TaxTMI 
TaxTMI 
2024 (3) TMI 1065
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....The learned assessing officer in ITA number 3110/M/2023 has raised following grounds of appeal: - "1. Whether, on the facts and in the circumstances of the case the Learned CIT (A) erred in deleting additions of Rs. 8,28,903/- on account of unexplained opening balance of cash by stating that the same is out of unaccounted business receipts disclosed by the assessee when the assessee did not submit such details and failed to substantiate its claims with any supporting documents during the assessment proceedings? 2. Whether, on the facts and in the circumstances of the case the Ld. CIT(A) erred in deleting additions of Rs. 73,84,000/- and Rs. 50,00,000/- on account of internal transfer of cash when the assessee had failed to substantiate its claim stating that the same was accepted in AY 2018-19 without appreciating the fact that in the AY 2018-19, the assessee had submitted documentary evidence to prove the same whereas for the year under consideration the assessee did not submit such details thereby the Ld. CIT(A) ignored these facts and adjudicated the ground in favour of the assessee without any supporting documents produced by the assessee to substantiate its c....
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.... word cash in the seized documents ignoring the fact that the assessee has not proved that the payments have been made through cheques? 9. Whether, on the facts and in the circumstances of the case the Ld. CIT(A) erred in accepting the contention of the assessee that the amount of Rs. 46.54 crores mentioned in seized document, was paid to the MIDC through cheque in respect of 281 plots whereas the total value of the 281 plots works | out to Rs. 60.12 crores. The Ld. CIT(A) ignored the fact that the seized documents do not show that the payments were made by cheques and the amounts mentioned in the seized document do not match with the value of plot as per assessee's submission. Therefore, the transaction mentioned in seized document represent cash receipts by the assessee? 10. Whether on the facts and in the circumstances of the case the Ld. CIT(A) erred in allowing the claim of expenses @ 30% out of unaccounted business receipts offered without appreciating the fact that the assessee has not submitted any documentary evidences that 30% of the expenses were incurred for the earning of such income and no evidence was submitted by the assessee regarding the clai....
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....of order) 3.1) On the facts of the case, in law and under the circumstances, the Learned CIT (Appeal)-Central erred in confirming addition of Rs. 51,32,900/- (Rs. 26,72,900/- Rs. 3,80,000/- + Rs. 20,80,000/-) as alleged unaccounted business Income from three land transactions on the basis of the seized documents without considering the detailed submission made by the assessee that no transactions are carried out by them as it did not materialized. 3.2) On the facts of the case, in law and under the circumstances, the Learned CIT (Appeal)-Central erred in confirming the addition of Rs. 51,32,900/- by presuming that assessee has earned alleged unaccounted business income out of said three land transactions without any sustainable basis or any other documentary proof or other corroborative evidence to that effect. 3.3) On the facts of the case, in law and under the circumstances, the Learned CIT (Appeal)-Central erred in confirming the addition in respect of alleged receipts from the said three land transactions merely on the basis of WhatsApp Chat, which is at the most secondary evidence and without any independent verification made to that effect by the Ld....
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....he act on 31/12/2022 determining the total income of the assessee at Rs. 711,957,005/-. The learned assessing officer made several additions to the total income of the assessee. The additions were in nature unaccounted business income and unaccounted expenditure based on documents seized during search. The LD AO made addition of unaccounted business receipt of Rs 56.43 Cr and addition of unaccounted unexplained expenditure of Rs 5.48 Cr. 08. Assessee, aggrieved with assessment order preferred an appeal, which was decided on 2/6/2023 deleting the additions partly, and therefore both the parties are in appeal before us. 09. Ld. AR filed a three-volume paper book, chart of the issues that was considered while deciding cross appeals. 010. First, we deal with the appeal filed by the learned AO, which has almost ten effective grounds. 011. The first ground of appeal is with respect to the addition of Rs. 8,28,903/- deleted by the learned CIT - A . Ld. AO made it on account of unexplained opening balance of cash by stating that the same is out of unaccounted business receipts disclosed by the assessee when the assessee did not submit such details and failed to substantiate it ....
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.... of internal transfers of Rs 73,84,000/- ; (ii) consultancy fees received as income from plot and cluster consultancy. It further stated that out of the above sum Rs. 5,202,500/- and Rs. 2,450,000/- has been declared as consultancy income of the assessee for assessment year 2021 - 22 and 2022 - 23 respectively. Therefore the assessee was issued further questionnaire to explain as to why unaccounted receipts pertaining to the year FY 20-21 under consideration of Rs. 12,586,500/- [ Comprising of Rs 42,27500/- MIDC Plot consultancy income + Cluster Consultancy Income + Rs 73,84,000/- branch internal transfer entries] and opening balance of Rs. 828,903 should not be considered as unaccounted business income and a further sum of Rs 130,30,419 [ being various expenditure pertaining to F Y 20-21 in that sheet] not be considered as unexplained expenditure. 015. Assessee filed detailed letter dated 09/09/2022 and 30/12/2022 where in it is submitted that :- i. MIDC plot consultancy income of Rs. 42,27,500 and cluster consultancy income of Rs. 975,000 amounting to Rs. 52,02,500 has already been offered as income under section 132(4) of the act impugned assessment year. ii....
