M/s Horizon Builders & Developers, Amritsar. V. The Assistant Commissioner of Income Tax, Amritsar.

ITA 399/ASR/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5756 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-01-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 27-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained expenditure
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NOS.399&400(ASR)/2015 ASSESSME NT YEARS: 2007-08&2009-10 PAN: AAEFH 5966J M/S. HORIZON BUILDERS & DEVELOPERS 54-PALM GROOVE, AJNALA ROAD, AMRITSAR. VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-V, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHWANI KALIA ( C.A) RESPONDENT BY: SMT. BALWINDER KAUR (D.R) DATE OF HEARING : 30.01.2018 DATE OF PRONOUNCEMENT: 08.02.20 18 ORDER PER SANJAY ARORA, A.M. THIS IS A SET OF TWO APPEALS BY THE ASSESSEE FOR TW O SUCCEEDING YEARS, BEING ASSESSMENT YEARS (AYS.) 2007-08 & 2009-10, ARISING OUT OF THE ORDERS BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, AMRITSAR ( CIT(A) FOR SHORT) OF EVEN DATE, I.E., 28.05.2015, DISMISSING THE ASSESSEES A PPEALS CONTESTING ITS ASSESSMENTS FOR THE SAID YEARS U/S. 153C OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER), BOTH DATED 30.12.2011. 2. THE SOLE ISSUE ARISING IN THESE APPEALS IS THE S USTAINABILITY IN LAW, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, OF THE ADDITION IN T HE SUM OF RS. 9.92 LACS AND RS. 6.10 LACS FOR THE TWO SUCCESSIVE YEARS RESPECTIVELY , EFFECTED U/S. 69/69A OF THE ACT. ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 2 ITA NO. 399/ASR/2015 (A.Y. 2007-08) 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, A PARTNERSHIP FIRM IN THE BUSINESS OF CIVIL CONSTRUCTION, AS BUILDERS AS WELL AS ON CONTRACT BASIS, WAS ISSUED NOTICE U/S. 153C OF THE ACT ON 18.03.2011 ON THE BA SIS OF INCRIMINATING MATERIAL FOUND IN SEARCH ON 05.02.2009 AT THE BUSINESS PREMI SES OF A FIRM, M/S. KHANNA PAHWA ASSOCIATES, AS WELL AS AT THE RESIDENCES OF I TS PARTNERS. THE SAID FIRM, IN PROPERTY DEALING, IS A RELATED CONCERN IN-AS-MUCH A S ITS TWO PARTNERS ARE FATHERS OF TWO OF THE THREE PARTNERS OF THE ASSESSEE-FIRM. THE RETURNED INCOME BEING NIL, ASSESSMENT WAS FRAMED AT RS. 11 LACS, BEING RS. 10 LACS ADDED U/S. 69/69A ON ACCOUNT OF UNEXPLAINED EXPENDITURE, AND RS. 1 LAC E STIMATED AS INCOME ON CONTRACT WORK. IN APPEAL, THE LD. CIT(A) FOUND THAT THE AGGR EGATE EXPENDITURE FOR THE RELEVANT YEAR, AS PER THE DOCUMENTS FOUND DURING SE ARCH, FOUND UNRECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE-FIRM (RECORDED BY ASSESSING OFFICER (AO) AT PAGES 3 AND 4 OF THE ASSESSMENT ORDER), IS RS. 9,92 ,211. THE ADDITION OF THE BALANCE RS. 7,789 WAS ACCORDINGLY DELETED. THE ADDITION OF RS. 1 LAC AS ESTIMATED INCOME WAS, AGAIN, BOTH AD HOC AND WITHOUT BASIS. THE ASSESSEE SECURING PART RELI EF THUS, IS IN SECOND APPEAL AGAINST THE ASSESSMENT TO THE EXTE NT CONFIRMED. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MA TERIAL ON RECORD. THE ARGUMENT THAT THERE WAS NO SEARCH AT THE BUSINE SS PREMISES OF THE ASSESSEE OR ITS PARTNERS - A MATTER OF FACT, IS WIT HOUT ANY CONSEQUENCE EITHER IN LAW OR ON FACTS. THE BASIS OF THE IMPUGNED ASSESSMENT I S THE MATERIAL FOUND DURING SEARCH OF ANOTHER IN FACT, A RELATED PARTY, FOR W HICH THE LAW PROVIDES U/S. 153C. IN FACT, THE INITIATION OF PROCEEDINGS, AND ASSUMPT ION OF JURISDICTION TO ASSESS, IS NOT UNDER CHALLENGE; THE LD. COUNSEL FOR THE ASSESSEE, SH. ASHWANI KALIA, NOT PRESSING GROUNDS 1 AND 7 OF THE APPEAL, MAKING AN ENDORSEMEN T TO THAT EFFECT THEREON. THE NEXT ARGUMENT ADVANCED BEFORE US, PLA CING RELIANCE ON THE DECISION IN CIT VS. RAVI KUMAR [2007] 294 ITR 78 (P&H), IS THAT THE ASSESSMENT IS BAD IN LAW ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 3 AS NEITHER SECTION 69 NOR SEC. 69A IS APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE HON'BLE HIGH COURT HAD IN THAT CASE H ELD THAT SECTION 69A CANNOT BE INVOKED UNLESS THE ASSESSEE IS FOUND TO BE IN POSSE SSION OR OWNERSHIP OF ANY VALUABLE ARTICLE, JEWELLERY, ETC., FINDING NOTHING PERVERSE IN THE FINDINGS BY THE TRIBUNAL TO THE EFFECT THAT THE ASSESSEE, ON THE BA SIS OF THE MATERIAL ON RECORD, HAD NOT BEEN FOUND TO BE SO. WE FIND LITTLE MERIT IN TH E ASSESSEES ARGUMENT. TO BEGIN WITH, A PRECEDENT IS AN AUTHORITY ONLY FOR WHAT IT ACTUALLY DECIDES AND NOT WHAT MAY REMOTELY OR EVEN LOGICALLY FOLLOW FROM IT, AS CLARI FIED IN GOODYEAR INDIA LTD. VS. STATE OF HARYANA AND ANOTHER [1991] 188 ITR 402 (SC) (ALSO REFER: CIT V. SUN ENGINEERING WORKS (P.) LTD . (1992) 198 ITR 297 (SC); LACHMAN DASS BHATIA HINGWALA (P.) LTD. VS. ASSTT. CIT (2011) 330 ITR 243 (DEL.) (FB); BLUE STAR LTD. V. CIT (1996) 217 ITR 514 (BOM)). IT IS THE RATIO OF A JU DGMENT THAT IS BINDING, AND ALL THAT HON'BLE COURT HAS LAID DOWN IS THAT THE CO NDITIONS PRECEDENT FOR A SECTION ARE TO BE SATISFIED BEFORE THE SAME COULD BE INVOKE D. THE MATTER THEREFORE BOILS DOWN TO BEING ONE OF FACT. IN THE FACTS OF THE PRES ENT CASE, EXPENDITURE ON BUILDING MATERIAL AS WELL AS ON SERVICES IN RELATION TO CONS TRUCTION WAS FOUND. THE SAME WAS MET BOTH VIDE CHEQUE AS WELL AS IN CASH. WHILE THE FORMER COMPONENT WAS RECORDED IN THE ASSESSEES REGULAR BOOKS OF ACCOUNT, THE LAT TER WAS NOT. IT IS THE SOURCE OF THIS CASH, UTILIZED FOR MEETING THE EXPENDITURE, LISTED SEPARATELY, DATE-WISE BASIS, WHICH HAS BEEN DEEMED AS INCOME IN VIEW OF IT BEING UNEXP LAINED AS TO ITS SOURCE. THAT IS, THE ASSESSEE HAS, IN TERMS OF THE DOCUMENT FOUN D IN SEARCH WHICH IS TO BE REGARDED AS TRUE IN TERMS OF S. 292C OF THE ACT, IN CURRED THE EXPENDITURE, PAYING FOR THE SAME IN CASH, SO THAT THE AVAILABILITY OF C ASH WITH IT ON THE RELEVANT DATE/S (OF PAYMENT) IS PROVED. THE SAME CLEARLY FALLS U/S. 69A, WHICH READS AS UNDER: ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 4 UNEXPLAINED MONEY, ETC. 69A. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND T O BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE AND SU CH MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE IS NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOU T THE NATURE AND SOURCE OF ACQUISITION OF THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE, OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATIS FACTORY, THE MONEY AND THE VALUE OF THE BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. ALTERNATIVELY, IT COULD EQUALLY BE SAID THAT THE AS SESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF EXPENDITURE FOUND TO HAVE BEEN INCURR ED DURING THE RELEVANT YEAR, IN WHICH CASE SECTION 69C, WHICH DEEMS UNEXPLAINED A S TO ITS SOURCE, EXPENDITURE, AS INCOME, GETS ATTRACTED. HOW, ONE WONDERS, THEN, DOES ITS MATTER OR THE ASSESSEE PREJUDICED IF ONE SECTION IS SPECIFIED IN PREFERENC E TO ANOTHER; THE ASSESSEE, IN EITHER CASE, BEING REQUIRED TO EXPLAIN THE SOURCE F OR MEETING THE EXPENDITURE, DEEMING THE SAME AS INCOME WHERE NOT SATISFACTORILY EXPLAINED. AS EXPLAINED IN HAZURIMAL KUTHIALA V. ITO [1961] 41 ITR 12 (SC), THE EXERCISE OF POWER WOULD BE REFERABLE TO A JURISDICTION WHICH CONFERS VALIDITY UPON IT AND NOT TO A JURISDICTION UNDER WHICH IT WOULD BE NUGATORY. IN THE FACTS OF T HAT CASE, IT WAS THEREFORE HELD BY THE HON'BLE COURT THAT THE ORDER OF THE COMMISSIONE R WAS NOT INVALID MERELY BECAUSE IT WAS NOT MADE UNDER THE PATIALA ACT. RATH ER, IN THE FACTS OF THE INSTANT CASE IT IS, AS AFORE-STATED, SECTION 69A WHICH IS M ORE APTLY APPLICABLE. THIS IS AS NOT ONLY IS THE ASSESSEE FOUND TO HAVE INCURRED EXPENDI TURE DURING THE RELEVANT YEAR, THE SAME STANDS MET BY PAYMENTS IN CASH DURING THE RELEVANT YEAR. IT IS ONLY THESE CASH PAYMENTS, AND NOT THE TOTAL EXPENDITURE ACTUAL LY INCURRED, ON ACCOUNT OF IT BEING UNEXPLAINED AS TO SOURCE THEREOF, WHICH IS BR OUGHT TO TAX AS ITS INCOME . THE ASSESSEES NEXT ARGUMENT IS THAT IT HAD DURING THE RELEVANT YEAR, APART FROM THE WORK FOR SELF, ALSO UNDERTAKEN WORK FOR ON E, MR. ANIL SETH, CONSTRUCTING A ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 5 HOUSE FOR HIM, INCURRING MAJOR EXPENDITURE DURING T HE RELEVANT YEAR, EVEN AS THE CONSTRUCTION WAS COMPLETED ONLY DURING F.Y. 2008-09 , I.E., IN JUNE, 2008, AS EVIDENCED FROM THE MATERIAL FOUND DURING SEARCH ITS ELF. THE EXPENSES INCURRED IN CASH PERTAIN TO HIS WORK, WHICH WAS BEING PAID FOR BY HIM. THE ASSESSEE HAD IN FACT INCURRED A LOSS ON THIS WORK AS, AGAIN, MANIFEST FR OM THE SAID