Document Fragment View

Matching Fragments

18. During the appellate proceedings, the learned CIT(A) asked the Assessing Officer to submit a remand report on various additional evidence filed by the assessee. The Assessing Officer, in his remand report dated 16.07.2024, has verified the additional evidence filed by the assessee and submitted the report. The learned CIT(A) after considering the relevant ITA.Nos.262 to 268/Hyd./2025, ITA.No.98/Hyd./2025 And C.O.Nos.9, 10 & 11/Hyd./2025 submissions of the assessee and also taken note of remand report of the Assessing Officer held that, out of Rs.1,12,87,497/- , an amount of Rs.14,24,997/- is available in the books of accounts and payments are made in cheque towards various expenses. The learned CIT(A) further held that, since the expenses have been incurred in violation of provisions of 40A(3) of the Act, directed the Assessing Officer to sustain the addition of Rs.14,24,997/- under section 40A(3) of the Act. In respect of balance amount of Rs.98,62,500/-, the learned CIT(A) confirmed the addition on the ground that, in absence of satisfactory explanation from the assessee with regard to nature of payment referred to in the seized material, the addition made by the Assessing Officer is required to be confirmed in principle. However, deleted the addition on the ground of double taxation and on account of the benefit of telescoping and held that, the amount available to the assessee out of addition sustained towards unaccounted turnover can be telescoped against the unexplained expenditure being part of very same seized material and thus, the Assessing Officer is directed to allow the benefit of telescoping towards addition sustained on this issue.

32. The learned CIT(A) after considering the relevant submissions of the assessee and also taking note of remand report of the Assessing Officer, has scaled down the addition made by the Assessing Officer towards unaccounted turnover ITA.Nos.262 to 268/Hyd./2025, ITA.No.98/Hyd./2025 And C.O.Nos.9, 10 & 11/Hyd./2025 from Rs.36,15,64,800/- to Rs.4,47,46,950/-. The learned CIT(A) held that, the addition made by the Assessing Officer towards unaccounted turnover of Rs. 36,15,64,800/- is unsustainable. The assessee has shown that the sale consideration recorded in the seized document was broadly reflected in the regular books of accounts, consequently, the transactions mentioned in the seized document do not constitute evidence of unaccounted cash receipts. The Assessing Officer relying on these documents in assessment proceedings without corroborative evidence cannot substantiated the addition. The Assessing Officer in the remand report has accepted the version of the appellant. However, the Assessing Officer noted that, on a detailed analysis, it is revealed certain discrepancies between sale consideration recorded in the seized documents and the regular books of accounts. The learned CIT(A) further noted that, out of 64 flats sold during the previous year relevant to assessment year 2013-2014, the appellant recorded higher sale consideration in books than the amount recorded in the seized documents, in 34 cases totalling to Rs.4,37,85,525/-. Conversely, in 30 cases, the appellant recorded lower sale consideration in books than the amount mentioned in the seized document totalling to Rs.4,47,46,950/-. The net difference between sales recorded in the books and those with the seized material for all 64 flats sold during assessment year 2013-2014 is Rs.9,61,435/-. The learned CIT(A) further noted that, although, the net difference is available at Rs.9,61,435/- which could be brought to tax, but the explanation provided by the assessee attributing this difference to customers opting for lower specifications or receiving ITA.Nos.262 to 268/Hyd./2025, ITA.No.98/Hyd./2025 And C.O.Nos.9, 10 & 11/Hyd./2025 discounts, is not supported by any documentary evidence. Further, the appellant did not provide even single evidence to support its claim as to why the amounts mentioned against 30 flats in the books was less by Rs.4,47,46,950/- as compared to that appearing in the seized material. In absence of any evidence to that effect, the claim that, the difference is on account of write-off, discount given to customer etc, cannot be accepted. Thus, rejected the explanation of assessee and sustained the addition to the tune of Rs.4,47,46,950/- towards undisclosed turnover from Aditya Sunshine Project, which is nothing, but sale consideration recorded in the books which is less than the amount mentioned in the seized document. The learned CIT(A) further noted that, since the appellant has sought for telescoping benefit towards various additions made for unexplained expenditure on the basis of seized material, directed the Assessing Officer to allow benefit of telescoping towards additions sustained on account of unaccounted turnover which is also part of very same seized material. In other words, the learned CIT(A) accepted the ground taken by the assessee for telescoping addition of unaccounted income against addition of unaccounted expenditure made by the Assessing Officer.

