M/s. Sai Builders & Developers, Pune V. Deputy Commissioner of Income-tax, (HQ) (Admin) -V, Pune

ITA 2332/PUN/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2596 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 30-05-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 05-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASEEM SHARMA
• Assessee Lawyers: HARI KRISHAN
• Keywords: Opportunity of being heard; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 2332/PUN/2017 / ASSESSMENT YEAR : 2011-12 M/S. SAI BUILDERS & DEVELOPERS, MAHATMA PHULE CHOWK, CHAKAN, TAL. KHED, DIST. PUNE PAN : ANKFS8953D ....... / APPELLANT / V/S. DCIT (HQ) (ADMN.)-V, PUNE / RESPONDENT ASSESSEE BY : SHRI HARI KRISHAN REVENUE BY : SHRI ASEEM SHARMA / DATE OF HEARING : 03.08.2018 / DATE OF PRONOUNCEMENT : 21.08.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-9, PUNE, DATED 15-05-2017 FOR THE A.Y. 2011-12. 2. GROUNDS RAISED BY THE ASSESSEE READ AS UNDER : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.42,68,696/- MADE BY THE LD. AO ON ACCOUNT OF REDUCTION OF SALES WRONGLY CONSIDERED TH E SALES AS PER TENTATIVE P&L A/C TAKEN DURING THE SURVEY EXCLUSIVELY ON ASSUMPTI ON/PRESUMPTION WITHOUT ANY AUTHENTICATE BONAFIDE GROUNDS. THE AFORESAID A DDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES AND CONJECTURE THE LD.C IT(A) OUGHT TO HAVE DELETED THE SAID ADDITION. THE IMPUGNED ADDITION MAY PLEAS E BE DELETED. 2 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.72,63,461/- MADE BY THE LD. AO ON ACCOUNT OF SUPPRESSION OF SALES EXCLUSIVELY ON ESTI MATION BASIS AND IGNORING THE FACTS AND CIRCUMSTANCES OF THE CASE. THE AFORESAID ADDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES AND CONJECTURE THE LD.C IT(A) OUGHT TO HAVE DELETED THE SAID ADDITIONS. THE IMPUGNED ADDITIONS MAY PLE ASE BE DELETED. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF THE EXTENT OF R S.88,78,829/- AGAINST THE ADDITION OF RS.1,20,00,000/- MADE BY THE LD. AO ON ACCOUNT OF INFLATION OF EXPENSES EXCLUSIVELY ON ASSUMPTION/PRESUMPTION AND IGNORING THE SUPPORTING DOCUMENTS AND CORROBORATIVE EVIDENCE. THE AFORESAI D ADDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES AND CONJECTURE THE LD. CIT(A) OUGHT TO HAVE DELETED THE SAID ADDITION. THE IMPUGNED ADDITIONS MAY PLEA SE BE DELETED. 4. THE APPELLANT DENIES HIS LIABILITY TO PAY ANY IN TEREST U/S.234B AND 234C OF THE I.T. ACT, 1961 AND HENCE THE SAME MAY PLEASE BE DELETED. 5. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEN D, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF APPEAL, IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 3. BEFORE US, LD. COUNSEL FOR THE ASSESSEE MENTIONED THAT THERE WAS DELAY OF 51 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. IN THIS C ONNECTION, LD. COUNSEL REFERRED TO THE AFFIDAVIT DATED 18-05-2018 FILED BY THE ASSESSEE AND DREW OUR ATTENTION TO THE REASONS FOR THE SAME. THE R EASONS MENTIONED IN PARA NO.3 ARE REPRODUCED BELOW : 3. AFTER RECEIVING THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS) WE HANDED OVER THE SAME TO OUR TAX CONSULTANT MR. VISH AL S. MAHESHWARI TO PREFER AN APPEAL BEFORE THE HONBLE INCOME TAX APPELLATE T RIBUNAL AND HE UNDERTOOK TO DO THE NEEDFUL. ACCORDINGLY THE APPEAL WAS PREP ARED WELL IN TIME AS IS EVIDENT FROM THE VERIFICATION MADE ON 24-07-2017 ON THE FORM NO.36. HOWEVER BECAUSE OF RUSH OF WORK REGARDING FILING OF RETURNS ETC. BY OVERSIGHT MR. VISHAL S. MAHESHWARI THE TAX CONSULTANT COULD NOT FILE THE APPEAL BEFORE THE STIPULATED DATE. LATER ON WHEN IT WAS REALIZED THAT THE APPEAL HAS NOT BEEN FILED THE SAME WAS FILED ON 05-10-2017. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THERE W AS REASONABLE CAUSE FOR THE ASSESSEE TO FILE THE APPEAL LATE BY 51 DAYS . THEREFORE, THE DELAY IN FILING THE APPEAL IS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION . 4. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSE E IS A FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION. ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,02,50,154/-. THERE WAS SURVEY ACTION U /S.133A OF THE 3 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS ACT ON 09-03-2011. AT THE END OF THE ASSESSMENT PROC EEDINGS, THE AO MADE ADDITIONS WORTH RS.2,36,94,157/-. EVENTUALLY, THE ASSESSMEN T IS COMPLETED COMPUTING THE TOTAL INCOME AT RS.3,39,44,310/-. AO MADE A DDITIONS ON ACCOUNT OF REDUCTION IN SALES, SUPPRESSION OF SALES, INFLATION O F EXPENSES AND OTHER DISALLOWANCE OF EXPENDITURE. DURING THE SURVEY AC TION, THE SURVEY TEAM FOUND A TENTATIVE TRADING AND PROFIT AND LOSS ACCOUNT. O N COMPARISON THE FIGURES APPEARING IN THE SAID TENTATIVE TRADING AND PROFIT A ND LOSS ACCOUNT DID NOT MATCH WITH THE FINAL PROFIT AND LOSS ACCOUNT. AS PER T HE TENTATIVE PROFIT AND LOSS ACCOUNT, THE SALES OF FLATS SHOWN WORKS OUT TO R S.8,37,15,998/- WHEREAS AS PER THE FINAL ACCOUNTS, SALE OF FLATS IS ONLY RS .7,94,47,302/-. THE DIFFERENCE WORKS OUT TO RS.42,68,696/-. ON HEARING THE ASS ESSEES EXPLANATION ON THIS DISCREPANCY, THE AO PROCEEDED TO ADD SUCH DIFFERENCE OF RS.42,68,696/-. 4.1 FURTHER, AO MADE ANOTHER ADDITION OF RS.72,63,461/- ON ACCOUNT OF DIFFERENCE IN PRICE OF FLATS. AO ANALYSED PER SQ.FT. RATE OF V ARIOUS FLATS AND FOUND THE RATES ARE VARYING SUBSTANTIALLY QUA THE AVERA GE RATE FOR THAT YEAR (1757 PER SQ.FT. THE DOWN FIGURE IS 1141 PER SQ.FT.). AO CALCULA TED THE AVERAGE PRICE RATE AND FOUND THE DIFFERENCE OF RS.72,63,461/- IS REQU IRED TO BE ADDED TO THE INCOME OF THE ASSESSEE. AO REJECTED THE ASSESS EES EXPLANATION LINKED TO THE PRICE VARIATION FROM CUSTOMER