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....also added. Thus, the total addition of Rs. 13,415,403/- was made to the total income of the assessee as unaccounted business income. Further from the said document, a sum of Rs. 13,030,409/- is also considered as an unexplained expenditure and addition under section 69C of the act was made. 017. Thus, the learned AO made the addition for the year of (1) of sum of Rs. 12,586,500/- being the receipt (2) expenditure of Rs. 13,030,409 under section 69C of the act and (3) addition of Rs. 828,903/- opening balance therein. 018. These additions were challenged before the learned CIT - A as per ground number 7 before him. The learned CIT - A appreciated from the seized documents; it is inferred that there is an opening balance for assessment year 2021 - 22 (financial year 2020 - 21) of Rs. 828,903/-. The total receipts are shown of Rs. 13,415,403 for financial year 2020 - 21 and Rs. 1,40,68,904 financial years 2021 - 22 totalling to Rs. 23,055,400. Out of the total receipts the MIDC plot consultancy charges of Rs. 4,227,500 for financial year 2020 - 21 and Rs. 2,250,000 for financial year 2021 - 22 totalling to Rs. 6,477,500/- and further cluster consultancy fees of Rs. 975,004 fina....
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.... the record of receipt and payments of unaccounted transactions and sometimes assessee group has also maintained cash accounts on monthly basis through the various employees at various sites. Further there is no central accounting on daily basis was maintained or found during the search. v. unaccounted business receipts during financial year 2020 - 21 of Rs. 25.46 crores and the above opening balance of Rs. 828,903/- is nothing but out of the funds available from the above unaccounted business receipts offered by the assessee and its group. vi. AO has made an addition without making any verification, but explanation of the assessee was rejected without any cogent reason. vii. Accordingly, he deleted the above opening balance of Rs. 828,903/-. viii. With respect to the internal transfer of funds, he found that a sum of Rs. 73,84,000/- is the internal transfer of funds for financial year 2020 - 21 and Rs. 8,018,904 financial year 2021 - 22 totalling to Rs. 15,402,900. The above sum was stated to be internal movement of funds from one office or branches to the other office and branches of the assessee. The claim of the assessee is that this amount c....
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....ansfer of funds, the learned assessing officer himself has not made any addition. Before him, assessee produced seized documents, copy of the show cause notice for that year and reply furnished before the assessing officer on question raised by him. Therefore, it is a fact that the learned assessing officer in earlier year has accepted that internal transfer of funds cannot be taxed in the hands of the assessee. iv. Accordingly, the learned CIT - A deleted the above addition of three different nature (1) the addition of opening balance of Rs. 8,28,903/-, (2) addition of Rs. 7,384,000 in respect of internal transfers. 020. The learned assessing officer has challenged the deletion of the addition of Rs. 828,903/- as per ground number {1} and the deletion of the addition of Rs. 7,384,000 covered in ground number {2} of the appeal. 021. The learned departmental representative vehemently supported the order of the learned assessing officer and challenges the deletion of the addition holding that deletion is incorrect. He referred to the assessment order at page number 9 wherein the addition has been discussed by the learned assessing officer and Para number 9.5 of the ord....
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.... was shown as a part of the fund flow analysis, and therefore the explanation of the assessee is accepted. iii. With respect to the addition of Rs. 73.80 lakhs, there is movement of funds from different sites, which is found from the documents it, date and sites are also given and further the part of the seized documents shows that there is an internal movement of the funds. iv. He referred to row wise and column wise reconciliation of these items placed before all lower authorities to substantiate the claim. Connection is found from transfer of one branch to another branch is itself stated in the seized papers. v. These facts were also clarified before the learned Deputy Director of Income Tax (investigation) who has also accepted. vi. Such transfers are not income at all. vii. He further stated that all these documents were made available before the assessing officer along with the reply submitted before the DDIT {investigation} and therefore the addition is correctly deleted by the learned CIT - A. viii. Explanation of the assessee during search, before the investigation Wing as well as before the learned assessing officer re....
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.... vi. On the issue of telescoping, honourable Supreme Court in 66 ITR 722 has categorically held that telescoping is a question of fact. Therefore, it is for the revenue to prove that the fund flow statement shown by the assessee is factually incorrect. vii. Honourable Gujarat High Court in Aliasgar Anvarali Varteji [2018] 96 taxmann.com 231 (Gujarat) has categorically held that when the assessee has offered unaccounted income, its capitalization or telescoping assessee deserves. Of course, it is for revenue to show that the telescoping is not available because amount of income earned by the assessee have already been invested in other assets. Such fact is not demonstrated before us. Honourable Bombay High Court also in case of 61 taxmann.com 357 has also categorically held that when the income has already been taxed, its subsequent withdrawal cannot be taxed once again. viii. Thus, in absence of any other adverse fact pointed out by the learned assessing officer, we do not find any infirmity in the order of the learned CIT - A in granting the benefit of telescoping. ix. Thus, taking into consideration all the factors of disclosure made by the assessee for....
