IN INCOME TAX APPELLATE TRIBUNAL , BENCH, CHENNAI, BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER . I.T. A. No. 1010 Mds 2014 ( Assessm ent Year: 2005-06) M s. Integrated Housing Developers Vs Assistant Commissioner of Ltd. Income Tax, 3rd floor, Company Circle-I(2), 12, Sarojini Street, T.Nagar, Coimbatore. Chennai. PAN: AABCI4387 E ( Appellant) ( Respondent) Appellant by : Ms. Subadra Marimuthu, Advocate Respondent by : Mr. Shiva Srinivas, JCIT Da t e of h e ar in g : 13th July, 2016 D at e of Pr on oun c em ent : 15th September, 2016 ORDER Per A. Mohan Alankamony, AM:- This appeal is filed by assessee aggrieved by order of learned Commissioner of Income Tax (Appeals)- I, Coimbatore dated 13.02.2014 in ITA No.60 12 -13 passed under section 143(3) r.w.s. 147 & 250(6) of Act. 2. assessee has raised several elaborate grounds, however cruxes of issues are as follows:- i) learned Commissioner of Income Tax (Appeals) has erred in confirming order of learned Assessing Officer who had 2 ITA No.1010 Mds 2014 determined net income of assessee based on unsigned profit & loss account. ii) learned Commissioner of Income Tax (Appeals) has erred in confirming addition of Rs.15,68,958 - made by learned Assessing Officer under section 269SS T being cash loan accepted paid. iii) learned Commissioner of Income Tax (Appeals) has erred in confirming disallowance made by learned Assessing Officer under section 40A(3) of Act being cash payments exceeding Rs.20,000 - 3. Brief facts of case are that assessee is company engaged in business of housing developers filed its return of income for assessment year 2005-06 on 13.03.2006 declaring loss of Rs.2,56,830 -. search was conducted under section 132 of Act by income-tax department at Trivandrum in premises of M s. Airtech Group consequent to which survey was carried out in premises of assessee on 21.02.2006 and during course of survey several documents were impounded. On perusal of books and return filed by assessee learned Assessing Officer noticed that assessee had not declared its actual income and therefore he believed that income had escaped assessment and hence notice under 3 ITA No.1010 Mds 2014 section 148 was issued to assessee on 18.3.2011.Thereafter assessment was completed under section 143(3) r.w.s 147 of Act on 26.07.2012 making addition of Rs. 71,58,452 - which was not disclosed in return filed by assessee and disallowance of Rs.34,67,708 - under section 40A(3) of Act towards cash payment in excess of Rs.20,000 - and disallowance of Rs. 15,68,958 - under section 269SS of Act towards loan received and given by cash. 4. On appeal, learned Commissioner of Income Tax (Appeals) confirmed order of learned Assessing Officer agreeing with order of learned Assessing Officer, against which assessee is in appeal before us. Ground No.1 : Determination of net income of Rs.71,58,452 - based on unsigned profit & loss account: 5.1 From facts of case, it is revealed that assessee is assessed to tax for its income of Rs. 71,58,452 - based on rough profit & loss account impounded during course of survey ( marked- VVI.55) while as assessee 4 ITA No.1010 Mds 2014 had filed its return of income declaring net loss of Rs.2,56,833 -. It was explained by assessee that, assessee had handed over piece of land at Trivandrum for joint development to M s. Airtech group entitling them for 90% share of profit. It was further explained that, M s.Airtech group was to maintain accounts for all receipts and payments and share of profit was to be transferred to assessee only on completion of entire project. However, project was stopped in year 2007 after date of survey which took plave on 21.02.2006. It appears that learned Assessing Officer had relied on rough profit & loss account impounded during course of survey for arriving at profit of assessee because loan amount received by assessee and sale consideration received from sale of villas were diverted to Managing Director s account and portion of same was also expended towards construction expenses. 5.2 On appeal, learned Commissioner of Income Tax (Appeals) confirmed order of learned Assessing 5 ITA No.1010 Mds 2014 Officer based on findings of learned Assessing Officer and by agreeing with his view. 5.3 Before us, learned Authorized Representative reiterated its submissions made before Revenue authorities by stating as follows:- i) entire addition was made based on unsigned balance sheet of assessee found during course of survey. ii) project promoted by assessee through M s. Airtech Group of companies was not successful. iii) M s.Airtech group was in fact actually promoting project while as assessee had given only possession of land with condition that 90% of profit from project should be transferred to assessee after completion of project. iv) entire project had failed and assessee has not realized any profit out of transaction. With above submissions, learned Authorized Representative pleaded that addition made in hands of assessee may be deleted. 6 ITA No.1010 Mds 2014 5.4 learned Departmental Representative on other hand heavily relied on orders of Revenue and requested for sustaining same. 5.5 We have heard rival submissions and carefully perused materials available on record. From facts of case, it appears that entire addition of Rs.71,58,452 - is made only on basis of rough profit & loss account impounded during course of survey. learned Assessing Officer has not brought out any other materials to show that assessee has really enjoyed any profit out of transaction. Further, there is no mention about assessment of M s.Airtech group whom assessee has claimed to be executioner of project. From overall facts of case, we are of considered view that Revenue has not brought out any tangible materials to make addition in hands of assessee. However, in interest of justice, we remit back matter to file of learned Assessing Officer for considering issue afresh and also in light of assessment made in case of M s.Airtech group. It is ordered accordingly. 7 ITA No.1010 Mds 2014 6. Since facts with respect to cash payment made in excess of Rs.20,000 - and loan obtained and given in cash whereby learned Assessing Officer has invoked provisions of section 40A(3) and section 269SS T of Act respectively is not vividly brought out in orders of Revenue, we remit these issues also back to file of learned Assessing Officer for fresh consideration. 7. In result, appeal of assessee is allowed for statistical purposes. Order pronounced in open court on 15th September, 2016 Sd - Sd -(Duvvuru RL Reddy ) (A. Mohan Alankamony) Judicial Member Accountant Member Chennai, Dated 15th September, 2016 somu Copy to: 1. Appellant 2. Respondent 3. ( ) CIT(A) 4. CIT 5. DR 6. GF M/s. Integrated Housing Developers Ltd. v. Assistant Commissioner of Income-tax, Company Circle-I(2), Coimbatore