TaxTMI 
TaxTMI 
2022 (8) TMI 1037
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....agraph no.5 of the present Tax Appeal. The same is allowed in terms of the draft. To be carried out forthwith. 3. The Revenue has preferred this Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short "the Act, 1961") being aggrieved by the judgment and order dated 13th February, 2020 passed by the Income Tax Appellate Tribunal, Surat (for short "the Tribunal") in ITA No.1196/AHD/2013 for A.Y. 2009-2010. 4. Following substantial questions of law are proposed for consideration in this Tax Appeal : "I. Whether the Hon'ble ITAT was right in the facts of the case in considering only 6% of the money receipts as income? II. Whether the Hon'ble ITAT was correct in law and on facts in considering eligibility of assessee for deduc....
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....Rs.25,94,55,680/- and expenditure of Rs.25,71,84,057/- showing gross profit of Rs.22,71,622/- after tax. The Assessing Officer, therefore, observed that the assessee claimed additional expenditure of Rs.4,29,02,369/- to cover up additional amount of construction work of Rs.4,29,02,369/- credited in the revised P & L account. The Assessing Officer, therefore, rejected the book result by invoking the provisions of Section 145(3) of the Act, 1961 and further observed that total receipt for the year under consideration as per impounded material was of Rs.10,39,86,000/-, whereas, in the return of income, the assessee had shown gross receipt of Rs.5,67,83,632/-. Therefore, the Assessing Officer made an addition of Rs.4,72,02,368/- as undisclosed ....
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.... that the entire receipt could not be added to the total income of the assessee and only profit element embedded in the said receipt would be added to the total income relying upon various decisions, and accordingly, the Tribunal estimated the profit element @ 6% of the net profit on total unrecorded receipts of Rs.4,72,02,368/-. 5.5 In such circumstances, the Revenue has filed this appeal being aggrieved by the impugned order of the Tribunal so far it relates to applying the rate of 6% on the unrecorded amount received by the assessee as income. 6. Learned advocate for the appellant submitted that it is not in dispute that there was unrecorded receipts of Rs.4,72,02,368/- detected during the course of survey on account of suppression of ....
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....s justified in upholding the contention of the assessee that considering the fact that entire money receipts cannot be taxed in entirety and only the profit embedded therein and such receipts is to be considered for arriving at correct, true and real income to be taxed under the provisions of the Act, 1961. 8. The Tribunal to arrive at such conclusion has relied upon the decision of this Court in case of DCIT Vs. Panna Corporation reported in [2012] 74 DTR 89, wherein, it is held that, "it has been consistently held by this court and some other courts have been following the principle that even upon detection of on-money receipt or unaccounted cash receipt, what can be brought to tax is the profit embedded in such receipts and not the enti....
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....eduction of Section 80IB(10) of the Act, hence, there may not be any intention to disclose the lower rate of profit. Considering these facts, and taking into account net profit in construction business, it would be reasonable to estimate 6% of net profit on total on-money receipts of Rs.4,72,02,368. Accordingly, the AO is directed to tax net profit @ 6% on total on-money receipts of Rs.4,72,02,368. In view of these facts and circumstances, the Ground No.4 to 6 of appeal are partly allowed." 10. Thus, the Tribunal, after following the decision of this Court and after considering that the assessee had shown net profit at 4.55% for the assessment year under consideration and 4.59% for A.Y. 2010-11 in the books of account and considering the....