MATERIAL, BEING IN THE FORM OF AN ACCOUNT. THE EXPLANATION HAS TWO ASPECTS . AS REGARDS LOSS, SO THAT THE AMOUNT PAID BY THE ASSESSEE (RS. 14.15 LACS) IS HIG HER THAN THAT RECEIVED FROM SHRI ANIL SETH, THE SAME IS OF LITTLE CONSEQUENCES AS TH E ASSESSEE HAD NOT CLAIMED THE SAID LOSS AS A BUSINESS LOSS PER ITS RETURN OF INC OME, REQUIRED TO BE U/S. 139(3) FILED BY THE DUE DATE OF FILING THE RETURN U/S. 139(1). W HERE, IN FACT, IS THE QUESTION OF CLAIM OF LOSS WHEN THE ASSESSEE HAS NOT ACCOUNTED F OR THE SAID WORK? THE CLAIM IS ALSO UNTENABLE AS THE CONTRACT WORK IMPLIES THAT TH E ASSESSEE IS ENTITLED TO AN AGREED AMOUNT, EITHER IN ABSOLUTE TERMS OR SPECIFIED IN PE RCENTAGE, OVER AND ABOVE THE COST INCURRED. A FIXED PRICE, IRRESPECTIVE OF THE COST I NCURRED BY THE ASSESSEE, ON THE OTHER HAND, IMPLIES IT TO BE A SALE OF CONSTRUCTION . RATHER, AND THIS CONSTITUTES THE SECOND ASPECT OF THE MATTER, INCURRING A HIGHER EXP ENDITURE IMPLIES THAT THE EXPENDITURE WAS INCURRED IN THE FIRST INSTANCE BY T HE ASSESSEE, WHICH WAS SUBSEQUENTLY REIMBURSED BY MR. ANIL SETH. THE ASSES SEE COULD NOT HAVE SUFFERED A LOSS, AS SIGNIFIED BY THE EXPENDITURE INCURRED BEIN G HIGHER THAN THE RECEIPT, IF THE EXPENDITURE WAS BEING INCURRED FROM THE CASH MADE A VAILABLE TO THE ASSESSEE BY HIM. ON THE CONTRARY, HOW DOES THE ASSESSEE EXPLAIN THE SOURCE OF THE EXCESS EXPENDITURE? THE ARGUMENT, INSTEAD OF ADVANCING, DE FEATS THE ASSESSEES CASE. THAT APART, THERE ARE OTHER INFIRMITIES IN THE ARGUMENT. THERE IS, FIRSTLY, NOTHING ON RECORD TO SHOW THAT THE CONSTRUCTION COMMENCED DURI NG THE RELEVANT PREVIOUS YEAR, I.E., F.Y. 2006-07. RATHER, GOING BY THE FACT THAT IT GETS COMPLETED OR SUBSTANTIALLY SO, IN END JUNE, 2008, IT WOULD, GIVEN THE TIME IT NORMALLY TAKES FOR THE CIVIL CONSTRUCTION OF A RESIDENTIAL HOUSE, HAVE COMMENCED SOME TIME IN F.Y. 2007-08, ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 6 I.E., THE PREVIOUS YEAR RELEVANT TO AY 2008-09. THE N, AGAIN, THE BASIS OF THE ASSESSEES CLAIM IS THAT WHILE THE EXPENDITURE DISC HARGED PER CHEQUES IS FOR SELF, THAT MADE IN CASH IS FOR THE CONTRACT WORK, BEING U NDERTAKEN FOR SHRI ANIL SETH, AND ONE, MS. VANI, ACCOUNT OF BOTH WHICH APPEARS ON THE SAME SHEET/SEIZED MATERIAL (PB PAGE 39), WITH THE ASSESSEE EARNING A PROFIT ON THE LATTER PROJECT. NO CORRELATION BETWEEN EXPENDITURE INCURRED AND THE PAYMENTS IN CA SH, SO THAT THEY PERTAIN TO SPECIFIC ITEM/S OF EXPENDITURE, HAS BEEN MADE AT AN Y STAGE, INCLUDING BEFORE US, WITH IN FACT, THE CASH BEING PAID IN ROUND FIGURES WHILE THE EXPENDITURE IS IN ODD FIGURES. IN THE ABSENCE OF ANY CORRELATION AND, IN FACT, APPARENT CONTRADICTION, THE ASSESSEES CASE IS WITHOUT ANY FACTUAL BASIS. THE ASSESSEES NEXT ARGUMENT IS, AGAIN, ONLY TO BE STATED TO BE REJECTED. IT IS PLEADED THAT AS THE