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.... search on the assessee where a photo was retrieved from the WhatsApp chat between the director of the company and one Mr. Shailesh Patil. This document is sent by Mr. Patil to the director. statement of the directors was recorded on oath under section 132 (4) of the act on 23/9/2021 wherein after explaining some of the transaction he failed to give any explanation stating that he is not able to recall details of such transaction. Ongoing through the said evidence, it was noted that it is a document for the period between 11/3/2021 - 16/3/2021 where the opening balance of Rs. 16.24/- crores, total receipt of Rs. 97,200,000/- and payment of Rs. 19,566,500/- is mentioned. The assessee was asked to provide the details of explanation of each entry along with the name, permanent account number and address of the parties involved along with the documentary evidence. The assessee submitted that that the above document belongs to Mr. Patil and that only some of the transactions are pertaining to the assessee. Statement of Mr. Patil was also recorded by the learned assessing officer who also made similar claim but failed to substantiate the transactions. Mr. Patil categorically accepted tha....
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....t of 25 transactions, explanation of 15 transactions was that Mr. Latke does not remember the details of the transaction. Similarly, statement of Mr. Girish Pawar was also recorded under section 132 (4) on 23/9/2021 and in reply to question number 179 he also stated that Mr. Sailesh Patil is an Angadia providing services for movement of cash to the assessee and its group of unaccounted cash generated from construction and consultancy business. Further, in reply to question number 19 - 21 of the statement recorded of Mr. Girish Narayan Pawar at Embassy Centre Nariman point he clarified that Mr. Patil is a businessman working in Kalyan and has carried out Angadia services for movement of cash transaction. The learned CIT - A noted that opening balance of Rs. 162,451,306 is depicted in the document sent by Mr. Patil to the director. Out of the above transaction, a transaction of Rs. 185 lakhs of receipt and Rs. 17,088,000 of payment belongs to Mr. Sailesh Patil. Further, there is a construction income of Rs. 3,650,000/- construction expenditure of Rs. 9,92,750/-. Further, the transaction also shows that the consultancy income of Rs. 190 lakhs and expenditure of Rs. 4,07,000/- has been....
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....orporated in the total income of the assessee to be assessed finally. Therefore, he directed the AO to make an addition to the extent of 70% of such income of (Rs. 190 lakhs -30% of expenditure) Rs. 133 lakhs as addition. Therefore, he confirmed the addition to that extent. iv. With respect to the balance sum of Rs. 36.5 lakhs it was stated that a sum of Rs. 33 lakhs has already been offered as income by the assessee in the name of M/s Ganadhish other group concern and Rs. 350,000 in Roshni Enterprises. On verification of the above claim, he directed the AO to delete the addition of Rs. 36.5 lakhs if the claim of the assessee is found to be correct. Therefore, he directed the AO to examine the claim of the assessee and deal with the addition accordingly. v. The CIT - A further directed that if the above sum has not been disclosed in those other group concern, then the addition of Rs. 36.5 lakhs and confirmed in the hands of the assessee. vi. With respect to the addition of Rs. 50 lakhs it was stated that it is an internal movement of funds from one office to another office of the same assessee through Angadia Mr. Sailesh Patil. Therefore, as it is an inte....
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....ther than the assessee. The ground number 3 did not challenge the deletion of any amount of addition by the learned CIT - A but in principle the addition is challenged. The tax effects stated against that ground is Rs. Nil . 033. The ground number 4 is with respect to the addition deleted in the hands of the assessee of Rs. 33 lakhs and Rs. 350,000 on the ground that these pertain to the transaction of the other concern of the assessee group for the reason that CIT - A deleted without appreciating the fact that the assessee during the assessment proceedings could not explain and had not supported it with any documentary evidences. This ground is related to the disclosure of the sum of Rs. 33 lakhs in the hands of M/s Ganadhish and Rs. 350,000 in the hands of Roshni Enterprises i.e., other concerns of the group. 034. The learned CIT DR collectively argued ground number 2, 3 and 4. He also collectively argued the addition confirmed by the learned CIT - A against which the assessee is in appeal. Such additions are of Rs. 85 lakhs and Rs. 510 lakhs. 035. He referred to the document found during search from mobile phone of the director of the company a document that was sent by....
