THE DCIT, CENTRAL CIRCLE-2, VADODARA vs. THE RISE INFRA, VADODARA

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ITSSA 557/AHD/2019Status: DisposedITAT Ahmedabad10 July 2024AY 2014-158 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeal. The primary issue was whether the AO was justified in making additions based on the presumption of 'on-money' receipt without concrete evidence. The Tribunal agreed with the CIT(A)'s observation that the AO's presumption was not supported by evidence and that the AO failed to bring on record material to substantiate the receipt of 'on-money' for all units. The Tribunal noted the CIT(A)'s finding that even if a document indicated on-money for one unit, any extrapolation should be confined to the year surveyed, citing decisions of the jurisdictional High Court and ITAT that extrapolation for earlier years without evidence is unsustainable. The Tribunal also referred to the principle that only the profit element in 'on-money' receipt can be taxed, not the entire receipt. Since the addition based on extrapolation was not sustainable, no gross profit related to it could be considered. Therefore, the deletion of the addition of Rs. 2,43,39,000/- by the CIT(A) was upheld.

What were the facts?

The Revenue, represented by the DCIT, has appealed against the order of the CIT(A)-12, Ahmedabad, dated 28/09/2019, concerning the assessment order passed by the AO under section 153 r.w.s. 143(3) for Assessment Year 2014-15. The assessee, The Rise Infra, is a firm engaged in construction and development. During a search on Akshar Group of cases on 22/09/2015, documents pertaining to the assessee were seized. A survey was also conducted at the assessee's site office on the same date, where loose papers were impounded. Based on these, the AO concluded that the assessee accepted unaccounted cash of Rs. 3.99 lakhs per unit sold, leading to an addition of Rs. 2,43,39,000/- for AY 2014-15. The CIT(A) deleted this addition, prompting the Revenue's appeal.

What were the issues?

1. Whether the CIT(A) erred in admitting additional grounds without providing an opportunity to the AO under Rule 46A of the I.T. Rule, 1962, as argued by the Revenue. 2. Whether the CIT(A) erred in deleting the addition of Rs. 2,43,39,000/- without appreciating that documentary evidence regarding receipt of on-money was impounded from the assessee's business premises, as argued by the Revenue. 3. Whether the CIT(A) erred in deleting the addition of Rs. 2,43,39,000/- without appreciating that the assessee failed to substantiate the claim and genuineness of extra work claimed to be received in cash, as argued by the Revenue. The Revenue contended that the CIT(A) wrongly deleted the addition, as documentary evidence of on-money receipt was impounded and the assessee failed to substantiate its claims. The Revenue relied on the assessment order. The Assessee did not appear, but in the lower appellate proceedings, it argued that the AO erred in treating Rs. 3,99,000/- as unaccounted cash receipts for all units without evidence and challenged the AO's jurisdiction under section 153C due to absence of incriminating material.

Which sections of the Income-tax Act were involved?

Section 153,Section 143(3),Section 153C,Section 292C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD

Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTNAT MEMBER

Hearing: 04/07/2024Pronounced: 10/07/2024

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त ( अपील ) / The CIT(A)-12, Ahmedabad 5. �वभागीय ��त�न�ध , आयकर अपील�य अ�धकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड� फाईल /Guard file.

आदेशानुसार/ BY ORDER,

स�या�पत ��त //True Copy//

सहायक पंजीकार (Asstt. Registrar) आयकर अपील�य अ�धकरण, ITAT, Ahmedabad

1.

Date of dictation (word processed by Hon’ble AM in his laptop) : 05.1.2024 07.1.2024 2. Date on which the typed draft is placed before the : Dictating Member. 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating : Member for pronouncement. 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the : 10.7.24 Sr.P.S./P.S. 7. Date on which the file goes to the Bench Clerk. : 10.7.24 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar : for signature on the order. 10. Date of Despatch of the Order :

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