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Facts
The assessee, engaged in real estate development, filed its return for AY 2018-19. During scrutiny, the Assessing Officer (AO) rejected the books of accounts due to incomplete and unsubstantiated expenditure details, estimated profit at 8%, and made additions. A further addition was made for receipts from Vinayak Developers, estimated at 20% profit, as the AO believed the income was not offered for tax in the current year.
Held
The Tribunal admitted additional evidence submitted by the assessee, noting its relevance to the correctness and completeness of the books of account. Consequently, the impugned order of the CIT(A) was set aside, and the matter was restored to the AO for fresh adjudication.
Key Issues
Whether the rejection of the assessee's books of account and estimation of income by the AO and CIT(A) were justified, and whether the additional evidence submitted by the assessee should be admitted.
Sections Cited
143(3), 142(1), 145(3)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 11.07.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
Ground 4 - The Id. CIT(A) has erred in sustaining the addition of Rs. 41,18,214, being arbitrary estimation of net profit @ 20% on receipts of Rs. 2,05,91,068 from Vinayak Developers, disregarding the fact that the said are already included in the appellant's gross business
S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 2 revenue for immediately preceding year i.e. AY: 2017 revenue for immediately preceding year i.e. AY: 2017 revenue for immediately preceding year i.e. AY: 2017 - 18 and thus the income corresponding to these r the income corresponding to these receipts are already offered for eceipts are already offered for tax in AY: 2017 tax in AY: 2017 - 18. Your appellant respectfully submits that the 18. Your appellant respectfully submits that the aforesaid arbitrary addition of Rs. 41,18,214 amounts to double aforesaid arbitrary addition of Rs. 41,18,214 amounts to double aforesaid arbitrary addition of Rs. 41,18,214 amounts to double taxation of same income and should therefore be deleted and in any taxation of same income and should therefore be deleted and in any taxation of same income and should therefore be deleted and in any case estimation itself can case estimation itself can be made only on some legally sustainable be made only on some legally sustainable basis. Ground 1 - The Id. CIT (A) has erred in dismissing both the grounds The Id. CIT (A) has erred in dismissing both the grounds The Id. CIT (A) has erred in dismissing both the grounds raised before him by the appellant without waiting for the ld. AO's raised before him by the appellant without waiting for the ld. AO's raised before him by the appellant without waiting for the ld. AO's remand report. This has denied an opportunity to the appellant to remand report. This has denied an opportunity to the appellant to remand report. This has denied an opportunity to the appellant to explain its case to the ld. AO during the remand proceedings. Your in its case to the ld. AO during the remand proceedings. Your in its case to the ld. AO during the remand proceedings. Your appellant respectfully submits that the assessment order may appellant respectfully submits that the assessment order may appellant respectfully submits that the assessment order may please be set aside for Denovo assessment by the ld. AO especially please be set aside for Denovo assessment by the ld. AO especially please be set aside for Denovo assessment by the ld. AO especially because the appellant was handicapped in responding to the AO's because the appellant was handicapped in responding to the AO's because the appellant was handicapped in responding to the AO's notices during assessment proceedings due to massive spread of tices during assessment proceedings due to massive spread of tices during assessment proceedings due to massive spread of Covid -
19. Ground 2 - The Id. CIT(A) has erred in sustaining the rejection of The Id. CIT(A) has erred in sustaining the rejection of The Id. CIT(A) has erred in sustaining the rejection of Books of Accounts observing that 'the books of accounts produced Books of Accounts observing that 'the books of accounts produced Books of Accounts observing that 'the books of accounts produced by the appellant before the AO were not complete an by the appellant before the AO were not complete and correct. Your d correct. Your appellant respectfully submits that the rejection of Books of appellant respectfully submits that the rejection of Books of appellant respectfully submits that the rejection of Books of Accounts is not justified since the books of accounts were not called Accounts is not justified since the books of accounts were not called Accounts is not justified since the books of accounts were not called for and examined either by the ld. AO OR the ld. for and examined either by the ld. AO OR the ld. CIT (A). Further, CIT (A). Further, the books of accounts are rejected for in the books of accounts are rejected for invalid and irrelevant valid and irrelevant considerations, without properly appreciating documents