TaxTMI 
TaxTMI 
2020 (1) TMI 475
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....ned CIT(A) erred in deleting the addition of Rs. 5,97,63,776/- made on account of on-money receipts by the assessee on the basis of the statements recorded on oath u/s 131 of the Act of the buyers of the residential units. 2. The Ld. CIT(A) erred in accepting the contention of the assessee inasmuch as the statement of a few buyers of the residential units cannot be extrapolated for considering the treatment of on-money receipts by the assessee, contrary to the fact that the assessee company has not given the working of unaccounted money disclosed consequent to the Survey, which has necessitated the working of actual on money receipts. 2.1 The Ld. CIT(A) failed in not appreciating the ratio laid down in case of Amal Kumar Chakraborty v CIT 78 TAXMAN 302 (CAL.), wherein the Hon'ble Court have specifically expressed that the dictum falsus in uno falsus in omnibus though applicable in criminal law, is a sound principle to apply in taxation when the matter is one of finding of fact on the basis of statements of a witness and their judicial evaluation. 4. Since, the above ground of appeal relates to deletion the addition of Rs. 5,97,63,776/- made on account of on-money receip....
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....eved, the assessee filed an appeal before CIT(A). Wherein the assessee has made detailed submissions dated 07-12- 2018 and submission dated 21-12-2015, which has been reproduced by the Ld. CIT (A) in his appellate order. It was submitted that during post-search-survey proceedings, summons were issued to 22 person whose statement was recorded under section 131 of the Act wherein they have produced evidence and admitted on-money payment made by them to the assessee. Similarly in his statement under section 131 of the Act, Shri Rameshbhai V. Savani, Managing Director of the company, who in reply to question No.9 of his statement made disclosure of Rs. 12 crore as additional income for assessment year 2010-11 after considering the diaries, statement of the booking parties, and other details as found from the office premises of the Garden City Project. This disclosure was made to cover all discrepancies and after such disclosures made by him; no any further enquiries were conducted by the AO. It was further submitted that huge addition of Rs. 5.97 crore was made without identifying any unaccounted asset or impounded material found during the course of survey, which necessitated such add....
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....7,63,776/- cannot be treated as profit or income of the appellant. In view of decisions of many Hon'ble Courts only profit embedded in such receipts of Rs. 17,97,63,776- being on-money can be taxed. Even if the profit @ 15% of this amount of Rs. 17,97,63,776- is considered for taxation, then also 15% of this amount would come to Rs. 2,6,f64,566/-. However, the appellant has disclosed the income of Rs. 12,00,00,000/- for taxation which is much more than this net profit of Rs. 2,68,64,566/- which has been worked out and considered @ 15% on entire on-money of Rs. 17,97,63,776/- and which can be said to be the net profit embedded in such on ACIT, money of Rs. 17,97,63,776/-. Thus, in view of these facts also no addition of Rs. 5,97,63,776/- can be made by the AO to the total income of the appellant by working out the total on-money receipt at Rs. 17,97,63,776/- as the unaccounted income of Rs. 12,00,00,000/- as disclosed by the appellant is much more than this embedded profit of Rs.. 2,69,64,566/- as worked out above. In view of these facts, the addition of Rs. 5,97,63,776/- as made by the AO to the total income of the appellant is not sustainable and therefore the same is deleted.....
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....ntly supported the order of the AO and requested that same may be upheld. 8. Per contra, the ld. counsel submitted that the assessee has already made disclosure of Rs. 12 crore to buy peace and avoid unnecessary litigation and harassment to members who have booked bungalows in the said project. The AO has extrapolated the result of on-money receipt from the 17 parties in respect of remaining 415 unit. Thus, the statement of merely 4%, of the member have been applied for making addition towards the entire project based on extrapolation theory. This theory of extrapolation was applied to balance 96% units is totally injudicious and untenable because even during course of survey no materials were found necessitating the further calculation of on-money by the AO. It was further submitted that the AO was specifically requested to supply the evidences/materials impounded at the time of survey, if he intend to make addition in excess of the disclosure of Rs. 12 cores. However, the AO neither has supplied any such material to assessee nor has made reference of the same in the entire assessment order. The ld. counsel further supporting the order of the ld. CIT(A) submitted that the CIT(A)....
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....cts also no addition of Rs. 5,97,63,776/- can be made by the AO to the total income of the appellant by working out the total on-money receipt at Rs. 17,97,63,776/- as the unaccounted income of Rs. 12,00,00,000/- as disclosed by the appellant is much more than this embedded profit of Rs. 2,69,64,566/- as worked out above. In view of these facts, the addition of Rs. 5,97,63,776/- as made by the AO to the total income of the appellant was not found sustainable and therefore the same was deleted. We are of the considered opinion that Ld. CIT (A) has taking a judicial view after taking into consideration of various decision of Hon'ble Gujarat High Court and other High Court as well as tribunal. We find that the Hon'ble Gujarat High Court in the case of CIT V. Ashland Corporation 133 ITR 55 and in CIT v. Motilal C Patel & Company 173 ITR 666 held that it is settled law that no addition no addition can be made purely based on statement recorded during survey. 10. Further, the Hon'ble Gujarat High Court in the case of DCIT V. Panna Corporation [Tax Appeal No. 323 and 325 of 200 dated 16.06.2012] 74 DTR 89 held that it has been consistently held by this court and some other courts have b....