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.... order of the learned AO. 038. The learned authorized representative submitted that Mr. Sailesh Patil is engaged in the business of Angadia. He referred to page number 104 of the order of the learned CIT - A. He further stated that in the assessment proceedings under section 143 (3) of the act passed in the hands of Mr. Sailesh Patil on 10/7/2023 his business is accepted, and he has owned the transactions. He further stated that the learned assessing officer has stated that all the transaction mentioned in the document sent by WhatsApp by Mr. Sailesh Patil to the director of the company belongs to the company. He submits that this finding is without any basis. He stated that it is for Mr. Sailesh Patil to identify who are the other parties other than the assessee. If Mr. Sailesh Patil does not say that all these transactions are pertaining to the assessee, the learned assessing officer has merely drawn adverse inference. Naturally, the document has been sent by Mr. Sailesh Patil so for such document belongs to Mr. Sailesh Patil and the director is merely a receiver of that document. 039. Coming to second part of ground number 2 of the appeal wherein an addition deleted by the....
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..... Therefore, the learned CIT - A has correctly decided this issue for verification of the learned AO. With respect to the addition of Rs. 3.5 lakhs also similar direction is given by the learned CIT - A. Accordingly, he submits that there is no infirmity in the order of the learned CIT - A. 041. We have carefully considered the rival contention and perused the orders of the lower authorities. We have also considered the documents submitted in the paper book filed by the assessee. 042. The second limb of ground number 2 is with respect to the addition deleted by the learned CIT - A on account of internal transfer of cash. This addition entry number 8 dated 12 March 2021 where there is a document that shows that there is a transfer of Rs. 50 lakhs from Nariman point office. The claim of the assessee is that this money has been transferred from Nariman point office in cash by the Angadia Mr. Sailesh Patil. Thus, the claim is that it cannot be the income when the money is transferred from one office to another office. The learned CIT - A in paragraph number 10.15 has deleted the addition holding that this is an internal movement of funds made by the assessee from one office to th....
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....f various entries found therein, the director of the company identified some of the entries and stated that only Mr. Sailesh Patil who has sent this message would be able to show to whom it belongs. It was further stated that the Mr. Sailesh Patil is not the employee of the assessee. On the several entries, the director of the assessee also stated that in the assessment, assessee has offered the income with respect to the same. The summons under section 131 was issued to Mr. Sailesh Patil, his statement was recorded. He stated that. i. He is into the business of angadia, and he collects cash from one-place office customers and delivers the cash at other place as instructed by his customers. ii. He confirmed that he has sent the above WhatsApp message to the director of the company. iii. Assessee group is also one of the clients to whom he provides the angadia services. iv. He further confirmed that he collects cash from the various offices of the assessee and delivers the cash according to the instruction. v. In reply to question number 26 he has categorically stated that the content of the transaction of the WhatsApp image sent by him t....
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....laim of the assessee is found correct, the addition deserves to be deleted. Nothing is shown before us that the above income has not been offered by those entities. Instead of that the assessee has produced the assessment order in case of Ganadhish GNP where assessee has stated that this income has been offered and taxed in assessment proceedings under section 143 (3) read with section 147 of the act. That group concern has offered total income of Rs. 68,197,810/- in its return of income. On careful perusal of that assessment order, we find that only the disallowance of expenses was made and there is no separate addition further of any income. M/s. Ganadhish GNP is also assessed by The Deputy Commissioner of Income Tax, Central Circle - 6 (1), Mumbai i.e., the same assessing officer who is assessing the assessee. Further, the above sum is offered by the group concerns as 'on money' received. That sister concern has in fact offered Rs. 13.65 crore 'on money' income from construction activity. Further, the claim of the assessee that sum of Rs. 3,50,000 has also been similarly assessed in the hands of M/s Roshani Enterprises, another group concern. In view of these fac....
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....siness of construction as a builder developer and rendering consultancy services as a group. During the search WhatsApp image was extracted from the mobile phone of the director of the company. The director of the company was questioned. It was stated that documents contain the details of cash balance available with the group at various offices branches out of its unaccounted business receipts. Assessee also submitted that in 132 (4) statement of the assessee that assessee has already disclosed unaccounted business receipts of the assessee group for various years. It was stated that assessee has offered real estate receipt of Rs. 54.74 crores, consultancy receipt of Rs. 23.67 crores and other receipts of Rs. 2,250,000. Therefore, the total unaccounted income offered by the assessee is Rs. 78.64 crores. Therefore, this addition is already part of the disclosed income of the assessee under section 132 (4) of the act. The learned CIT - A decided this issue as per ground number 9 of appeal before him at paragraph number 12 of appellate order. He held as under:- "12.2 it is noticed that during the course of search, carried out on the group WhatsApp image was extracted from the ....