and considerations, without properly appreciating documents and considerations, without properly appreciating documents and explanation furnished during the course of assessment proceedings. explanation furnished during the course of assessment proceedings. explanation furnished during the course of assessment proceedings. Ground 3 - The Id. CIT(A) has erred in sustaining Net Profit rate @ The Id. CIT(A) has erred in sustaining Net Profit rate @ The Id. CIT(A) has erred in sustaining Net Profit rate @ 8% of the appellant's business revenue 8% of the appellant's business revenue overlooking the fact that the overlooking the fact that the percentage estimated by the ld. AO is entirely baseless, arbitrary percentage estimated by the ld. AO is entirely baseless, arbitrary percentage estimated by the ld. AO is entirely baseless, arbitrary and in complete disregard of the assessed Net Profit rate i.e. 3.83% and in complete disregard of the assessed Net Profit rate i.e. 3.83% and in complete disregard of the assessed Net Profit rate i.e. 3.83% in the appellant's own case for immediately preceding assessment in the appellant's own case for immediately preceding assessment in the appellant's own case for immediately preceding assessment year i.e. AY: 2017 year i.e. AY: 2017 -
18. Without prejudice to the other grounds, your Without prejudice to the other grounds, your appellant respectfully submits that the Net Profit rate can be appellant respectfully submits that the Net Profit rate can be appellant respectfully submits that the Net Profit rate can be estimated only on some legally sustainable basis like the assessed estimated only on some legally sustainable basis like the assessed estimated only on some legally sustainable basis like the assessed Net Profit rate in the appellant's own case for immediately preceding Net Profit rate in the appellant's own case for immediately preceding Net Profit rate in the appellant's own case for immediately preceding assessment year. year. Ground 5 - Alternatively, directions may please be given to the ld. Alternatively, directions may please be given to the ld. Alternatively, directions may please be given to the ld. AO to exclude / reduce business income for AY: 2017 AO to exclude / reduce business income for AY: 2017 AO to exclude / reduce business income for AY: 2017 - 18 to the extent of Rs. 41,18,214 in the event this addition is sustained in extent of Rs. 41,18,214 in the event this addition is sustained in extent of Rs. 41,18,214 in the event this addition is sustained in the present appeal. appeal.
2. Briefly stated, facts of the Briefly stated, facts of the case are that the assessee is the assessee is engaged in the business of engaged in the business of real estate development engaged in the business of real estate development real estate development and and and S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 3 infrastructure construction. For the year under consideration, the infrastructure construction. For the year under consideration, the infrastructure construction. For the year under consideration, the assessee filed its return of income on 30.10.2018, declaring a total assessee filed its return of income on 30.10.2018, declaring a total assessee filed its return of income on 30.10.2018, declaring a total income of ₹22,19,770/ 22,19,770/-.
2.1 During the course of scrutiny assessment under section 143(3) g the course of scrutiny assessment under section 143(3) g the course of scrutiny assessment under section 143(3) of the Income-tax Act, 1961 (“the Act”), the Assessing Officer issued tax Act, 1961 (“the Act”), the Assessing Officer issued tax Act, 1961 (“the Act”), the Assessing Officer issued notices under section 142(1) dated 20.11.2020 and 10.12.2020, notices under section 142(1) dated 20.11.2020 and 10.12.2020, notices under section 142(1) dated 20.11.2020 and 10.12.2020, calling upon the assessee to furnish complete particulars relating to calling upon the assessee to furnish complete particulars relating calling upon the assessee to furnish complete particulars relating various expenditure heads various expenditure heads—such as purchases, rent, salary and such as purchases, rent, salary and wages, security charges, professional and consultancy fees, fees for wages, security charges, professional and consultancy fees, fees for wages, security charges, professional and consultancy fees, fees for technical services and design charges, work assessment expenses, technical services and design charges, work assessment expenses, technical services and design charges, work assessment expenses, guest-house expenditure, vehicle hire charges and labour house expenditure, vehicle hire charges and labour expenses. house expenditure, vehicle hire charges and labour The details sought included the names, PAN, postal addresses, The details sought included the names, PAN, postal addresses, The details sought included the names, PAN, postal addresses, contact numbers, and the nature and purpose of payments to the contact numbers, and the nature and purpose of payments to the contact numbers, and the nature and purpose of payments to the respective payees.
