TaxTMI 
TaxTMI 
2021 (2) TMI 1170
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....to be taxed only in the year/s in which project has completed construction in accordance with the conditions prescribed as per the Revised Guidance Note of 2012 issued by ICAI and thus, the income estimated @25% of on money and taxed in the year of receipt is unjustified and liable to be deleted. 2. The Ld. CIT(A) failed to appreciate that relevant working as per the conditions prescribed in the Revised Guidance Note of 2012 issued by ICAI was duly filed before the Ld. CIT(A) and according to which, the income, if any, quantified in respect of on money could Not be taxed in the relevant year as the conditions and parameters prescribed in Revised Guidance Note of 2012 issued by ICAI for taxing income from project were not satisfied in the relevant year and hence, whatever income quantified from the construction project ought to be taxed in accordance with the Revised Guidance Note of 2012 issued by ICAI and thus, the income estimated from on money and taxed in the year of receipt is unjustified and liable to be deleted. Without prejudice to the above, the Ld. CIT(A) has erred in estimating the income @25% of on money received without appreciating the fact that as p....
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....wandi Cash Sales-Bhiwandi Project 22,50,000 08-04-2015 Sanjay Agrawal Bhiwandi A/ c Cash Sales -Bhiwandi Project 20,00,000 20-04-2015 D. Mangni Bhiwandi Ac Cash Sales-Bhiwandi Project 50,00,000 24-04-2015 D, Mangni Bhiwandi Ac Cash Sales-Bhiwandi 30,00,000 20-05-2015 D. Mangni Bhiwandi Ac Cash Sales-Bhiwandi 50,00,000 Total 1,82,50,000 5. Accordingly, a show cause notice was issued to the assessee as to why the cash received as on money of Rs. 1,82,50,000/- should not be added as income of the assessee as unexplained cash credit under section 68 of the Act. The assessee submitted vide letter dated 29.11.2017 that there was only one project at hand in plot bearing survey No.92/2, 92/4, 92/7(P) near Bhadvad Talab of village Temghar, Taluka Bhiwandi District, Thane which is at initial stage and as such there is no question of assessing the income during the year. The assessee submitted that it has not entered into any sale agreement with any customer nor any registration of sale agreement has taken place and therefore the question of assessing ....
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.....R. prayed before the Bench that in all the above cases it has been held that income has to be assessed in the year of completion of project as per the regular method of accounting when the regular income is assessed to tax and not in the year of receipt of on money. The Ld. A.R., therefore, prayed that the order of Ld. CIT(A) may be set aside on this issue and AO may be directed to assess this income in the year of completion of project when the regular income of the assessee was offered to tax. 7. The Ld. D.R., on the other hand, relied on the order of authorities below: 8. We have heard the rival submissions of both the parties and perused the material on record. The undisputed facts are that the assessee is found to have received on money from the buyer of flats/properties on the basis of documents which have been found during the course of search and the on money received by the assessee in two years A.Y. 2014-15 & 2015-16 of Rs. 32,50,000/- and Rs. 1,50,00,000/- respectively. However, we find that in the assessment the AO has added Rs. 2,15,00,000/- which is a typographical error and correct amount is Rs. 1,50,00,000/-. We have also cross verified this from the order of....
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....nce the assessee was following the project completion method. Once the cash in question has already been assessed to tax, the question of taxing the same assessment year in question AY 2005-06 does not arise." 7.1 In M/s M/s Guruprerana Enterprises (supra) the following questions of law were raised before the Hon'ble Bombay High Court: a) "Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the addition holding that the assessee has not actually received any cash receipts and the declaration made by the partner of the firm was towards total sale receipts and not towards income for the year? b) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the addition holding that the project completion method was applicable on account receipts of Rs. 5 crores even though the assessee had not accounted the receipts in the regular books of accounts? c) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the addition of Rs. 5 crores itself had failed to follow the norms of accounting standard re....
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..... Om Construction ITA No.6234/M/2012 A.Y. 2006-07 & ors. (supra) the co-ordinate bench of the Tribunal held that where the settlement commission has assessed the income at 12% then a different view can not be taken from that one taken by the settlement commission. The operative part is reproduced as under: "6. We have already noticed that the Hon'ble Settlement Commission has accepted the contentions of the assessee that it has incurred expenses outside the books of accounts and further the impounded materials also show that many expenses have not been accounted for. Under these set of facts, the Hon'ble Settlement Commission has accepted the contention of the assessee that only net profit should be estimated on the amounts received outside the books of account. Accordingly, the Hon'ble Settlement Commission has estimated the net profit at 12% of thereon. The assessments of AY 2005-06 and also the year before us, viz., AY 2006-07 have been taken up for scrutiny only on the basis of survey operations and hence the facts prevailing in both the cases are identical in nature. Hence, we do not find it necessary to take a different view from that one taken by the Hon'ble Settlem....