TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 656
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....d "Sion O2" and the issue involved relating to on-money received in the above said project after a search operation conducted under section 132 of the Income Tax Act, 1961 (for short "the Act") was conducted in the Ahuja group of cases on 25th June 2015, and incriminating data in the form of loose papers and digital form relating to the tax evasion were found and seized. The premises of Shri Sunil Chowdhary, driver of Shri Jagdish Ahuja (promoter of the group) were also searched and parallel books of account of the Ahuja group were found in his premises. The analysis of the data found was confronted to the promoter Mr. Jagdish Ahuja, who had admitted to receiving on-money in various projects undertaken by the group. Accordingly, notice under section 153C of the Act was issued to the assessee on the basis of the data found during the search. Mr. Jagdish Ahuja, promoter of the group has clearly admitted to receiving on-money which was a part of the parallel books of account maintained by him. On the basis of the statement and the corroborative evidences found during the search, the Assessing Officer issued a show cause notice to the assessee proposing to make an addition of the on-mo....
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....A) observed that it is accepted and admitted facts that assessee has received on money in the projects undertaken by it. However, he observed that the assessee group companies had also offered the on money received before settlement commission where five entities of the group made an application. He observed that this issue was present in three concerns of the Ahuja a group which approached the Settlement Commission and had offered 12% of the on-money as income and the same was accepted by the Settlement Commission. He observed that the contention of the assessee that the money of the entire group including that of the assessee was offered before the Settlement Commission, which was evident from the record submitted. However, he rejected the above contention and observed that the income of the assessee was never offered before Settlement Commission and observed that the income has to be taxed in the hands of the right person and not any other person. Further, the assessee submitted before the learned CIT(A) that the offer @12% of money received was accepted by Settlement Commission, the same has to be applied in the case of the assessee also. The learned CIT(A) rejected this submis....
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....Assessing Officer also refer to this income as on money/Cash sales in the assessment order but has ultimately brought to tax as unexplained cash credit under section 68 of the Act. He referred the matter to the Assessing Officer vide letter dated 2nd January 2019, directing him to verify the seized material and confirm whether the contention of the assessee i.e., treatment of this income as on-money and, therefore, as business receipt is correct or not. In response, the Assessing Officer, vide his report dated 10th January 2019, by reference to the list of parties submitted by the assessee from whom on-money is received and submitted that the PAN is not mentioned in some cases and no letters from the said persons was filed confirming that they had given on money to the assessee. Since the assessee had failed to satisfactorily explained the nature and source of credits with evidences, the Assessing Officer stated that the amounts were correctly added under section 68 and not as business receipts. The learned CIT(A) observed that the Assessing Officer's report is completely silent on the main issue i.e., the status of these receipts as per the seized material. He observed that there ....
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....al in assessee's own Group company viz., Sai Ashray Developers Pvt. Ltd. v/s DCIT, ITA no.2967/Mum./2019, etc., order dated 11th June 2017, vide which the issue for our consideration is squarely covered in favour of the assessee and against the Revenue. For the sake of clarity, the operating para of the issue decided by the Co-ordinate Bench cited supra, is reproduced below:- "13. Considered the rival submissions and material on record. We noted that in these appeals the issue of on money received by the assessee is proved beyond doubt from the records found during search proceedings and subsequent acceptance by the key personal of the Ahuja group. The issue before us is only consideration of the above said on money to be taxed under section 68 of the Act or Based on the findings of the learned CIT(A) that receipt of on money has to be taxed only on net income and estimated net income @25% of the gross on money received. We notice from the submissions of the learned Counsel for the assessee that the above said issues are already considered by the Co-ordinate Bench in Tulip Land And Developers (supra) and Bhalchandra Trading P. Ltd. (supra) and decided the issue in favour of the a....
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....hat the assessee had incurred certain business expenses out of such on-money which are kept outside the books of accounts. Hence, it will be just and fair that only the profit element embedded on any such undisclosed transaction could be brought to tax on an estimated basis. The assessee had already pleaded that on-money transactions were offered by the assessee's group concerns @12% of on-money receipts before the Hon'ble Income Tax Settlement Commission and the same has been accepted by the Settlement Commission. Hence, the data and information was indeed available with the ld. CIT(A) to have some rational basis to make profit estimation in the hands of the assessee herein by following 12% thereof from the order of Hon'ble Income Tax Settlement Commission. Accordingly, we direct the ld. AO to add only 12% of onmoney receipts as undisclosed income of the assessee for the year under consideration. Accordingly, the ground No.1 & 2 raised by the assessee is partly allowed. 10. With regard to ground No. 2 in assessee's appeal i.e. year of taxability. The Co-ordinate Bench has already considered in the assessee's group case in M/s Tulip Land & Developers P. Ltd. (ITA No. 2980/M/2019 &....
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....#39;ble Bombay High Court was the following: "Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal in law, was right in holding that receipts of Rs. 3,46,250/- recorded in the documents seized during the course of search were reflected in the books of accounts and could be taxed only in the year in which the project was completed?" The Hon'ble High Court held that: "The finding of fact recorded by the Tribunal is that the receipts in question had direct nexus with the project of the assessee and that the said cash receipts have been offered to tax in the AY 2008-09, since 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 f....