2.2 Although the assessee furnished ledger extracts in respect of Although the assessee furnished ledger extracts in respect of Although the assessee furnished ledger extracts in respect of some items of expenditure, the some items of expenditure, the remaining details were not provided. remaining details were not provided. Subsequent notices issued under section 142(1) on 12.01.2021 and Subsequent notices issued under section 142(1) on 12.01.2021 and Subsequent notices issued under section 142(1) on 12.01.2021 and 03.02.2021 met with similar incomplete compliance. 03.02.2021 met with similar incomplete compliance. 03.02.2021 met with similar incomplete compliance.
2.3 Upon examining the partial information filed, the Assessing Upon examining the partial information filed, the Assessing Upon examining the partial information filed, the Assessing Officer recorded the following deficie Officer recorded the following deficiencies: a) The assessee produced only ledger accounts of the expenses, a) The assessee produced only ledger accounts of the expenses, a) The assessee produced only ledger accounts of the expenses, which contained merely the names of the payees, without requisite which contained merely the names of the payees, without requisite which contained merely the names of the payees, without requisite supporting particulars. supporting particulars.
S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 4 b) No corroborative evidence of payments b) No corroborative evidence of payments—such as marking the such as marking the corresponding entries in the bank s corresponding entries in the bank statements and bank book tatements and bank book—was furnished. c) The assessee failed to produce the postal address, e-mail address, c) The assessee failed to produce the postal address, e c) The assessee failed to produce the postal address, e or telephone numbers of the payees. or telephone numbers of the payees. d) In respect of salary payments, PAN and address were furnished d) In respect of salary payments, PAN and address were furnished d) In respect of salary payments, PAN and address were furnished for only six employees out of a total of sixte for only six employees out of a total of sixteen, which the Assessing en, which the Assessing Officer found inexplicable. Officer found inexplicable. assessment expenses of ₹6,66,595/-, the ledger e) For work-assessment expenses of , the ledger disclosed that the entire amount had been paid in cash. disclosed that the entire amount had been paid in cash. disclosed that the entire amount had been paid in cash.
2.4 In view of the above shortcomings and the assessee’s repeated In view of the above shortcomings and the assessee’s repeated In view of the above shortcomings and the assessee’s repeated failure to substantiate failure to substantiate the genuineness and verifiability of the the genuineness and verifiability of the expenditure, the Assessing Officer rejected the books of account by expenditure, the Assessing Officer rejected the books of account by expenditure, the Assessing Officer rejected the books of account by invoking section 145(3) of the Act. He thereafter estimated the profit invoking section 145(3) of the Act. He thereafter estimated the profit invoking section 145(3) of the Act. He thereafter estimated the profit at 8% of the gross receipts of ₹9,91,87,059/-, determining the at 8% of the gross receipts of , determining the income at ₹79,34,965/ 9,34,965/-. After adjusting the net profit declared by . After adjusting the net profit declared by the assessee, an addition of ₹75,35,658/- was made. the assessee, an addition of was made.
2.5 Further, the Assessing Officer noted that the assessee had , the Assessing Officer noted that the assessee had , the Assessing Officer noted that the assessee had claimed credit of tax deducted at source in respect of receipts from claimed credit of tax deducted at source in respect of receipts from claimed credit of tax deducted at source in respect of receipts from M/s Vinayak Developers, amounting to opers, amounting to ₹2,05,91,058/ 2,05,91,058/-, but the corresponding turnover had not been offered to tax in the year corresponding turnover had not been offered to tax in the year corresponding turnover had not been offered to tax in the year under consideration. The assessee explained that the said income under consideration. The assessee explained that the said income under consideration. The assessee explained that the said income had already been accounted for in the preceding assessment year had already been accounted for in the preceding assessment year had already been accounted for in the preceding assessment year
S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 5 2017-18. The Assessi 18. The Assessing Officer, however, rejected this explanation ng Officer, however, rejected this explanation and proceeded to estimate profit at 20% on the said receipts, and proceeded to estimate profit at 20% on the said receipts, and proceeded to estimate profit at 20% on the said receipts, resulting in an addition of resulting in an addition of ₹41,18,214/-.
