THE DCIT, CIRCLE-3, SURAT vs. M/S. SHYAM CORPORATION, SURAT

ITA 571/AHD/2012Status: DisposedITAT Surat14 December 2018AY 2008-096 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Revenue's action of accepting the disclosure of Rs. 1 crore but rejecting its source as business receipts was improper. If the receipt is considered in the assessee's hands, it must be treated as business receipts, as there was no other business activity. The Tribunal confirmed the CIT(A)'s deletion of the addition.

What were the facts?

During a survey, the assessee firm's partner disclosed Rs. 1 crore as unaccounted business receipts from a housing project. The assessee claimed this would be offered as income in a future year when the project is completed, following the project completion method of accounting. The Assessing Officer (AO) added this amount to the income under Sections 68, 69, and 69C, stating the source was unexplained.

What were the issues?

Whether the unexplained business receipts disclosed during a survey, claimed to be from a housing project under construction, can be added to income in the current year when the source is not fully explained by the assessee, despite the assessee adopting the project completion method of accounting.

Which sections of the Income-tax Act were involved?

Section 68,Section 69,Section 69C,Section 133A,Section 131,Section 80IB(10),Section 14

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Income Tax Appellate Tribunal, “SURAT” BENCH, SURAT

Before: SHRI AMARJIT SINGH&

For Appellant: Ms. Anupama Singla, Sr.D.R
Hearing: 19/11/2018Pronounced: 14/12/2018

PER Ms. MADHUMITA ROY - JM:

The instant appeal filed by the revenue is against the order dated 23.11.2011 passed by the Commissioner of Income Tax (Appeals)-II, Surat arising out of the assessment order dated 22.11.2010 for the Assessment Year 2008-09 passed by the DCIT, Cir-3, Surat under section 143(3) of the Income Tax Act, 1961 (The Act) with the following grounds: “[1] On the facts and circumstances of the case and in law, the Ld CIT(A)-II, Surat has erred in deleting addition of Rs.1,00,00,000/- made under section 68, 69 and 69C of the I.T. Act, without appreciating the fact that assessee failed to offer an explanation regarding the source of Rs.1,00,00,000/- credited in its books of account as WIP, eventhough during the

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