TO CUSTOMER AND TH E EXTENT OF ADVANCE AMOUNTS PAID BY THE BUYER OF THE FLAT. 4.2 AO ALSO MADE ANOTHER ADDITION OF RS.1.20 CRORES ON ACC OUNT OF EXPENDITURE. THIS IS THE CASE WHERE SURVEY TOOK PLACE O N 09-03-2011 AND DURING THE SURVEY ACTION, ASSESSEE CALCULATED THE PROJEC TED EXPENDITURE BY THE END OF THE FINANCIAL YEAR WHICH WORKS OUT TO RS.1.20 CR ORES. AFTER CONSIDERING THESE CLAIMS, THE NET PROFIT WORKS OUT TO RS.1 ,87,64,975/-. ASSESSEE ALSO OFFERED ADDITIONAL AMOUNT OF RS.15 LAKHS FOR OM ISSIONS. 4 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS HOWEVER, ON EXAMINATION OF THE BOOKS OF ACCOUNT, THIS CLAIM OF RS.1.20 CRORES WAS NOT APPEARING IN THE SAME. FOR WANT OF PROOF OF INCUR RING OF THE SAID EXPENDITURE, THE AO DID NOT ALLOW THE SAID CLAIM OF RS.1.20 CR ORES. THERE WAS ANOTHER ADDITION OF RS.1,62,000/- LINKED TO THE EXPENDITURE. 5. DURING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE AGITATE D AGAINST THE MAJOR ADDITIONS OF RS.42,68,696/-, RS.72,63,461/- AND RS.1.20 C RORES. FIRST ADDITION OF RS.42,68,696/- WAS DISCUSSED IN PARA NO.5 OF THE ORDER OF CIT(A) AND THE CIT(A) CONFIRMED THE SAME REJECTING THE ASSESSE ES EXPLANATION. THE FACT OF THE OTHER ADDITION OF RS.72,63,461/- IS ALSO THE SAME AND THE ADDITION STANDS CONFIRMED. THE OTHER ADDITION OF RS.1.20 CRORES ON ACCOUNT OF INFLATION OF EXPENDITURE WAS PARTLY ALLOWED AND CONFIRMED THE ADDITION TO THE EXTENT OF RS.88,78,829/-. THUS, THE CIT(A) GRANTED PART RE LIEF OF RS.31,21,171/- BEING THE DIFFERENCE IN STOCK IN TRADE. ACCOR DINGLY, THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE SAME, THE ASSESSEE IS IN APPEAL WITH THE ABOVE REFERRED GROUNDS. WE SHALL NOW TAKE UP THE GROUND-WISE ADJUDICATION. 6. GROUND NO.1 RELATES TO THE CONFIRMING OF ADDITION OF RS.42,6 8,696/-. AS DISCUSSED EARLIER, THIS AMOUNT CONSTITUTES THE DIFFERENCE BETWEEN THE FIGURES APPEARING IN THE TENTATIVE FINANCIAL STATEMENT AND THE FINALIZED FINANCIAL STATEMENT. OTHERWISE, THERE IS NO EVIDENCE GATHE RED BY THE AO EITHER DURING THE SURVEY ACTION OR DURING THE POST SURV EY ACTION INVOLVING THE ASSESSEE ON THIS ISSUE OF TOTAL SALES. BEFORE US, IT IS THE CLAIM OF THE ASSESSEE THAT THE FINALIZED FIGURES FOR THE FINANCIAL YEAR ARE ADOPTED AND THEREFORE, THE TENTATIVE FINANCIAL STATEMENT IS NOT SACROSANCT. THEREFORE , THE ADDITION MADE BY THE AO IS REQUIRED TO BE DELETED. 5 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS 7. DURING THE PROCEEDINGS BEFORE US, THE BENCH CALLED FOR A REMAND REPORT FROM THE AO ON THIS ISSUE. THE AO DID NOT RAISE ANY ADVE RSARIAL COMMENTS ADMITTEDLY ON THIS ADDITION AND AGAINST THE ASSESSEE. AD DITIONS MADE ON SUCH TENTATIVE PAPERS ARE OBVIOUSLY UNSUSTAINABLE. CONS IDERING THE SAME, WE ARE OF THE OPINION THAT THE ADDITION IS REQUIRED TO BE DELE TED AND IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, THE GROUND NO.1 STANDS ALLOWED. 