On further appeal, the assessee furnished certain additional On further appeal, the assessee furnished certain additional On further appeal, the assessee furnished certain additional details before the learned CIT(A) in details before the learned CIT(A) in support of the grounds raised. support of the grounds raised. However, after considering the assessment order, the material However, after considering the assessment order, the material However, after considering the assessment order, the material placed on record and the submissions advanced, the learned CIT(A) placed on record and the submissions advanced, the learned CIT(A) placed on record and the submissions advanced, the learned CIT(A) affirmed the action of the Assessing Officer. The relevant portion of affirmed the action of the Assessing Officer. The relevant portion of affirmed the action of the Assessing Officer. The relevant portion of the appellate findings on t the appellate findings on the issue of low net profit stands extracted he issue of low net profit stands extracted as under:
“6.1.8 I have carefully considered the assessment order, statement of 6.1.8 I have carefully considered the assessment order, statement of 6.1.8 I have carefully considered the assessment order, statement of facts, grounds of appeal and submissions furnished during the appellate facts, grounds of appeal and submissions furnished during the appellate facts, grounds of appeal and submissions furnished during the appellate proceedings. It is found that the AO was fully justified for proceedings. It is found that the AO was fully justified for estimating net estimating net profit @ 8%. Before the AO the Appellant submitted only ledger of profit @ 8%. Before the AO the Appellant submitted only ledger of profit @ 8%. Before the AO the Appellant submitted only ledger of expenses and could not furnished all the bills which were asked to expenses and could not furnished all the bills which were asked to expenses and could not furnished all the bills which were asked to produce by the AO. During the appellant proceedings also appellant could produce by the AO. During the appellant proceedings also appellant could produce by the AO. During the appellant proceedings also appellant could not produce any new evidence, such not produce any new evidence, such as complete bills/vouchers in as complete bills/vouchers in support of various expenses claimedby the Appellant. He only submitted support of various expenses claimedby the Appellant. He only submitted support of various expenses claimedby the Appellant. He only submitted same ledger/ bills which appellant furnished before AO. so I am also of same ledger/ bills which appellant furnished before AO. so I am also of same ledger/ bills which appellant furnished before AO. so I am also of the view that the books of accounts produced by appellant before AO the view that the books of accounts produced by appellant before AO the view that the books of accounts produced by appellant before AO were not compl were not complete and correct. Therefore, estimation of net profit is ete and correct. Therefore, estimation of net profit is justified. In view of above, the ground of appeal no justified. In view of above, the ground of appeal no-1 raised by the 1 raised by the appellant is dismissed. appellant is dismissed.” 3.1 Similarly, the addition relating to receipts from Vinayak Similarly, the addition relating to receipts from Vinayak Similarly, the addition relating to receipts from Vinayak Developers was also upheld. The learned CIT( Developers was also upheld. The learned CIT(A) recorded the A) recorded the following reasoning:
“6.2.2 Accordingly, vide show 6.2.2 Accordingly, vide show-cause notice dated 06/03/2021, Appellant cause notice dated 06/03/2021, Appellant was show- caused by the AO as to why the assessment should not be caused by the AO as to why the assessment should not be caused by the AO as to why the assessment should not be completed treating Rs. 2,05,91,068/ completed treating Rs. 2,05,91,068/- received from Vinayak Developers received from Vinayak Developers as undisclosed. Appellant stated in its reply that the receipt included in ed. Appellant stated in its reply that the receipt included in ed. Appellant stated in its reply that the receipt included in the A.Y. 2017- -18 and refund has been claimed in the A. Y. 2018 18 and refund has been claimed in the A. Y. 2018-19. Appellant furnished Invoice, ledger, and Profit & loss A/c. for A.Y. 2017 Appellant furnished Invoice, ledger, and Profit & loss A/c. for A.Y. 2017 Appellant furnished Invoice, ledger, and Profit & loss A/c. for A.Y. 2017-
S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 6 ITA No. 4588/MUM/2025
