DCIT Vs F A Construction (ITAT Mumbai)
Cash Withdrawals from Disclosed Bank Accounts Not Unexplained: ITAT Mumbai Upholds Deletion of ₹35.87 Cr Addition u/s 69A in Civil Contractor’s Case
The Mumbai Bench of the ITAT dismissed the Revenue’s appeals for AYs 2014-15 to 2016-17 and upheld the orders of the CIT(A) deleting a major addition of ₹35.87 crore made under section 69A and an ad-hoc disallowance of 5% expenditure (₹12.09 crore) in the case of F A Construction, a civil contractor executing government and semi-government projects.
The Assessing Officer had reopened the assessment based on information from the INSIGHT portal regarding large cash withdrawals from disclosed bank accounts and, due to non-compliance during reassessment, completed the assessment ex parte under section 144, treating the withdrawals as unexplained money and disallowing 5% of total expenses.
Before the CIT(A), the assessee furnished voluminous documentary evidence during remand proceedings, including bank statements, main and site-wise petty cash books, utilisation summaries, vouchers, creditor ledgers and RA bills for government contracts. The AO, in the remand report, acknowledged examination of these records and did not point out any adverse material or discrepancy. The CIT(A) therefore deleted both the section 69A addition and the ad-hoc disallowance.