8. GROUND NO.2 RELATES TO THE ADDITION OF RS.72,63,461/- ON ACCOUNT OF DIFFERENCE IN RATES PER SQ.FT. OF THE CONSTRUCTED AREA OF TH E FLATS. DETAILS OF WORKING FOR ARRIVING ON THIS ADDITION IS GIVEN IN TABLE AVAILAB LE AT PARA NO.5.2 OF THE ASSESSMENT ORDER. AO ANALYSED AROUND 22 FLATS A ND THEIR SALE PRICES, I.E. RATE PER SQ.FT. AND NOTICED THAT THE PRICE VARY FROM 11 41 PER SQ.FT. TO 1757 PER SQ.FT. IN THIS REGARD, ASSESSEES EXPLANATION THAT T HE FLATS WERE BOOKED THE CUSTOMERS AT AN EARLIER DATE AND THE AGREEMENTS W ERE MADE AT THE LATER DATES. THEREFORE, THE DIFFERENCE IN RATES. FROM THE ADVAN CES PAID BY THE CUSTOMERS THE PRICE RATE IS REDUCED. ACCORDINGLY, RATE PER SQ. FT. DEPENDS ON THE CUSTOMER AND THE ADVANCES RECEIVED FROM THE SAID C USTOMERS. HOWEVER, THE AO DID NOT ACCEPT THE SAID GENERAL EXPLANATION OF THE ASSESSEE. FOR WANT OF EVIDENCES THE AO PROCEEDED TO MAKE ADDITION OF RS.72,63 ,461/-. ON THIS ISSUE, AO SUBMITTED A REMAND REPORT AND THE SAME IS EXTRACTED AS UN DER : I. AGREEMENT DATES HAVE BEEN TAKEN INTO CONSIDERAT ION FOR DETERMINING THE RATES, HOWEVER, THE PARTIES HAD BOOKED THEIR RESPEC TIVE FLATS ON EARLIER DATES. THEREFORE, THE DATE OF BOOKING MAY BE ADOPTED FOR D ETERMINING THE RATES. IN THIS CONTEXT, IT IS STATED THAT THE ASSESSEE HAS SUBMITTED THE DATE OF BOOKINGS, WHICH WAS PERUSED, FROM WHICH IT CAN BE I NFERRED THAT THE AO HAS DETERMINED THE RATES ON THE BASIS OF DATE OF AGREEM ENT AND NOT AS PER BOOKING DATE. FURTHER, THE AVERAGE RATE DETERMINED BY THE A O SEEMS TO BE ON A HIGHER SIDE AS THE AO HAS CONSIDERED EVEN A SINGLE AGREEME NT OF A HIGHER VALUE IN CALCULATING THE AVERAGE. THEREFORE THERE IS MERIT I N THE ASSESSEE'S CONTENTION THAT THE DATE OF BOOKING SHOULD BE CONSIDERED FOR D ETERMINING THE RATES. FURTHER IF THE AVERAGE RATE IS CALCULATED ON THE BASIS OF R ATES AT WHICH MAXIMUM TRANSACTIONS HAVE TAKEN PLACE, THEN THE DIFFERENCE IS WORKED OUT AT RS. 8,75,915/ - AS AGAINST RS. 72,63,461/ - AS ELABORAT ED IN CHART III BELOW. II) IT IS ALSO SUBMITTED BY THE ASSESSEE THAT THE RATES OF THE FLATS WERE DETERMINED ON THE BASIS OF AMOUNT OF ADVANCE PAID B Y THE FLAT HOLDERS. HIGHER 6 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS THE AMOUNT OF ADVANCE, THE RATE WAS REDUCED BY THE ASSESSEE ACCORDINGLY. IT HAS BEEN PERUSED AND DETAILS HAVE BEEN MENTIONED IN THE COLUMN NOS. 7 AND 8 OF THE CHART I GIVEN BELOW. AS PER DETAILS, THE CONTENTION OF THE ASSESSEE, THAT THE RATES ARE DETERMINED ON THE BASI S OF ADVANCES IS NOT FOUND TO BE CORRECT. 