The reply of Appellant has duly been considered 18. The reply of Appellant has duly been considered but same was not but same was not acceptable because of following reasons: acceptable because of following reasons:- i) Appellant failed to justify why income is included in the A.Y. 2017 i) Appellant failed to justify why income is included in the A.Y. 2017 i) Appellant failed to justify why income is included in the A.Y. 2017-18 whereas TDS claimed in A. Y. 2018 whereas TDS claimed in A. Y. 2018-19. ii) In any financial transaction, there are two parties, one is payer and ii) In any financial transaction, there are two parties, one is payer and ii) In any financial transaction, there are two parties, one is payer and other is payee. First, payer gives the cash/cheque etc. after that, payee yee. First, payer gives the cash/cheque etc. after that, payee yee. First, payer gives the cash/cheque etc. after that, payee claimed receipt of the cash/cheque etc. But, in this case, situation is claimed receipt of the cash/cheque etc. But, in this case, situation is claimed receipt of the cash/cheque etc. But, in this case, situation is reverse. Here, first assessee claimed Page 6 of 9 AAOCS5345P reverse. Here, first assessee claimed Page 6 of 9 AAOCS5345P reverse. Here, first assessee claimed Page 6 of 9 AAOCS5345P- SN THAKKAR THAKKAR THAKKAR Α.Υ. Α.Υ. Α.Υ. INFRASTRUCTURE INFRASTRUCTURE INFRASTRUCTURE PRIVATE PRIVATE PRIVATE LIMITED LIMITED LIMITED 2018 2018-19 2018 ITBA/AST/S/143(3)/2021 /AST/S/143(3)/2021-22/1032228439(1) receipt but other party 22/1032228439(1) receipt but other party (Vinayak Developers) did not claim to give anything. Hence, contention of (Vinayak Developers) did not claim to give anything. Hence, contention of (Vinayak Developers) did not claim to give anything. Hence, contention of Appellant is not principally correct Appellant is not principally correct iii) In mercantile accounting policy, first payer debits his account being iii) In mercantile accounting policy, first payer debits his account being iii) In mercantile accounting policy, first payer debits his account being expense after that payee credit his account being income. In this case, fter that payee credit his account being income. In this case, fter that payee credit his account being income. In this case, first assessee claimed credited its account while Vinayak Developers did first assessee claimed credited its account while Vinayak Developers did first assessee claimed credited its account while Vinayak Developers did not debit its account. Hence, contention of Appellant is not correct as per not debit its account. Hence, contention of Appellant is not correct as per not debit its account. Hence, contention of Appellant is not correct as per accounting policy. accounting policy. iv) In the document submi iv) In the document submitted by the Appellant invoice assessee signed tted by the Appellant invoice assessee signed and affix its stamp for issuance of documents but Vinayak Developers and affix its stamp for issuance of documents but Vinayak Developers and affix its stamp for issuance of documents but Vinayak Developers did not sign and affix its stamp at the place given for certified and did not sign and affix its stamp at the place given for certified and did not sign and affix its stamp at the place given for certified and approved the contention of documents. Hence, Appellant failed to confir approved the contention of documents. Hence, Appellant failed to confir approved the contention of documents. Hence, Appellant failed to confirm that the transaction is for the Α. Υ. 2017 that the transaction is for the Α. Υ. 2017-18. v) Here, Appellant is a company, so it should be more cautious comparing v) Here, Appellant is a company, so it should be more cautious comparing v) Here, Appellant is a company, so it should be more cautious comparing to other entities during the accounting for the transaction. to other entities during the accounting for the transaction. vi) On perusal of document, so called invoice, it is revealed that W. O. vi) On perusal of document, so called invoice, it is revealed that W. O. vi) On perusal of document, so called invoice, it is revealed that W. O. Date (It is presumed that W. O. means work order) is 25/03/2017 and Date (It is presumed that W. O. means work order) is 25/03/2017 and Date (It is presumed that W. O. means work order) is 25/03/2017 and its value is Rs. 3,65,00,000/ its value is Rs. 3,65,00,000/-. From this information, it is very clear that . From this information, it is very clear that work order which is not signed by other party does not give any right to work order which is not signed by other party does not give any right to work order which is not signed by other party does not give any right to account for the amount in the A. Y. 20 account for the amount in the A. Y. 2017-18. It must be accounted for 18. It must be accounted for only after completion for work or after crediting to the assessee by other only after completion for work or after crediting to the assessee by other only after completion for work or after crediting to the assessee by other party in its books. party in its books. vii) On perusal of document, so called invoice, it is revealed that Bill vii) On perusal of document, so called invoice, it is revealed that Bill vii) On perusal of document, so called invoice, it is revealed that Bill period is 01/04/2017 to 25/04/2017 and bill date is 26/0 period is 01/04/2017 to 25/04/2017 and bill date is 26/0 period is 01/04/2017 to 25/04/2017 and bill date is 26/04/2017 which proves that transaction is purely related to A. Υ. 2018 which proves that transaction is purely related to A. Υ. 2018 which proves that transaction is purely related to A. Υ. 2018-19. viii) On perusal of document, so called invoice, it is also revealed that viii) On perusal of document, so called invoice, it is also revealed that viii) On perusal of document, so called