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Facts
The assessee did not report contractual receipts of Rs. 22,71,874/-, leading the Assessing Officer to reject books of account and add Rs. 6,81,562/- as 30% profit. An additional amount of Rs. 6,27,795/- was added as unexplained investment under Section 69, which was confirmed by the CIT(A).
Held
The Tribunal directed the Assessing Officer to verify if the contractual receipts were already taxed by the partnership firm. For the unexplained investment, the AO was instructed to provide the assessee an opportunity to explain the source. The appeal was allowed for statistical purposes.
Key Issues
Whether the addition of 30% profit on contractual receipts was justified without verifying if the income was already taxed by a partnership firm. Whether the addition for unexplained investment under Section 69 was valid without providing the assessee an opportunity to explain the source.
Sections Cited
69, 245A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay Condoned The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, vide order dated 20.05.2023 relevant to the Assessment Year 2011-12. 2. The assessee has raised the following grounds of appeal:
1. That on facts, and in law, the learned CIT (appeal) NFAC Income Tax Department has grievously erred in confirming the addition of unexplained investment amounting of Rs. 6,27,795/- u/s 69 of the Act. Asst. Year : 2011-12 - 2– 2. That on facts, and in law, the learned NFAC and grievously erred in confirming the Of Rs AO has receipts and estimating 30% Income 6,81,562/- on receipts 3. Your appellant craves leave to add/alter or amend any of the grounds till the appeal is finally heard and decided. 3. The brief facts case are that during the course of assessment proceedings, it was noticed that assessee had received an amount of Rs. 22,71,874/- as contractual receipt on which TDS had deducted and assessee has not shown any such income in the return filed. The Assessing Officer, therefore, rejected the books of account u/s.245A and made the additions of Rs.6,81,562/- on account of profit @ 30% of the gross receipt. Further, an addition of Rs.6,27,795/- was made u/s. 69 of the Income Tax Act, 1961 on account of unexplained investment.
4. Aggrieved against the Assessment Order, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal of the assessee.
5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
6. We have carefully considered the rival submissions and perused the material on record. The assessee has submitted that the contractual receipts in question have already been offered to tax in the partnership firm. The jurisdictional Assessing Officer is, therefore, directed to verify the same. With respect to the addition relating to unexplained investment in fixed deposits, the Assessing Officer is directed to provide an opportunity to the assessee to explain the source thereof. Asst. Year : 2011-12 - 3– 7. In the result, the appeal of the assessee is allowed for statistical purposes.