DCIT Vs F A Construction (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, disposed of three appeals filed by the Revenue against separate orders of the Commissioner of Income-tax (Appeals) [CIT(A)] for Assessment Years 2014–15 to 2016–17. As the issues involved were identical, the Tribunal passed a consolidated order, primarily examining the facts of Assessment Year 2014–15.
The assessee, a partnership firm engaged in building and construction activities, filed its return declaring income, which was later assessed under Section 143(3). Subsequently, based on information received from the department’s internal portal indicating substantial cash withdrawals from bank accounts, the Assessing Officer (AO) reopened the assessment under Section 147 by issuing notice under Section 148.
During reassessment proceedings, the AO sought details regarding purchases, expenses, labour payments, and statutory compliances. Due to non-compliance by the assessee at that stage, the AO completed the assessment under Section 144. The AO observed that the assessee had withdrawn large amounts of cash from disclosed bank accounts but failed to substantiate their utilisation. Consequently, the AO treated the cash withdrawals as unexplained money under Section 69A and added the amount to income. Additionally, due to lack of supporting documents during assessment proceedings, the AO disallowed 5% of total expenditure on an ad hoc basis.