PARTNERS HAD SURRENDERED A TOTA L OF RS. 54 LACS, THE SAME BE TELESCOPED AGAINST THE ADDITION THAT MAY STAND TO A RISE IN THE CASE OF THE ASSESSEE- FIRM. THIS IS AS IT IS THEY WHO MADE THE CASH AVAIL ABLE TO THE FIRM, WHICH COMMENCED OPERATIONS DURING THE CURRENT YEAR, I.E., IN JUNE, 2006. THE INCOME REFERRED TO AND OFFERED BY THE PARTNERS IS FOR AY 2 009-10, WHICH IS THE SECOND YEAR IN APPEAL BEFORE US. HOW COULD THE INCOME GENERATED , EVEN IF TRANSLATING INTO CASH, DURING THE PREVIOUS YEAR RELEVANT TO AY 2009-10, BE CONCEIVABLY AVAILABLE DURING THE RELEVANT YEAR, I.E., F.Y. 2006-07. THE LD. AR H AD NO ANSWER. FINALLY, THE ASSESSEES STATES THAT THERE HAS BEEN SOME DUPLICATION IN ARRIVING AT THE FIGURE OF RS. 9.92 LACS. THIS IS AS THE SAME FIGURE OF CASH EXPENDITURE GETS INCLUDED BOTH FROM THE ACCOUNT OF THE EXPENDITURE A S WELL AS OF THE VENDOR, I.E., FROM WHOM THE RELEVANT GOODS/SERVICES STAND SOURCED . WE WERE TAKEN THROUGH THE RELEVANT SHEET (PB PAGES 24 TO 38) BY THE LD. AR, T O EXHIBIT THE SAME. WE FIND THIS AS CORRECT. ALSO, IT WAS SHOWN BY HIM THAT IN A COU PLE OF CASES, THE PAYMENT MADE IN APRIL, 2007 HAS BEEN ALSO INCLUDED WHILE CASTING THE TOTAL PAYMENT FOR WHICH ADDITION HAS BEEN MADE. THE LD. DR COULD NOT REBUT THE SAME, BEING EVEN ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 7 OTHERWISE APPARENT. EVEN AS THE LD. AR WAS PROVIDED OPPORTUNITY BY THE BENCH TO QUANTIFY THE SAID DUPLICATION, SO THAT WE MAY DELET E THE ADDITION TO THAT EXTENT, NO WORKING WAS PROVIDED. WE, THEREFORE, SUBJECT TO THE VERIFICATION BY THE A.O. IN THE MATTER, DIRECT FOR THE DELETION OF THE ADDITION TO THE EXTENT OF THE SAID DUPLICATION, CLEARLY SPECIFYING THE SAME IN HIS ORDER, AS WELL A S OF THE ADDITION QUA CASH PAYMENTS MADE AFTER MARCH 31, 2007. THE ASSESSEE SH ALL PROVIDE THE NECESSARY DETAILS/CALCULATION. WE DECIDE ACCORDINGLY, AND THE ASSESSEE GETS PARTLY RELIEF. ITA NO. 400/ASR/2010 (A.Y. 2009-10) 5. A READING OF THE ASSESSMENT ORDER REVEALS THAT T HE ADDITION HAS IN FACT NOT BEEN MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE, AS INFERRED, OR EVEN QUA UNEXPLAINED CASH, BUT FOR THE EXCESS UNACCOUNTED RE CEIPT (RS. 12.15 LACS) OVER THE UNEXPLAINED EXPENDITURE (RS. 6.06 LACS), AS FOUND O N THE BASIS OF THE SEIZED MATERIAL (PB PAGES 10-25). HOWEVER, AS THE LD. AR W OULD POINT OUT DURING HEARING, THE VERY SAME SHEET THAT REFLECTS THE RECEIPT OF RS . 12.15 LACS FROM SHRI ANIL SETH, DRAWN AS ON 25.06.2008, ALSO STATES THE EXPENDITURE INCURRED ON THAT PROJECT, AT RS. 14.74 LACS, INCURRING THUS A LOSS OF RS. 2.59 LACS. THE A.O. COULD NOT READ A DOCUMENT DE HORS ITS CONTEXT, DRAWING AN INFERENCE AS FAVOURABLE TO HIM, CONTRARY TO WHAT THE DOCUMENT EXPLICITLY STATES. 6. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE REVENUES CASE IS WITHOUT ANY SUBSTANCE. PB PA GE 25, LISTING THE RECEIPT AND EXPENDITURE ON TWO HOUSING PROJECTS, AS APPEARS TO BE THE CASE, IS AT THE END OF OR TOWARDS THE COMPLETION OF THE SAME, IS SUMMARIZE D AS UNDER: (AMT. IN RS. LACS) A/C UPTO RECEIPT EXPENDITURE PROFIT/(LOSS) 1. ANIL SETH 25/6/2008 12.05 14.64 (2.59 ) 2. VANI 26/6/2008 5.50 4.62 0.88 TOTAL 17.55 19.26 (1.71) ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 8 THE AO HAS, WHILE TAKING THE RECEIPT ON THE BASIS O F THIS DOCUMENT, I.E., FROM SHRI ANIL SETH, INCLUDED ANOTHER RS. 10,000 (THE SAID PA GE NOT FORMING PART OF THE ASSESSEES PB), I.E., AT RS. 12.15 LACS, TAKEN THE EXPENDITURE ON THE BASIS OF ANOTHER SET OF DOCUMENTS, TOTALING TO RS. 6.10 LACS. THE DI FFERENCE OR THE EXCESS RECEIPT OF RS. 6.05 LACS (I.E., RS. 12.15 LACS - RS. 6.10 LACS), WRONGLY TA KEN BY HIM AT RS. 6.10 LACS, WAS ADDED TO THE RETURNED INCOME (REFER PARA 2/PG. 4 OF THE ASSESSMENT ORDER). HOW COULD THAT BE? THE DOCUMENT CLEARLY STATES OF THE ASSESSEE HAVING INCURRED A LOSS ON THE ANIL SETH PROJECT, AT RS. 2.59 LACS. RA THER, THE OTHER PART OF THE DOCUMENT, STATING THE PROFIT EARNED ON ANOTHER PROJ ECT, ALSO COULD NOT BE IGNORED, SO THAT THE ASSESSEE HAS IN FACT INCURRED A LOSS OF RS. 1.71 LACS. HOW COULD THE SAID DOCUMENT BE INTERPRETED TO CONSTRUE INCOME? IN FACT , EVEN CONSIDERING FROM THE STAND-POINT OF THE SOURCE OF EXPENDITURE, THE DOCUM ENT EXPLAINS THE SOURCE OF CASH, BEING FROM THE PROJECT OWNERS IN THE MAIN, AND FROM THE PARTNERS (SPECIFIED BY NAME, WITH THEIR RESPECTIVE AMOUNTS). IN FACT, NONE OF THE DOCUMENTS LISTING THE EXPENDITURE, SAVE THREE, LIST THE DATES ON WHICH TH E SAME IS INCURRED. HOW COULD THEN IT BE SAID THAT THE SAME IS INCURRED DURING TH E RELEVANT PREVIOUS YEAR, I.E., F.Y. 2008-09, EVEN AS THAT BEFORE 26.06.2008 WOULD GET E XPLAINED ON THE BASIS OF THE RECEIPT AND EXPENDITURE STATEMENT, DISCUSSED ABOVE (PB PAGE 25). THE THREE DOCUMENTS, AT PB PAGES 13, 14, 15, REFER TO A DATE POST 26.06.2008, SO THAT THE EXPENDITURE DOES NOT PERTAIN TO THESE PROJECTS, AND IS THUS LIABLE TO BE ADDED AS UNEXPLAINED EXPENDITURE U/S. 69C. THE AMOUNTS PER T HE THREE DOCUMENTS AFORESAID TOTALS TO RS. 11,660/-. AN ADDITION TO THIS EXTENT IS THUS CONFIRMED, AND THE BALANCE DIRECTED FOR DELETION. WE DECIDE ACCORDINGLY. ITA NOS.399&400(ASR)/2015(A.Y.2007-08&09-10) HORIZON BUILDERS & DEVELOPERS V. ACIT 9 7. IN THE RESULT, THE ASSESSEE'S APPEALS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 08, 2018 SD/- SD/- (N.K.CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 08.02.2018 /GP/SR.PS COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE M/S. HORIZON BUILDERS & DEVELO PERS (2) THE ACIT, CIRCLE-V, AMRITSAR (3) THE CIT(A)-2, AMRITSAR (4) THE CIT AMRITSAR. (5) THE SR DR, I.T.A.T. TRUE COPY BY ORDER