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....ss) which the assessee has explained as the balance available at various offices of the group out of unaccounted business receipts from construction and consultancy services. According to the assessee, the group had already offered crores unaccounted business receipts during the search of amount in two Rs. 78.64 crore as given in paragraph number 10.9 of the submission of the assessee and total gross receipts from business for the period up to 31/3/2021 at Rs. 63.28 crore and fact of internal movement of funds have been duly explained in the earlier grounds as well. It was also submitted by the assessee that the AO has not brought any evidence on record to show that the assessee group was having any other sources other than that explained above. According to the assessee, the AO had made the addition by only giving the reason that the assessee has not substantiated its claim with the documentary evidences. Other than this, a has not brought any evidence or given findings contrary to the explanation submitted by the assessee during the assessment proceedings. According to the assessee, while the AO has accepted partly the transactions of contract entries mentioned in the said docume....
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....r, he has not accepted the other part of the explanation of cash balance of Rs. 13.41 crore available out of source of business receipts and that's these receipts were lying on particular day from internal transfer from one office to another and the source of these receipts had already been offered to tax in the return filed pursuant to search. This fact had been brought to the notice of the AO per letter dated 9/9/2022, 30/12/2022 and also at the time of disclosure during search and explained in the detail submission made above. 12.6 In my view, the explanation of the assessee is plausible considering the fact that GM group had cash balance of more than 14.27 crore out of the unaccounted income disclosed.. It was also brought to the notice of the search party as well as the AO wide letter dated 12/1/2022, 9/9/2022 and 30/12/2022 respectively. Further, GM the group as a whole offered Rs. 27.74 crore and (Rs. 18.75 crores up to 31/3/2023) as unaccounted income pursuant to search. Keeping this fact in mind along with the fact that no cash for this magnitude had been seized and also that the assessee to whom the documents belonged has explained the contents thereof which ....
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....the learned CIT - DR is that the learned CIT - A has given the benefit to the assessee of the already disclosed income for the purpose of opening balance in the seized document without any evidence. 051. The learned authorized representative submitted that the above sum of Rs. 13.41 crores is added by the learned assessing officer to the total income of the assessee because it has been stated to be a balance available at various branches of the assessee. He referred to page number 44 of the paper book and page number 1162 of the paper book where the complete disclosure made by the assessee has been shown. He further stated that the opening date in the excel sheet is 27/8/2020 and therefore it cannot be said that on that date this is the income of the assessee. It was further stated that it is not the annual statement but daily cash statement of the various branches. Based on this the assessee has already disclosed income which subsume this. He further referred to page number 314 of the paper book to show that it is a daily cash statement and opening balances are coming from the respective earlier date. With respect to the explanation about the transfer of funds, he referred to p....
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.... learned CIT - A has considered the fund flow statement of unaccounted income offered by the assessee that is part of his order at page number 38 and 55. In the statement recorded under section 132 (4) of the act assessee has disclosed real estate receipt of Rs. 54.74 crores, consultancy receipt of Rs. 23.68 crores and other receipts of Rs. 2,250,000 totalling to Rs. 78.64 crores. Therefore, as the cash recorded as opening balance as on 26/8/2020 is less than the overall disclosure of Rs. 78.64 crores, the learned CIT - A has held that when the income is disclosed, the resultant application of such income naturally either would be in cash or in other assets,, which could not be taxed once again. It is also required to be seen that such cash was found in that cashbook on 26/8/2020. Therefore, naturally, if the income is disclosed which is higher than the amount of cash found in that cashbook, then only it can be said that cash was available with the assessee out of undisclosed income, unless contrary evidence are found that there is investment out of such undisclosed income prior to that date. Apparently, in those circumstances, the assessee did not have such cash available on that ....
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....which was recorded on 26/8/2020, could not have been found on the date of search on 23/9/2021. The reasons given by the learned CIT - A in paragraph number 12 of his order is also sustainable. In view of this, we confirm the order of the learned CIT - A in deleting the addition of Rs. 13.41 crores made by the learned assessing officer based on the cash statement pertaining to 26/8/2020. Accordingly, ground number 5 of the appeal stands dismissed. 053. Ground number 6 is with respect to the deletion of the addition under section 69C of the act of Rs. 54,830,909/-. Ground number 7 of the appeal is also connected to ground number 6. 054. The addition of Rs. 54,830,909 comprises of several additions made by the learned assessing officer during assessment proceedings. These are described hereinafter. 055. During search, a pen drive was found from the employee of the company wherein it was found that that there are internal cash transfers, opening balances and the receipts mentioned in the sheet and the expenses. In paragraph number 6 of the assessment order, it is discussed. This is also discussed while deciding ground number 1 of the appeal of the AO. In the said document open....
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....ide the details of the income contained in the document of Rs. 1 lakh and the expenditure of Rs. 157,000/-. The assessee failed to explain and therefore the learned assessing officer over and above making the addition of Rs. 1 lakh as unaccounted business income made the addition of Rs. 157,000/- as unexplained expenses under section 69C of the act. This is as per Para number 9.3 of the assessment order. 059. Further, during search, backup of mobile phones was found of the director of the company. Digital evidence and images of it were retrieved from mobile phone. In that mobile phone, there were images of various cash vouchers. These were further confronted to the director of the company. The total sum of Rs. 3,692,100/- was confronted in fifteen such images to the director. Director of the company denied the statement stating that there is no signature in the any of the vouchers. The statement of the executive assistant to the directors explained that she used to send these vouchers for the approval and the director was to approve the same over the WhatsApp chat. The AO agreed that though there is no physical signature of the director of the company however same have been appr....
