Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, BANGALORE BENCHES “A” BENCH: BANGALORE
Before: SHRI JASON P BOAZ & SHRI PAVAN KUMAR GADALE
ORDER
PER PAVAN KUMAR GADALE, JM.
The assessee has filed an appeal against the order of the CIT (A), Mysore, dated 12/11/2013 passed u/s 143(3) and section 250 of the Act for the assessment year 2010-11. The assessee has raised the following grounds of appeal:
“1. The impugned order u/s 143(3) dated 12/11/2013 passed by the authority below is opposed to the law and facts of the case. 2. On the facts and circumstances of the case, the Authorities below erred in treating Rs. 25,50,000/- as unexplained income.
On the facts and circumstances of the case, the Authority below erred in taxing the addition u/s 69A.
4. On the facts and circumstances of the case, the Authority below is not justified in not accepting income offered by appellant under section 44AD of the Act. 5. On the facts and circumstances of the case, the authority below erred in charging / levying interest under section 234B of the Act.”
Brief facts of the case are that the assesee is an individual and derives income from salary and income from other sources, filed the Return of income declaring total income of Rs. 3,65,759/- on 31/07/2010. Subsequently, the case was selected for scrutiny and notice u/s 143(2) was issued. During the proceedings, the AO found that the assessee was drawing salary as a Director of the company, which is engaged in the business of civil contract under the name and style of Chirag Builders and Developers Pvt Ltd, and the assessee made certain cash deposits of Rs. 22.50 lakhs in State Bank of Mysore, Kankanady Branch and the same was not disclosed with the Revenue. The Assessing Officer found that the assessee has not disclosed these facts and during the course of assessment proceedings it was explained that out of the total deposits, Rs. 9 lakhs was his undisclosed contract receipts and the assessee has filed a statement of Revised income and offered income at 8% on the presumptive taxation under the provisions of section 44AD of the IT Act, 1961 and the balance of 16.50 lakhs was deposited and remitted on behalf of Mr. Babu Prakash. The Assessing Officer has verified the various details on record and having not satisfied with the submissions made by the assessee in respect of the cash deposits on the aspects of gifts and the letters filed. The Ld AO made addition of cash deposits as unexplained and assessed the total income of Rs. 29,23,712/- and passed the order u/s 143(3) of the Act on 16/11/2012.
3. Aggrieved, the assessee filed an appeal before the CIT (A), whereas CIT (A) having considered the findings of the AO, has confirmed the action of the Assessing Officer and dismissed the assessee’s appeal. Aggrieved by the order, the assessee is in appeal before the Tribunal.
Before us, Ld AR submitted that the assessee was in Real estate business and has not disclosed the contract receipts. Hence, filed the Revised statement of income declaring income of Rs. 72,000/- which is 8% on Rs. 9 lakhs under presumptive taxation and the Balance of Rs. 16.50 lakhs is in respect of transactions of Mr. Babu Prakash, whose deposits have been credited to the assessee’s account and remitted. The Ld AR further submitted that the assessee has helped Mr. Babu Prakash in respect of sale consideration which has been deposited in assessee’s Bank account and these facts were not filed before the lower authorities and prayed for allowing the assessee’s appeal.
Per contra, the Learned Departmental Representative supported the order of the CIT (A) and submitted that assessee has not furnished details in appellate proceedings and vehemently opposed the Ld AR submissions.
We have heard the rival submissions, perused the material available on record. In respect of the cash deposits made by the assessee, Ld AR has vehemently argued and submitted that the assessee is in Real estate business and offered income @ 8% of the contract receipts on presumptive tax basis. In respect of the balance of Rs. 16.50 lakhs, the Ld AR submitted that the assessee is ready to explain with the details and evidence to substantiate that the said amount does not belong to the assessee but relates to Mr. Babu Prakash. We have perused the order of the CIT (A) and found that the Ld CIT (A) has considered the observations of the AO but having not satisfied the submissions of the assessee has confirmed the addition made by the AO. We are of the opinion that since the assessee has offered the income as per the provisions of section 44AD of the Act i.e., 8% of the contract receipts from the real estate business, the gross receipts of Rs. 9 Lakhs are to be presumed from Real estate business. Considering the fact, we are of the substantive opinion that the income offered by the assessee @ 8% be accepted by the Assessing Officer. Whereas in respect of Balance of Rs. 16.50 lakhs, the assessee is ready to explain with evidences and details that it does not belong to the assessee and one more opportunity is provided before the Assessing Officer. Therefore, to meet the ends of justice, we restore this disputed issue, for a limited purpose to the file of the AO for verification and examination of the facts and evidences and further the assessee shall be provided with opportunity of hearing and should cooperate in submitting the necessary details as required by the AO for early disposal of the case. Thus, the grounds of appeal of the assessee are partly allowed for statistical purposes.
In the result, assessee’s appeal is partly allowed for statistical purposes.