9. FURTHER, THE AO ALSO FURNISHED VARIOUS PERMUTATIONS AND COMBINATIONS GIVING DIFFERENT CHARTS IN THE REPORT AND SUBMITTED THAT T HE ADDITION SHOULD ATLEAST BE AROUND RS.8,75,915/- IN PLACE OF RS.72,63,461/-. I N THIS REGARD, ASSESSEES COUNSEL MENTIONED THAT THE ADDITION OF RS.8,75,9 15/- IS ALSO NOT REQUIRED TO BE MADE AND RELIED ON THE VARIOUS DECISIONS G IVEN THE FOLLOWING WRITE UP : 3. REGARDING THE ADDITION OF RS.72,63,461/- MADE ON AC COUNT ESTIMATED RATE DIFFERENCE THE ASSESSING OFFICER IN PARA 6 OF THE R EMAND REPORT HAS MENTIONED THAT WHILE MAKING THE ASSESSMENT THE ASSESSING OFFI CER HAS DETERMINED THE RATES ON THE BASIS OF THE DATE OF AGREEMENT AND NOT ON THE BASIS OF THE DATE OF THE BOOKING. IT IS FURTHER MENTIONED IN THE REMAND REPORT THAT THE AVERAGE RATE DETERMINED BY THE EARLIER ASSESSING OFFICER IS ON T HE HIGHER SIDE AS HE HAS CONSIDERED EVEN A SINGLE AGREEMENT OF HIGHER VALUE IN CALCULATING THE AVERAGE. THE ASSESSING OFFICER HAS ACCORDINGLY COMPUTED IN T HE REMAND REPORT THE AMOUNT OF DIFFERENCE AT RS.8,75,000/- AS AGAINST TH E DIFFERENCE OF RS.72,63,461/- COMPUTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ON ACCOUNT OF ESTIMATED RATE DIFFERENCE . 3.1 IT IS SUBMITTED THAT NO ADDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF ANY DIFFERENCE ARRIVED IN THE SALE RA TES, MERELY BY TAKING AVERAGE OF THE SALE RATES OF ALL THE FLATS SOLD IN A PARTIC ULAR PERIOD, WITHOUT BRINGING ANY MATERIAL ON RECORD SHOWING THAT THE ASSESSEE HAS AC TUALLY RECEIVED ANYTHING MORE THAN THE CONSIDERATION RECORDED IN THE SALE AG REEMENT OF THE FLATS. RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS : (A) M/S. SHIVAKAMI CO. PVT. LTD. 159 ITR 71 (SC) A ND GODAVARI CORPORATION LTD. 200 ITR 567 (SC) (B) M.J. CHERIAN 117 ITR 3712 (KERALA) (C) M/S. SHAH REALTORS, THANE ITA NO.2656/MUM/201 6 3.2 A PERUSAL OF CHART 1 IN PARA 6 OF THE REMAND RE PORT CLEARLY SHOWS THAT WHERE EVER THE FLATS HAVE BEEN SOLD AT HIGHER RATES E.G. FLAT NO. A-05, FLAT NO. A-19, FLAT NO. D-09 AND FLAT NO. D-05, NO ADVANCE W AS RECEIVED FROM THE BUYERS, WHERE AS FOR ALL OTHER SALES, ADVANCE AS ME NTIONED IN COL. 8 OF THE CHART HAS BEEN RECEIVED. THUS THERE IS A COMPLETE JUSTIFI CATION FOR CHARGING HIGHER RATES AND LOWER RATES FOR THE RESPECTIVE SALES DEPE NDING UP THE ADVANCE PAID BY THE BUYERS. 3.3 IT IS FURTHER SUBMITTED THAT THE RATE FOR SALE OF FLATS IN A PROJECT WILL SOMETIMES FURTHER VARY DEPENDING UPON, THE LOCATION OF THE FLATS; WHETHER THE 7 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS FLAT IS LOCATED ON THE FRONT SIDE OR BACK SIDE OF T HE BUILDING; WHETHER THE FLAT HAS A GOOD VIEW, THE TERMS OF THE PAYMENTS AND THE SPEC IFICATIONS OF THE AMENITIES TO BE PROVIDED IN A PARTICULAR FLAT. THEREFORE IT I S NOT POSSIBLE TO FIX THE SAME RATE FOR ALL THE FLATS IN A PROJECT. FINALLY, HE SUBMITTED THAT THE ISSUE MAY BE REMANDED TO THE FILE OF AO FOR VERIFICATION AND DELETION OF SUCH ADDITION. IN ANY CASE, A S PER LD. COUNSEL, THE ADDITION