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.... assessee and therefore no separate addition should be made of unaccounted expenditure incurred by the assessee. The assessee submitted these details of such expenditure in the paper book filed, and in the return of income assessee offered that income. During assessment proceedings, the learned assessing officer made a separate addition of Rs. 5.48 crores. The learned CIT - A was requested to consider the argument that assessee has already disclosed the income however has not claimed any such expenditure and therefore no disallowance/separate addition can be made and secondly the addition made by the learned assessing officer has been subsumed in 30% of the total business receipts. The learned CIT - A held that once the receipt has already been taxed, the application of such income in the form of expenditure could not be once again added to the total income of the assessee. He further held that when learned assessing officer has believed the business receipts as per seized documents, the expenditure also has to be believed and therefore the net income is to be estimated and no separate addition is required to be made under section 69C of the act as held by the honourable Bombay Hig....
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.... has made addition of the opening balance as well as the receipt as undisclosed income of the assessee. When in the same document there are references of the expenditure, the learned assessing officer has further added such expenditure under section 69C of the act. It is apparent that only the net addition is required to be made arising out of the seized documents. If the approach of the learned assessing officer is accepted, it will result into the addition of the income as well as the addition of expenditure under section 69C of the act. The learned CIT - A has also relied upon the decision of the honourable Bombay High Court in case of Golani Bros, (supra). We do not see any infirmity in the order of the learned CIT - A. Even the statement that the logic given by the learned CIT - A is not correct is also not supported by the reason. Further provisions of section 69C of the act applies where in any financial year the assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part there of the explanation offered by him is not in the opinion of the assessing officer satisfactory, then amount covered by such expenditure or part there....
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....n is outstanding balance of each of the broker and the total of such outstanding sum is Rs. 95,206,500/-. Another mage was also found wherein the name of four brokers are mentioned showing total of Rs. 16.24 crores as amount received till date and further the name of the brokers is mentioned against them amount received is mentioned. At third message was also found wherein against the name of broker certain figures are mentioned. During search the AO questioned the director who claimed that these are the amounts directly paid by the buyers to Maharashtra industrial development Corporation (MIDC) and those are made through cheque. The director also provided listed of units handled by each of the broker. In post search proceedings, director of the company accepted that the assessee has received Rs. 1 lakh per plot as its service fees for total 281 clients. He submitted that two hundred clients are handled by him for AARUL cluster and 81 clients are handled by him for TTC cluster. He submitted that these incomes are offered in assessment year 2020 - 21 and 2021 - 22. The learned assessing officer noted that from the image it is apparent that a sum of Rs. 13 lakhs to Rs. 18.60 lakhs pe....
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....he company could not produce the details. The AO also disbelieved the receipt of Rs. 1 lakh per unit being consultancy fee of the assessee. Based on this the learned AO made an addition of Rs. 130,993,119/- and of Rs. 81 lakhs to the total income of the assessee as unaccounted business receipts. 068. The learned CIT - A dealt with this issue as per ground number 5 of his order. The learned CIT - A deleted the addition for the following reasons:- i. Assessee is in the business of providing consultancy services in the field of industrial setup in MIDC. ii. The WhatsApp images found from the mobile of the assessee director was sent to him by one broker Mr. Pradeep (Uday) Dahale. iii. This document was explained by the director of the company in statement under section 132 (4) of the act in reply to question number 50 stating that it is a statement of the parties who wants to purchase land from MIDC by paying directly to the MIDC through various brokers. The assessee earns consultancy fee only after the occupation certificate of the building has been received after construction by those buyers. iv. All these payments have been received in cheque b....
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....icer. 070. The learned authorized representative specifically referred to the seized document placed at page number 556 of the paper book. It was stated that the brokerage is not added to the total income of the assessee, but the total sale price is added to the total income of the assessee. He submits that as the land belongs to the MIDC and not to the assessee the sale price cannot be considered as income of the assessee. Therefore, according to him it is not the income of the assessee. He submitted that the assessee has already disclosed the consultancy charges of Rs. 1 lakh per unit for 281 units therefore the learned CIT - A is correct in deleting the addition. 071. We have carefully considered the rival contention and perused the orders of the lower authorities. During search WhatsApp image was found from the mobile phone. The WhatsApp image is an excel sheet where the name of various brokers, the rate of the land, number of cases handled by each of the broker and amount receivable for the transaction and total amount received until date along with the outstanding balance is mentioned. The explanation of the assessee is that the name of the broker is mentioned who have ....