invoice, it is also revealed that assessee mentioned TDS recoveries of Rs. 3,90,352/ assessee mentioned TDS recoveries of Rs. 3,90,352/- for Vinayak Developers. But, Vinayak Developers did not m Developers. But, Vinayak Developers did not made any TDS for A. Y. ade any TDS for A. Y. 2017-18. It clearly proves that Vinayak Developers never ever credited 18. It clearly proves that Vinayak Developers never ever credited 18. It clearly proves that Vinayak Developers never ever credited the amount for assessee for A. Y. 2017 the amount for assessee for A. Y. 2017-18 in its books. Hence, assessee 18 in its books. Hence, assessee cannot debit the amount for Vinayak Developers in its books. cannot debit the amount for Vinayak Developers in its books. cannot debit the amount for Vinayak Developers in its books. ix) Appellant furnished the Pr ix) Appellant furnished the Profit & Loss a/c for A. Y. 2017 ofit & Loss a/c for A. Y. 2017-18 with details of source of credit including the name Vinayak Developers is details of source of credit including the name Vinayak Developers is details of source of credit including the name Vinayak Developers is nothing but manipulation of the account to substantiate that the amount nothing but manipulation of the account to substantiate that the amount nothing but manipulation of the account to substantiate that the amount is received in the A. Y. 2017 is received in the A. Y. 2017-18. Actually, Appellant failed to disclose the 18. Actually, Appellant failed to disclose the S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 7 said amount in the A. Y. 2018 said amount in the A. Y. 2018-19 to avoid any tax liabilities. Hence, 19 to avoid any tax liabilities. Hence, Appellant included the amount received from Vinayak Developers in A. Y. Appellant included the amount received from Vinayak Developers in A. Y. Appellant included the amount received from Vinayak Developers in A. Y. 2017-18 by manipulating to avoid any tax liabilities in A. Y. 2018 18 by manipulating to avoid any tax liabilities in A. Y. 2018 18 by manipulating to avoid any tax liabilities in A. Y. 2018-19. x) From the above discussion, it is x) From the above discussion, it is evident that transaction was related to evident that transaction was related to A. Y. 2018-19 but Appellant did not account the same in the books during 19 but Appellant did not account the same in the books during 19 but Appellant did not account the same in the books during the year under consideration, after detection the discrepancy, assessee the year under consideration, after detection the discrepancy, assessee the year under consideration, after detection the discrepancy, assessee tried to show that said amount is incorporated in the A. Y. 2017 tried to show that said amount is incorporated in the A. Y. 2017 tried to show that said amount is incorporated in the A. Y. 2017-18. Further, assessee did not furnish any conclusive and reliable evidence in rther, assessee did not furnish any conclusive and reliable evidence in rther, assessee did not furnish any conclusive and reliable evidence in support of the the claim.”
The learned Counsel for the assessee has filed a Paper Book The learned Counsel for the assessee has filed a Paper Book The learned Counsel for the assessee has filed a Paper Book comprising pages 1 to 185. Along with the Paper Book, the assessee comprising pages 1 to 185. Along with the Paper Book, the assessee comprising pages 1 to 185. Along with the Paper Book, the assessee has also moved an application has also moved an application under Rule 29 of the Income under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, seeking admission of additional (Appellate Tribunal) Rules, 1963, seeking admission of additional (Appellate Tribunal) Rules, 1963, seeking admission of additional evidence. The additional evidence consists of party-wise details in evidence. The additional evidence consists of party evidence. The additional evidence consists of party respect of expenditure on purchases, guest respect of expenditure on purchases, guest-house rent, designer house rent, designer charges, consultancy charg charges, consultancy charges and professional fees. The assessee es and professional fees. The assessee explains that although ledger accounts of these expenses were explains that although ledger accounts of these expenses were explains that although ledger accounts of these expenses were furnished during the course of assessment, the Assessing Officer furnished during the course of assessment, the Assessing Officer furnished during the course of assessment, the Assessing Officer required further particulars which could not be produced at that required further particulars which could not be produced at that required further particulars which could not be produced at that stage. The relevant detai stage. The relevant details of additional evidence are reproduced as ls of additional evidence are reproduced as under:
“ (i) Purchase totaling Rs. 5,83,49,258 (i) Purchase totaling Rs. 5,83,49,258 (ii) Guest House Rent totalling Rs. 6,99,000 (ii) Guest House Rent totalling Rs. 6,99,000 (iii) Designer Charges totaling Rs. 3,00,000 (iii) Designer Charges totaling Rs. 3,00,000 (iv) Consultancy Charges totaling Rs. 3,18,500 (iv) Consultancy Charges totaling Rs. 3,18,500 (v) Professional Fees totali (v) Professional Fees totaling Rs. 77,805 5. Having Having Having heard heard heard the the the parties parties parties at at at length, length, length, and and and upon upon upon due due due consideration of the factual matrix, we are of the view that the consideration of the factual matrix, we are of the view that the consideration of the factual matrix, we are of the view that the S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 8 additional evidence sought to be adduced deserves to be admitted. additional evidence sought to be adduced deserves to be admitted. additional evidence sought to be adduced deserves to be admitted. The details now furnished The details now furnished—containing, inter alia, the names containing, inter alia, the names and addresses of the parties, their PANs, and supporting particulars— addresses of the parties, their PANs, and supporting particulars addresses of the parties, their PANs, and supporting particulars bear directly on the core issue in dispute, namely, the correctness bear directly on the core issue in dispute, namely, the correctness bear directly on the core issue in dispute, namely, the correctness and completeness of the books of account and the justification for and completeness of the books of account and the justification for and completeness of the books of account and the justification for rejection of the same under section 145(3) of the Act. These rejection of the same under section 145(3) of the A rejection of the same under section 145(3) of the A documents go to the root of the matter and have a material bearing documents go to the root of the matter and have a material bearing documents go to the root of the matter and have a material bearing on a fair adjudication of the controversy. on a fair adjudication of the controversy.
5.1 In our considered opinion, the interests of justice would be In our considered opinion, the interests of justice would be In our considered opinion, the interests of justice would be best served by admitting these documents as additional evidence, best served by admitting these documents as additional evidence, best served by admitting these documents as additional evidence, particularly as their absence had weighed significantly with the ularly as their absence had weighed significantly with the ularly as their absence had weighed significantly with the Assessing Officer in invoking section 145(3). We accordingly admit Assessing Officer in invoking section 145(3). We accordingly admit Assessing Officer in invoking section 145(3). We accordingly admit the additional evidence under Rule 29. the additional evidence under Rule 29.
5.2 Consequently, the impugned order of the learned CIT(A) is set Consequently, the impugned order of the learned CIT(A) is set Consequently, the impugned order of the learned CIT(A) is set aside, and the matter is aside, and the matter is restored to the file of the Assessing Officer restored to the file of the Assessing Officer for fresh adjudication after considering the additional evidence and for fresh adjudication after considering the additional evidence and for fresh adjudication after considering the additional evidence and after affording due opportunity to the assessee. The Assessing after affording due opportunity to the assessee. The Assessing after affording due opportunity to the assessee. The Assessing Officer shall examine the party Officer shall examine the party-wise details of expenditure and re wise details of expenditure and re- determine the issue of rejection of books of account and estimation he issue of rejection of books of account and estimation he issue of rejection of books of account and estimation of income strictly in accordance with law. of income strictly in accordance with law.
5.3 With regard to the addition relating to M/s Vinayak With regard to the addition relating to M/s Vinayak With regard to the addition relating to M/s Vinayak Developers, the Assessing Officer is directed to examine afresh the the Assessing Officer is directed to examine afresh the the Assessing Officer is directed to examine afresh the assessee’s contention that the i assessee’s contention that the income in question had already been ncome in question had already been S N Thakkar Infrastructure Pvt. Ltd. S N Thakkar 9 recognized in an earlier year, and thereafter to decide the matter in recognized in an earlier year, and thereafter to decide the matter in recognized in an earlier year, and thereafter to decide the matter in accordance with law, after conducting necessary verification and accordance with law, after conducting necessary verification and accordance with law, after conducting necessary verification and granting adequate opportunity to the assessee. granting adequate opportunity to the assessee.
5.4 In view of our decision to restore In view of our decision to restore the issues to the file of the the issues to the file of the Assessing Officer, the remaining grounds of appeal are rendered Assessing Officer, the remaining grounds of appeal are rendered Assessing Officer, the remaining grounds of appeal are rendered academic and do not require independent adjudication. academic and do not require independent adjudication. academic and do not require independent adjudication.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes. statistical purposes.