DCIT , JHANSI vs. KKG REAL ESTATE P LTD, JHANSI

From case records, it emerges that pursuant to survey u/s 133A on the assessee on 25-03-2015, the case was reopened and notice u/s 148 was issued on 11-02-2016. The assessee e-filed return of income on 26- 10-2015. On the basis of total receipts shown by the assessee between three months as found during survey, the receipts of entire financial years were estimated and profit thereon was computed at 10% which resulted into addition of Rs.2 Crores in the hands of the assessee. There were credits in bank account for Rs.2.66 Crores which were separately added to the income of the assessee and the assessment was framed at total income of Rs.4.71 Crores.

The Ld. CIT(A), in para 6.3, observed that as per document found, the receipts were only Rs.5.51 Crores and 10% thereof i.e., Rs.55.14 Lacs alone was to be treated as business income of the assessee. The extrapolation as made by Ld. AO was rejected since no material was found in that regard. Consequently, separate addition of bank credit was deleted since the same would amount to double addition. Aggrieved, the revenue is in further appeal before us.

It is quite clear that the impugned additions are made on the basis of documents found during survey. However, receipts only for three months have been found whereas receipts for entire year have merely been extrapolated without there being any other material on record to support the same. It is trite law that only the real income has to be brought to tax and the assessment cannot be made on mere presumptions. The consequential addition has also rightly been deleted since the same are part of business receipts only. Adding the same again would amount to doble addition which is impermissible. Therefore, we do not find any infirmity in the impugned order.

The appeal stands dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.