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....IT - A has failed to consider that assessee has not submitted any documentary evidence that the 30% of the expenses were incurred by it for earning of such income. In addition, in absence of any evidence, such claim cannot be entertained. 073. This issue came up before the learned CIT - A as per ground number 14 of the appeal wherein the assessee claimed that out of the gross income offered for taxation, 30% of such income should be granted as a deduction on ad hoc basis to the assessee for the expenditure incurred for earning such income. The fact shows that during search numerous evidence of unaccounted business receipts and expenditure were found which were not recorded in the books of accounts of the assessee. In the statement recorded of the director, he has accepted and owned various unaccounted business receipts. Assessee offered 70% of such income as net income during statement recorded under section 132 (4) of the act. It was also explained by letter dated 11/2/2022 claiming that the net income is to be estimated based on the evidence found. It was also claimed by the assessee that during search itself, various documents were found which itself shows that there is vario....
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....e. 075. The learned authorized representative vehemently supported the order of the learned CIT - A. 076. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that in paragraph number 16.7 of the appellate order the learned CIT - A has categorically noted that assessee has incurred expenditure in its regular business at the rate of 28% to 62% and average net profit for all the years' amounts to 53% of the gross receipts. Further in the seized documents, unaccounted receipts were found of Rs. 23.67 crores and unaccounted expenditure was found at Rs. 7.19 crores which is almost 30.03% of the unaccounted receipts and therefore the claim of the assessee is reasonable and can be accepted that the gross receipts 30% of deduction should be allowed for the expenditure incurred by the assessee. Accordingly, we do not find any infirmity in the order of the learned CIT - A which is based on the financial statements of the assessee for past year as well as based on evidence found during search in the seized material. Accordingly, ground number 10 of the appeal of the AO is dismissed. 077. In the result, appeal filed by the lear....
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....orically recorded that as the director of the assessee company at the time of search had admitted that these entries pertain to amount received in cash by the assessee and later on before the assessing officer saying that these entries pertain to cheque payments cannot be accepted without any retraction filed by the director. Accordingly, he confirmed the addition of Rs. 5.10 crores in the hands of the assessee. As the assessee has not owned up this amount of Rs. 5.10 crores as the business income of the assessee company, he also refused to grant deduction at the rate of 30% of such income as expenses also. Therefore, in fact he confirmed the addition of Rs. 5.10 crores in the hands of the assessee based on the two entries stated in the seized document on 13 March 2021 and 15 March 2021. 082. Another sum of Rs. 85 lakhs was also confirmed wherein it was found that there are three entries dated 12th March 21 and 15th March 21 of Rs. 20 lakhs, 40 lakhs and Rs. 25 lakhs respectively totalling to Rs. 85 lakhs. The answer given by the director during statement recorded under section 132 (4) with respect to the sum of 20 lakhs is that it is a consultancy charges received in cash from ....
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....nnot escape from the taxation of the same. He further stated that as the assessee has not owned up this income, there is no question of granting any benefit of expenditure at all from such income. 085. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that on 12 March 2021 the assessee has received a sum of Rs. 20 lakhs from one Mr. Umang Jain which has been confirmed in the 132 (4) statement of the director of the assessee that this sum is a consultancy charges received in cash from that particular agent. There is no evidence that such income has not been received by the assessee. Merely because Mr. Sailesh Patil who is an Angadia has been assessed on the above sum, albeit on commission on this sum, it cannot be said stated that he has owned the ownership of the sum of Rs. 20 lakhs. Accordingly, we do not have any hesitation in confirming the order of the learned CIT - A to the extent of including the income of Rs. 20 lakhs as income of the assessee from consultancy charges. We further hold that as the assessee is charged to tax of consultancy fees of Rs. 20 lakhs, as held in deciding ground number 10 of the appeal of the....
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.... book stated that assessee has explained that this amount is a collected by Sailesh Patil from Sukhkarta general engineering private limited on account of premium on allotment of CFC plot payable in their favour of MIDC by above company. Letter confirming the receipt of cheque was also submitted along with the copy of cancelled cheque , which was returned back due to variation in the premium amount subsequently calculated by MIDC. The copy of letter was also submitted. It was the claim of the assessee company was hired by that company for rendering services to transfer of CFC plot in the name of the said company, which is a promoter of CFC, who supervises and provide the services to clusters . Therefore, claim of the assessee is that the above amount of cheque is issued by the said company in favour of MIDC is premium charges stated above and consultancy fee of Rs. 11 lakhs received by the assessee for rendering such services has duly been accounted in the regular books of accounts. Assessee also supported the same by submitting the Ledger account. The assessee also stated that the same facts were clarified during search to the DCIT (investigation) wide letter dated 12/1/2022 submi....
