Hyderabad Bench of Income Tax Appellate Tribunal ( ITAT ), directed readjudication on accounts of addition made under excess receipts from contracts works. The bench during the adjudication observed that the Revenue authorities have failed to examine the details of the work contracts awarded and the payment made by the Government which are relatable to various stages of work contract. The assessee, LEPL Projects Limited e-filed its return of income for the assessment year under consideration on 30.10.2017 admitting loss of Rs.52,14,82,099/.

Subsequently, the case of the assessee was selected for scrutiny .Afterthat the AO completed the assessment by making additionson account of  excess receipts from contract works. Aggrieved by the order of Assessing Officer, assessee has filed the appeal before the CIT(A) and the CIT(A) had deleted the addition.Therefore the revenue filed another appeal before the tribunal Assesee representative, K.C. Devdas submitted that the once the Assessing Officer in the remand report had satisfied himself with the identity, creditworthiness and genuineness of M/s. MIEL, then the ld.CIT(A) has rightly dropped the proceedings under Section 68 of the Income Tax Act.

Therefore Once the assessee has shown the entire contract receipts in the books of accounts and had suffered the taxes thereon, then there was no question of making the alternative addition under Section  69C of the Income Tax Act. Dr.K.J. Rao,the Department representative, argued that the assessee company is never able to explain the reasons for earning huge profit  in carrying out construction work wherein he incurred expenditure of Rs.14,65,65,865/- only. In spite of giving opportunities, the assessee has not produced any evidence explaining the strange situation.

Hence, the excess receipt has to be treated as unaccounted cash credit under Section 68 of the IT Act in the books of accounts of the assessee. The ITAT bench observed that identity of MEIL is established however, neither the genuineness nor the creditworthiness has been examined and proved by the assessee before the lower authorities. Accordingly Revenue authorities have failed to examine the details of the work contracts awarded and the payment made by the Government which are relatable to various stages of work contract. Therefore the bench  remit back the matter to the file of Assessing Officer for fresh examination Therefore  the two member bench of Laliet Kumar, ( Judicial Member ) and R.K. Panda, ( Vice President ) directed readjudication on accounts addition made under Excess Receipts from Contract Works. To Read the full text of the Order CLICK HERE