Tribunal directs lower undisclosed income addition rate for construction firm based on on-money nature.

The Tribunal partially allowed the appeal by directing the Assessing Officer to estimate the addition to undisclosed income at 15% of the on-money receipts, aligning with the precedent set by the Jurisdictional High Court. This decision contrasts with the initial addition made by the AO, emphasizing a lower rate based on the nature of on-money received, ultimately resulting in a favorable outcome for the appellant firm engaged in construction activities.

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Issues Involved:
The appeal challenges the order passed by the Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad, arising from the assessment under Section 143(3) of the Income Tax Act, 1961 for Assessment Year 2020-21.

Issue 1: Undisclosed Income Assessment
The appellant, a firm engaged in construction, declared a loss in its income tax return. Subsequently, a survey under section 133A revealed on-money receipts and undisclosed expenses. The Assessing Officer (AO) made an addition to the entire undisclosed income, which was later restricted on appeal to 20% of the net profit of the undisclosed receipt. The appellant argued for a lower rate based on on-money received. The Hon'ble Jurisdictional High Court had previously restricted additions to 15% of on-money receipts in a similar case. The Tribunal, following this precedent, directed the AO to estimate the addition at 15% of the on-money receipt of Rs. 1,32,70,000, thereby partially allowing the appeal.

Conclusion:
The Tribunal's decision in this case aligns with the precedent set by the Hon'ble Jurisdictional High Court, emphasizing the application of a 15% rate for additions related to on-money receipts in similar circumstances.

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