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Income Tax Appellate Tribunal, SMC “A” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV
Date of hearing : 28.06.2016 Date of Pronouncement : 26.08.2016 O R D E R This appeal is preferred by the assessee against the order of the CIT(Appeals) on a solitary ground that the CIT(Appeals) has erred in confirming the addition of Rs.4,18,000.
During the course of hearing, the assessee has also raised additional ground that since the burden is on the AO-respondent to prove that Rs.4,18,000 was received by the assessee and since the AO failed to establish/demonstrate the addition of Rs.4,18,000 as income of the assessee, the addition is unjustified. The assessee has already raised this ground in the main grounds of appeal and this is the solitary issue involved in this appeal. Therefore, I find no justification to admit the additional ground. I, however, adjudicate this contention of the assessee as a piece of argument.
The facts in brief borne out from the record are that the assessee company is a builder engaged in the construction of sale of apartments.
The assessee was subjected to survey action u/s. 133A(1) of the Act on 20.9.2005 and thereafter the case was selected for scrutiny. The Assessing Officer noted that during the previous year under consideration, the assessee company has sold certain flats in Project-14 and certain receipts from the sale of flats in such project have been offered as income vide Profit & Loss account enclosed with the return of income filed on 28.11.2003. The total quantum of receipts from Project-10 during the relevant assessment year 2003-04 is Rs.18,20,000. During the course of survey proceedings and subsequently, statements of the Managing Director, Shri T.D. Ramakrishna were recorded on oath on various dates.
Certain books of account and documents were also impounded from the assessee company at the time of survey. These include sale agreements and certain receipts. On examination of the same, it was noticed that there were differences between the amounts recorded in the sale agreements entered into with the prospective buyers and amounts recorded by the assessee in its books. The table below shows such amounts of difference:-
Sl. Name of the Purchaser Flat Agreement Accounted Difference No. No. Value Value (in Rs.) (in Rs.) (in Rs.) 1. Elizabeth 202 350000 265000 85000 2. B. Suresh 210 470000 362000 108000 3. Usha Chandran 102 350000 280000 70000 4. V. Ramaswamy 101 365000 285000 75000 5. KGK Nair G2 325000 250000 75000 Total 418000
During the course of recording of statement on oath, Shri Ramakrishna, M.D., has given evasive replies with regard to difference found as above. The AO has recorded the statement of the M.D. in his assessment order. Since the assessee could not explain the difference pointed out by the AO, the AO made the addition of the difference worked out as undisclosed income of the assessee.
The assessee preferred an appeal before the CIT(Appeals) with the contention that the AO has not afforded property opportunity of being heard to the assessee. The CIT(Appeals) re-examined the claim of the assessee in the light of assessee’s contention. He confirmed the addition on the ground that assessee could not explain the differences found in the agreements and the books of account. The relevant observations of the CIT(Appeals) is also extracted hereunder:-
“Having considered the case carefully and taking into account the fact that the AO states that appellant has not maintained books and relies on memory and also in view of the inability to confirm the transactions from the buyers, I find that I have no reason to interfere with the findings of the AO since the basic onus of proving the claim remains un-discharged by the appellant. I accordingly decide against the appellant and dismiss the grounds of appeal with the observation that the record shows that sufficient opportunity was given both at assessment and appellate stages and that action u/s. 147 was taken on correct grounds by the AO following the recovery of the sale agreements at the time of Survey action. I also find that the ground holding that presumption u/s. 132(4A) is not available does not hold water since the appellant himself has not been able to substantiate his claim before the undersigned inspite of being given sufficient opportunities, and the AO’s conclusion in the circumstances is reasonable.”
6. Now the assessee is before the Tribunal, but during the course of hearing, he could not furnish satisfactory explanation with regard to differences found in the books of account and the agreements found during the course of survey. Since the onus is upon the assessee to explain the differences and once he failed to do so, the addition deserves to be sustained. I therefore do not find any infirmity in the order of CIT(Appeals), who has rightly confirmed the addition.
In the result, the appeal of the assessee is dismissed.
Pronounced in the open court on this 26th day of August, 2016.