Tribunal confirms 12% profit estimate on on-money receipts, rejects 17%. Revenue appeal dismissed, assessee's objection upheld.

The Tribunal upheld the Ld CIT(A)'s decision to estimate the profit at 12% on on-money receipts, correcting the earlier mention of 17%. The revenue's appeal against the deletion of the addition was dismissed, as the Tribunal found no reason to interfere with the Ld CIT(A)'s order. The cross objection filed by the assessee in support of the deletion of the addition was also upheld. Consequently, both the revenue's appeal and the assessee's cross objection were dismissed, affirming the Ld CIT(A)'s decision for the assessment year 2006-07.

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Issues Involved:
- Appeal against deletion of addition for on-money receipt
- Cross objection supporting deletion of addition

Analysis:
1. The appeal by the revenue and the cross objection by the assessee were directed against the order of the Ld CIT(A) pertaining to the assessment year 2006-07. The revenue contested the decision of the Ld CIT(A) in deleting the addition related to on-money receipts amounting to Rs. 1,40,00,000, opting instead to estimate the net profit. On the other hand, the assessee supported the Ld CIT(A)'s decision in the cross objection.

2. The assessee, a member of the Gangar Group engaged in the business of builders and developers, was found to be receiving money outside the books of account during survey operations conducted at the business premises. The assessing officer determined the on-money receipts at Rs. 1.40 crores and treated it as the assessee's income. Subsequently, the assessee and other group concerns filed a settlement petition before the Settlement Commission, which accepted the contention that only net profit should be estimated on amounts received outside the books of account, setting it at 12% for the assessment year 2005-06.

3. The Ld CIT(A), in the appeal challenging the assessment order for AY 2006-07, considered the Settlement Commission's order and concluded that only the net profit calculated at 12% on the on-money receipts should be assessed, contrary to the 17% mentioned in the order. The revenue disputed this decision, leading to the current appeal.

4. The Tribunal observed that the Settlement Commission had acknowledged the expenses incurred outside the books of accounts by the assessee and upheld the estimation of net profit at 12% for AY 2005-06. Given the identical nature of facts in both AY 2005-06 and 2006-07, the Tribunal concurred with the Settlement Commission's approach and upheld the Ld CIT(A)'s decision to estimate the profit at 12%, correcting the earlier mention of 17%.

5. The Tribunal dismissed the revenue's appeal, finding no reason to interfere with the Ld CIT(A)'s order. The cross objection filed by the assessee was also upheld in support of the Ld CIT(A)'s decision. Consequently, both the appeal of the revenue and the cross objection of the assessee were dismissed, affirming the Ld CIT(A)'s order.

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