to its income as outstanding from books of accounts. The assessee claimed this amount was received for extra furnishing work from specific individuals. The assessee also challenged additions regarding unexplained purchases and bank deposits, and a disallowance of expenses.

What were the issues?

Whether the addition for outstanding income from furnishing work was justified, and the appropriate disallowance for unexplained expenses.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, : RANCHI BENCH, RANCHI

Before: SHRI S.S.GODARA

Hearing: 03.03.2020Pronounced: 03.03.2020

Date of hearing 03.03.2020 Date of pronouncement 03.03.2020 O R D E R S. S. Godara(Oral): This assessee’s appeal for assessment year 2012-13 arises against the Commissioner of Income Tax (Appeals), Jharkhand dated 23.06.2016 passed in case no.08/HZB/2015-16 involving proceedings u/s 143(3) of the Income Tax Act, 1961 (in short ‘the Act’). Heard both the parties. Case file perused.

2.

The assessee’s first substantive grievance challenges correctness of both the lower authorities’ action adding Rs.6,86,400/- as alleged outstanding income shown books of accounts. This assessee admittedly is a builder and developer in real estate. Learned counsel’s only case is that the assessee’s stand from the day one during the course of scrutiny was that the above sum had come from Shri R. N. Yadav, Smt. Lata Devi and Dr. Aditi Lal to the tune of Rs.178000/-, Rs.399990/-, Rs.109400/-; respectively for extra internal furnishing work over and above the sale price disclosed. I find that this assessee has explained its case from the recipient parties’ end. I reject the Revenue’s argument therefore and hold that the assessee has satisfactorily discharged his onus qua the instant issue. The impugned addition of Rs.6,86,400/- stands deleted. M/s Surya Homes 3. Mr. Choudhury is fair enough in not pressing the assessee’s second and fourth substantive grievances challenging addition(s) of Rs.103100/- and Rs.202119/- regarding unexplained purchases and difference in bank account deposits; respectively.

4.

This leaves me that the third issue of disallowance of Rs.202119/- @20% of various expenses which had neither been satisfactorily explained by the assessee nor there is any justification from the lower authorities’ side such a higher disallowance in principle. I therefore hold that a lumpsum estimation of 5% qua this third issue would meet the ends of justice with a rider that the same shall not be treated as precedent in any other assessment year. Necessary computation including that of interest, if any, shall follow as per law.

5.

This assessee’s appeal is partly allowed in above terms.

Order is pronounced in the open court on 03.03.2020.

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