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....ot examine these aspects. Therefore, facts that emerges is (i) Sukhakarta General Engineering Limited has to pay a sum of Rs 2.10 Crores to MIDC for premium of a plot. (ii) In the WhatsApp message there is reference of cash payment of Rs 2.10 cr by Mr. ShaileshPatil to Assessee on account of Sukhkarta. Thus, Mr. Sailesh Patil is the correct person to state whether , he delivered cash to assessee received From Sukhkarta Engineering Limited and who paid him such cash. (iii) Assessee has already recorded commission income of Rs 11 lakhs on this transaction of purchase of land by Sukhakarta Thus, it is not clear whether the amount mentioned in the WhatsApp message on identical date of the identical amount from the identical party is cash or cheque Transaction. Whether both the transaction is same or different. Further, whether the above sum is income of the assessee over and above Rs. 11 lakhs recorded in the books of account or not is required to be examined. As we have restored the issue of the addition of Rs. 65 lakhs back to the file of the assessee involving similar facts, we also restore the addition of this sum of Rs 2.10 Cr also back to the file of....
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....ion. The facts of this transaction are identical to the facts of the case where the addition of Rs 2.10 crores is contested in the same ground. As we have already set-aside the issue back to the file of the learned assessing officer for examination of these facts and to ascertain whether the assessee has received the professional income over and above the above sum mentioned in the cheque or not. With similar direction, we restore this issue back to the file of the learned assessing officer to decide it afresh. 093. Accordingly, ground number two of the appeal is allowed with above direction. 094. Ground number 3 of the appeal is with respect to the addition of Rs. 5,132,900/- comprising of three amounts (1) sum of Rs. 2,672,900/-, (2) Rs. 380,000/- and (3) Rs. 2,080,000/-. All of these are treated as unaccounted cash receipts of the assessee. The fact of the case shows that that the learned assessing officer based on the images of the diaries found from the WhatsApp image of Mr. Kaustubh latke has made the above addition. 095. The amount of addition of Rs. 2,672,900 is concerned, it pertains to the transaction of the assessee carried out by one Mr. Rajesh saboo on account....
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..... The GNP is not a partner. For the charges of the land, it is mentioned that GNP charges would be Rs. 5 lakhs per acre totalling to Rs. 26.725 lakhs. The paper also shows as under:- "Payment to Lahane 5.345 * 20L = 1,06,90,000 Cheque 27 13 750 79,76,250 Registration Charges 23,750 80,00,000 Paid by GNP by deducting 27 lakhs Service charges 63,00,000 Balance 17,00,000 (Will be paid by Saboo to Lahane on 19th Jan at the time of registration)" Thus, based on the above document it is clear that there is a transaction which has been agreed for purchase of 5.345 acre of land by one Mr. Rajesh Saboo. Claim of the assessee is that such transaction ultimately did not materialize. The lower authorities have made the addition of Rs. 2,672,900/- in the hands of the assessee. The document shows that the assessee has paid Rs. 63 lakhs by deducting Rs. 27 Lacs as its service charges. Therefore, assessee was to receive service charges of Rs. 5 lakhs per acre. However, as the claim of the assessee is that transaction has not materialized and therefore ....
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....der, the document found from the WhatsApp chat is stimulated. According to that chat it is found that total cash involved in the deal is Rs. 3,995,000/- out of the total cash amount shri Umang Jain has given Rs. 10 lakhs as an advance and expected to give Rs. 2,995,000/-. There is further instruction to pay Rs. 2,615,000/- out of this transaction to Shri Thackeray. From the above cash movement, the learned assessing officer found that out of the total cash transaction Rs. 380,000/- being difference of Rs. 2,995,000 and Rs. 2,650,000 is the GNP charges, which are unaccounted cash receipt of the assessee. During assessment proceedings, the assessee claimed that these are merely proposals, but the learned assessing officer has categorically noted that as Mr. Umang Jain has given Rs. 10 lakhs, it shows that the transaction has already taken place. On appeal before the learned CIT - A he confirmed the same. 0100. The claim of the learned authorized representative is that before the assessing officer it has been categorically stated that this was the proposal only and the transaction has not materialized. It was further stated that the message only says that somebody has paid Rs. 10 l....
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....the learned authorized representative before us is also that the above transaction is not materialized and therefore no income has accrued in the hands of the assessee. It was also submitted that a request was made before the assessing officer that such information can be called from the broker for further verification if required. Therefore, it is apparent that the explanation of the assessee is similar to the above two additions. 0106. The learned CIT DR vehemently supported the order of the AO and stated that in the said document there is a specific reference of GNP charges of Rs. 2,080,000/- and therefore such income has been added and confirmed by the learned CIT - A. 0107. We have carefully considered the rival contention and perused the extract of the document placed at page number 24 of the assessment order. The transaction related to the land at Gate number 1269 having an area of 104 R (2.6 acre) to be purchased from four farmers where the total consideration is Rs. 72.80 lakhs out of which a cheque payment of Rs. 12 lakhs is to be made and the balance payment is to be made in cash. In the same document the charges of assessee were mentioned at Rs. 2,080,000/-. In th....