NEEDS TO BE RESTRICTED TO RS.8,75,915/- ONLY. 10. ON HEARING BOTH THE PARTIES AND CONSIDERING THE REVIS ED SUBMISSIONS MADE BY BOTH THE PARTIES, WE ARE OF THE CONSIDERED OPIN ION THIS ISSUE REQUIRES REMANDING TO THE FILE OF AO FOR FRESH CONSIDERATION AND FOR W ANT OF A SPEAKING ORDER ON ALL THE GROUNDS IN GENERAL AND NEW ARGUMENTS R AISED BEFORE US. ACCORDINGLY, THE AO SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUS TICE. THUS, THE GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 11. REGARDING THE OTHER ADDITION OF RS.1.20 CRORES, WE HAV E ALREADY EXPLAINED THE BASIC FACTS IN THE PRECEDING PARAGRAPHS OF THIS ORDER. THE SAID AMOUNT OF RS.1.20 CRORES IS THE PROJECTED EXPENDITURE FOR THE PERIOD SUBSEQUENT TO THE DATE OF SURVEY, I.E. 09-03-2011. THE C ORRECTNESS OF THIS EXPENDITURE IS THE ISSUE TOGETHER WITH FURNISHING OF EVIDE NCES TO THE FILE OF AO. DURING THE PROCEEDINGS BEFORE US, AS PER THE REMAND REPORT, THE AO SUBMITTED THAT THE SAID AMOUNT OF RS.1.20 CRORES DOES NO T APPEAR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. ON THE OTHER SIDE, A O MENTIONED THAT BOOKS OF ACCOUNT ARE NOT AVAILABLE FOR VERIFICATION. HE HOWE VER GAVE A FINDING IN PARA 4 OF THE REMAND REPORT THAT THE TOTAL EXPENDIT URE AS PER THE RETURN OF INCOME IS ONLY RS.93,45,021/- (INCREASE OF EXPENDITURE ON PU RCHASE ACCOUNT AMOUNTING TO RS.78,36,493 + DIRECT EXPENDITURE OF RS.15,08,52 8/-). IN THIS REGARD, HE FURNISHED THE FOLLOWING WRITE UP AND THE SAME IS REPRODUCED AS UNDER : 8 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS 04. HOWEVER, AN ANALYSIS/COMPARISON OF THE P&L ACC OUNT DRAWN AT THE TIME OF SURVEY AND THE P&L ACCOUNT ENCLOSED ALONG WITH T HE RETURN OF INCOME WAS DONE AND IT WAS REVEALED THAT THE PURCHASE ACCOUNT HAS INCREASED BY RS.78,36,493/- (REF. ANNEX-A). IT IS ALSO SEEN THA T CERTAIN EXPENSES UNDER THE HEAD VIZ., ELECTRICITY EXPENSES, LIFT EXPENSES, MSE B BILL, PROFESSIONAL FEES, SURVEY CHARGES, VAT PAID AMOUNTING TO RS.15,08,528/ - WHICH WERE NOT APPEARING IN THE TENTATIVE P&L ACCOUNT ARE FOUND IN THE FINAL P&L ACCOUNT. THEREFORE, THE EXPENSES WHICH HAVE BEEN CLAIMED IN RETURN OF INCOME FOR THE FIRST TIME ARE TO THE EXTENT OF RS.93,45,021/- (PUR CHASES RS.78,36,493/- + OTHER DIRECT EXPENSES : RS.15,08,528). HOWEVER THE ABOVE EXPENSES OF RS.93,45,021/- FORM A PART OF THE CONSTRUCTION EXPE NSES TO BE INCURRED OF RS.1.2 CR CANNOT BE ESTABLISHED IN ABSENCE OF BOOKS OF ACC OUNT ON RECORD. 