33

ITA.Nos.262 to 268/Hyd./2025, ITA.No.98/Hyd./2025 And C.O.Nos.9, 10 & 11/Hyd./2025

36. Shri Narender Kumar Naik, learned CIT-DR along with Dr. Sachin Kumar, Sr. AR for the Revenue, on the other hand, supporting the Order of the learned CIT(A) submitted that, the addition made by the Assessing Officer towards unaccounted turnover is on the basis of document found during the course of search in the case of Sri B. Venkata Ramireddy, Finance Manager of the Assessee Group. In the statement recorded under section 132(4) of the Act, Sri B. Venkata Ramireddy stated that, the document found and seized from his residence contains details of sales pertains to Aditya Sunshine Project. Further, the document contains complete details of sales including name of the buyer, extent of Flat, total consideration, amount received etc. The assessee had also furnished reconciliation and in few cases, there is a short of amount in the books of account, when compared to the seized material. Although, in few cases the amount recorded in the books of accounts is more, when compared to the seized material, but the assessee could not explain the amount recorded in the books of accounts in respect of 30 Flats, where there is a difference, when compared to seized material. The learned CIT(A) after considering the relevant facts and also considering the remand report of the Assessing Officer, has rightly sustained addition towards amount recorded in the books of account in respect of 30 Flats, where there is a clear difference of Rs.4,47,46,950/-. Therefore, he submitted that, the addition made by the Assessing Officer and sustained by the learned CIT(A) should be upheld. In this regard, the Learned DR relied upon the decision of Hon'ble High Court of Madras in the case of B.Kishore Kumar vs., DCIT [2014] 52 taxmann.com 449 ITA.Nos.262 to 268/Hyd./2025, ITA.No.98/Hyd./2025 And C.O.Nos.9, 10 & 11/Hyd./2025 (Mad.) and the same has been approved by the Hon'ble Supreme Court by dismissing the SLP reported in (2015) 234 Taxman 771 (SC). The learned CIT-DR further, referring to grounds of appeal of the Revenue submitted that, although, the learned CIT(A) has sustained the addition towards unaccounted turnover in respect of 30 Flats for Rs.4,47,46,950/-, but, allowed the benefit of telescoping on addition made towards unexplained expenditure on the basis of seized material, even though, the principles of telescoping must be considered, only in a case, where the income and expenditure is part of very same document. Since the learned CIT(A) has allowed telescoping benefit towards addition sustained for unaccounted turnover against the addition made towards unexplained expenditure, which is nothing to do with the document relied upon by the Assessing Officer, the benefit allowed by the CIT(A) is contrary to the settled position of law and, therefore, he submitted that, the findings recorded by the learned CIT(A) on this issue should be deleted.

41. Coming back to the grounds of appeal of the Revenue on the issue of telescoping benefit allowed by the learned CIT(A). The Revenue contested the findings of the learned CIT(A) on the ground that, the learned CIT(A) has wrongly allowed the benefit of ITA.Nos.262 to 268/Hyd./2025, ITA.No.98/Hyd./2025 And C.O.Nos.9, 10 & 11/Hyd./2025 telescoping towards addition made on account of unaccounted turnover against the addition made on account of unexplained expenditure, even though, the basis for the said addition is altogether different. In our considered view, the Assessing Officer has made addition towards unaccounted turnover and unaccounted expenditure on the basis of material found during the course of search, which clearly shows the transactions of the assessee on its business recorded in the said seized material. Since the addition made towards income and expenditure is part of very same seized material found as a result of search, in our considered view, any amount available out of addition made towards income can be allowed to be set-off or telescoped against the addition made towards expenditure or investment. Therefore, in our considered view, there is no error in the findings recorded by the learned CIT(A) to allow the benefit of telescoping. Thus, we are inclined to uphold the Order the learned CIT(A) on this issue and reject the ground taken by the Revenue.