05. IT IS FURTHER STATED THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD SUBMITTED A LIST OF HILLS MENTIONED AS 'AFTER S URVEY FUR DATED 9/3/2011 RECORDED BILLS' AMOUNTING TO RS.79,89,110/ -. THE H EADING OF THE LIST CLEARLY MENTIONS THAT THESE BILLS HAVE BEEN RECORDED IN THE BOOKS AFTER THE SURVEY IMPLYING THAT THE EXPENSES AS PER THE BILLS MIGHT B E INCURRED EARLIER BUT NOT RECORDED TILL THE TIME OF SURVEY. ON PERUSAL OF THE SE BILLS IT WAS SEEN THAT THE BILLS PERTAINED TO PURCHASE OF MATERIAL OF VARIOUS TYPES RELATED TO CONSTRUCTION. OUT OF THE ABOVE, THE BILLS PERTAINING TO SAI SAMRA JYA SCHEME ARE BASICALLY OF THE NATURE OF ITEMS REQUIRED FOR FINISHING WORK VIZ - LIFT EXPENSES, ELECTRICAL FITTINGS, CLEANING WORK, HARDWARE, CONSULTANT FEES ETC WHEREAS THE BILLS PERTAINING TO SAI SAMPADA ARE OF THE INITIAL STAGES OF CONSTRUCTION VIZ BINDING WIRE, PLYWOOD MATERIAL ETC. THUS TOTAL BILLS OF MAT ERIAL PURCHASE WERE OF 79,89,110/ -.OUT OF THESE PART OF THE BILLS AMOUNTIN G TO RS 22,64,084/ - WERE OF DATE AFTER THE SURVEY AND BALANCE BILLS OF RS.57,25 ,026/- WERE DATED BEFORE THE SURVEY. 12. IN RESPONSE, LD. COUNSEL FOR THE ASSESSEE ALSO FILED THE WRITTEN SUBMISSIONS STATING THAT THE EXPENDITURE ACTUALLY INCURRE D POST SURVEY PERIOD IS UNDISPUTEDLY RS.93,45,021/- OUT OF PROJECTED EXPENDITU RE OF RS.1.20 CRORES. AS PER THE ASSESSEE, THE SAID FIGURE STANDS SU BSTITUTED BY THE FIGURE OF RS.95,43,148/- ON THE BASIS OF THE BILLS ACCOUNTED FOR AFT ER THE SURVEY ACTION. THIS GAVE RISE TO THE DIFFERENCE OF RS.1,98,127/- AND THE SAME IS ATTRIBUTABLE TO A MERE CALCULATION MISTAKE MADE BY THE AO OR BY THE AS SESSEE. 13. AFTER HEARING BOTH THE SIDES ON THIS ISSUE, WE FIND IT IS ACCEPTED POSITION THAT THE ACTUAL EXPENDITURE INCURRED IS TO THE T UNE OF RS.93,45,021/- WHICH CANNOT BE DISALLOWED BY THE AO UNDER ANY CIRCUMSTA NCES CONSIDERING THE FACT THAT THE SAID EXPENDITURE WAS NOT ONLY INCURR ED BUT ALSO CONSTITUTE A GENUINE EXPENDITURE. THE DIFFERENCE WORKS OUT TO RS.26,54,9 79/-. THIS FIGURE IS ARRIVED FOR THE FIRST TIME BEFORE US AND THEREFORE, IT IS IN THE INTEREST 9 ITA NO. 2332/PUN/2017 M/S. SAI BUILDERS AND DEVELOPERS OF JUSTICE, THIS ISSUE SHOULD BE REMANDED TO THE FILE OF AO F OR RE-COMPUTING THE DISALLOWABLE AMOUNT FOR ADDITION OUT OF THE SAID SUM OF R S.1.20 CRORES. AO SHALL ALSO NOTE THAT THE CIT(A) GRANTED RELIEF TO THE EX TENT OF RS.31,21,171/- AT THE TIME OF RE-EXAMINATION OF THIS ISSUE. THEREFORE, AO IS DIRECTED TO EXAMINE THIS ENTIRE ISSUE AFRESH WITH REGARD T O THE GENUINENESS AS WELL AS THE CORRECTNESS OF THE EXPENDITURE ACTUALLY INCUR RED DURING THE YEAR UNDER CONSIDERATION AND DECIDE THE ISSUE AFTER OBTAINING T HE EVIDENCES AND ALSO AFTER GRANTING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, GROUND NO.3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 21 ST DAY OF AUGUST, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . / D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 21 ST AUGUST, 2018. SATISH # # # # / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-9, PUNE. 4. THE PR. CIT-8, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE.