AI Drafter 
TaxTMI 
TaxTMI 
2025 (2) TMI 400
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....he Act') was conducted on 10.01.2019 in the case of the assessee. In response to the notice u/s 153A(a) of the Act issued on 07.10.2019, the assessee filed its return of income on 18.10.2019 declaring total income at Rs. 20,09,000/- which was the income returned earlier. Statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the assessee filed the requisite details from time to time as called for by the Assessing Officer. 4. During the course of assessment proceedings, the Assessing Officer noted that search action u/s 132 of the Act was conducted in the case of M/s. Meenamani Ganga Builder LLP as a part of search action in Goel Ganga Group on 10.01.2019. During the course of search action various incriminating documents in the form of loose papers were found and seized from the office premises of M/s. Meenamani Ganga Builders LLP. When these documents were correlated with entries found in other documents and registered deeds, it became evident that the assessee firm was involved in accepting on-money in cash for booking/selling of flats/shops. The Assessing Officer narrated the findings of the search action which is as under....
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....nent over and above the agreement price could not be traced. Please produce all such booking forms in respect of all the tenaments of the project. Ans. As I have already told you that this is the process of documentation. However, from majority of files the other booking forms are missing which you have requested to produce. The other booking forms cannot be found in all files as the same are being destroyed from time to time after the process of completion of transactions and in some of files the same was left to be removed and therefore it was found." 5. However, the Assessing Officer noted that in response to the notice u/s 153A of the Act, the assessee has not offered the on-money in the income tax return filed. Therefore, he asked the assessee to explain as to why the addition should not be made on account of receipt of such on-money and also why it should not be extrapolated for the remaining flats/shops. 6. The assessee submitted that it has not accepted any on-money against the sale of its units in the said project. It was submitted that the documents on the basis of which it has been alleged that on-money is being accepted by the assessee are merely booking ....
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....n-money or any other issues. Evidence could De oral or documentary. A piece of paper, statements, could be evidence. Even digital data such as whatsapp chat, e-mail, etc have been accepted by the various Court to be evidence. Here in the case under consideration, both documentary in the form of Booking Forms as well as oral evidence in the form of statement are available. The statement of Shri Shirish B. Ranpise was not vague but it was very specific that the cash has been received. Shri Ranpise has not only accepted the cash has been received, but clearly gave the description of all transactions appearing on the Form. The details of documents and the findings thereon are as under: (a) During the course of survey action, statements of Shri Shirish Bhanudas Ranpise, Sales Manager was recorded u/s 131 of the Income-tax Act, 1961 and agreed by the sales team. In his statement, Shri Shirish Bhanudas Ranpise accepted that cash component was accepted in booking of flats. In reply to Q. No. 08 of his statement, when page no 72 of his diary (seized as Bundle No. 01) dated 03/06/2017 was shown to him. He explained its contents that shop of saleable area of 860 sq. ft. in Ganga Fern....
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....cash component submitted by Shri Shirish Bhanudas Ranpise, Sales Manager, on the basis of two forms found in the files of the customers during the course of search action, as under: (i) in sale of Shop No. B-09 of Ganga Fernhill, the area of the shop is 695 sq ft. As per page no. 5 of bundle no 10 booking form-1, the agreement value is shown as Rs. 25,71,500 at the rate of Rs. 3700/- per sq ft. & agreement to sale is also executed on same amount. As per page no. 13 of bundle no 10 Booking form-2 found in the same file, the cash amount of Rs. 45,17,500/- at the rate of Rs. 6500/- is mentioned, which is taken in cash over and above the amount of Rs. 25,71,500/- shown in agreement to sale. It is explained in detail at above para. (ii) In sale of Shop No. D-04 of Ganga Fernhill, the carpet area of the shop is 380 sq ft as per page no. 4 of seized Bundle no 4 and agreement amount mentioned here is Rs. 44,75,700/-, Page No. 6 of seized bundle no. 3, here agreement value mentioned is Rs. 56.84,000/- so total cost comes to Rs. 1,01,59,700/-. Agreement has been executed for Rs. 55,04,000/- so cash component in this deal comes to Rs. 43,25,600/-, which is taken in cash over....
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....r the sale/booking of the shops. It may be mentioned that the rates per square feet (for recorded payments) as stated on the seized documents tallied with the rates mentioned in the sale deeds. 5.4 Therefore, the evidence found cannot be said as merely booking form but also an incriminating evidence which clearly proves that the assessee has received on- money on sale of shops in its project "Gariga Fernhill". Further the assessee has not produced any document which is contrary to the data fond in those forms. There is a legal presumption u/s. 114(e) of the evidence act that the proceeding or the finding in the order are deemed to be correct unless contrary is proved otherwise. The assessee has never denied of the incriminating evidences found from his premises and the consideration worked out on it. His only contention is that those forms were only draft booking form. But once it is proved that the document was in possession of assessee then, in terms of provisions of Section 132(4)(a) r.w.s. 292C of the IT Act, a presumption arises that the contents of the impounded/seized documents are true. Thus, the presumption that the Assessee has received on-money cannot be denied.....
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.... details of which are as below: Sr No Name On money Consideration as per registered deed % of on money vis-à-vis consideration as per registered deed Date of registry AY 1 Ramesh Kumar Choudhary 45,17,500 Rs.27,26,500 165 30/12/2016 2017-18 2 1. Nitin B Handel 2. Devyani N Handel 46,55,700 Rs.56,84,000 82 27/07/2018 2019-20 3 1. Nitin B Handel 2. Devyani N Handel 37,56,600 Rs.45,32,000 82 27/07/2018 2019-20 4 1. Nitin B Handel 2. Devyani N Handel 46,55,700 Rs.55,04,000 84 27/07/2018 2019-20 From the above table, it can be seen that percentage on on-money accepted by Assessee with the consideration shown in registered deed varies from shop to shop. Therefore, to meet the end of justice and considering the facts of case, it is assumed that Assessee accepting 80% of on-money compare to consideration shown in registered deed. Considering the same, the on-money portion is determined as below: For AY 2017-18: Sr No Shop no Consideration as per registered deed Date of registry On-money 1 B-7 50,20,500 10/03/2017 40,16,400 2 D....
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....money. It was accordingly argued that the contention of the Assessing Officer regarding one of the booking forms pertaining to on-money is completely baseless. It was argued that the Assessing Officer has completely disregarded the business practicalities existing in the case of the assessee. The following details were produced before the Ld. CIT(A)/NFAC to show that the rates are disproportionately high as compared to the rates at which all the other units are sold by the assessee as well as the rates quoted by the projects being developed in the vicinity of the assessee: Sr. No. Shop No. Area (in sq.ft.) Total consideration as per Ld. AO(INR) Selling rate per sq.ft. 1 B09 463.32 70,35,000 15,184 2 D04 376.09 1,01,59,700 27,014 3 D05 331.83 81,08,000 24,424 4 D07 376.27 1,01,59,700 26,991 13. Similar arguments were made for other shops. It was further submitted that in his statement recorded u/s 132(4) of the Act, Shri Annuj Goel, partner of the assessee firm had completely denied the receipt of any on-money. Since Shri Annuj Goel is the final decision making authority and once he has denied to have rece....
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.... Piyush Alimchandani who is also involved in negotiation of sales in respect of some of the shops of Ganga Fernhill and Ganga Florentine, I have consulted with Mm and the contents is being explained accordingly. The working is in respect of one of the shop having salable area of 860 sq ft. in Ganga Fernhill, the dealing of which was negotiated by Mr. Piyush Alamchandani has confirmed that the rate # 6400 has been finalised for agreement and all the necessary taxes and Other liabilities are worked out accordingly. The amount of Rs. 39,62 lakh has been received by Shri Annuj Gael in cash over and above the agreement price Rs 46L>7 per sq. ft. The actual rate is therefore worked out to Rs, 11007 per sq ft. which has been arrived after final negotiation. ii) In the same way, Shri Shirish Bhanudas Ranpise showed and explained the file of customer Shri Ramesh kumar Chhatraram Choudhary where the actual final negotiated price was Rs 10200/- per sq ft of sale area 695 sq ft of Shop No. B-09 in project Ganga Fernhill, Undri, Pune. The agreement was executed at Rs. 3700/- per sq ft and the balance amount of Rs. 6500/- per sq was received in cash over and above agreement to sale. Fur....
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.... the cash component ever and above the agreement price could not be traced. Please produce all such booking forms in respect of all the tenaments of the project. Ans As I have already told you that this the process of documentation. However, from majority of files the other booking forms are missing which you have requested to produce. The other booking forms cannot be found in all files as the same are being destroyed from time to time after the process of .... iii) Shri Shirish Bhanudas Ranpise, Sales Manager submitted the details of differences in booking and agreement values in whose cases two booking forms were found. This was submitted along with his statement. Copy of the said differences was tabulated and made part of the statement of Shri Ranpise. The same is reproduced for ready reference. ..... Explanation of the details of cash component submitted by Shri Shirish Bhanudas Ranpise, Sales Manager, on the basis of two forms found in the files of the customers during the course of search action, as under. (a) In sale of Shop No. B-09 of Ganga Fernhill, the area of the shop is 695 sq ft. As per page no. 5 of bundle no 10 booking f....
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....t appellant would accept the on- money in one flat and couldn't accept in the neighbor flat. This proposition of the AO is supported by the decision of jurisdictional Hon'ble ITAT, Pune Bench in the case of Golani Brothers (supra), wherein the Hon'ble Tribunal has upheld the action of the AO in assuming that assessee must have also received the 'on- money' in respect of the balance 67 shops sold during these years, when the material found and seized in search contained only a list of 201 shops in respect of which 'on-money' was received by the assessee. The appellant has tried to distinguish the case laws relied upon by the AO. However, the contention of the Appellant that during the case of the appellant the partners of the appellate have denied having received on money is nothing more than a feeble alibi. Also the contention of the appellant that and the statements of sales executives relied upon by the AO do not point out any modus operandi of accepting cash, is not found to be true. The sales executives have explained the modus operandi of accepting on money in depth. Accordingly, the view taken by the AO that the appellant has accepted on-money, whi....
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....r provisions and scheme of the Act it be held that, the First Appellate Authority erred in upholding the addition of Rs. 1,49,74,500/- made by the Learned Assessing Officer ('Ld. AO') as on-money received by the Appellant. The addition sustained is unwarranted, unjustified, and contrary to the provisions and scheme of the Act. The addition so made be deleted. The Appellant be granted just and proper relief in this respect. 2. Without prejudice to Ground No. 1 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that if any addition needs to be sustained then that should only be restricted to the incriminating material found during the course of search proceedings. The addition made over and above such incriminating material, being merely on the basis of estimations is unwarranted, unjustified and contrary to the provisions of the Act and therefore deserves to be deleted. It be held that the Appellant be granted just and proper relief in this respect. 3. Without prejudice to Ground No. 1 and 2 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held....
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....ri Shirish Bhanudas Ranpise recorded u/s 131 and Shri Annuj Goel has categorically stated that he does not agree with the statement given by Shri Shirish Bhanudas Ranpise. He has stated that there is no such procedure of his meeting with any customer as it is not possible to meet so many customers on daily basis. The Ld. Counsel for the assessee submitted that the same officer who has recorded the statement of Shri Shirish Bhanudas Ranpise has recorded the statement of Shri Annuj Goel. Referring to page 56 of the paper book, he drew the attention of the Bench to the reply given by Shri Shirish Bhanudas Ranpise in pursuance of question No.9 wherein he has categorically stated that all the negotiations of actual sale price and the price as per agreement are decided by the Director and the customers, and he being the head of sales and marketing, has to play his role accordingly. He submitted that the statement of Shri Shirish Bhanudas Ranpise was recorded u/s 131 and the provisions of section 132(4A) are not applicable to the assessee. The Revenue has not taken the statements of any of the buyers to prove that they have in fact given any on-money over and above what is mentioned in th....
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....bad High Court in the cases of Dr. Roop vs. CIT (2012) 20 taxmann.com 205 (All) and Dr. V.S. Chauhan vs. DIT (Inv) (2011) 12 taxmann.com 230 (All), the Ld. Counsel for the assessee submitted that the Hon'ble High Court in the said cases has held that the exercise of power u/s 131(1A) is contemplated in a situation anterior to exercise of power under section 132. 23. Referring to the decision of Delhi Bench of the Tribunal in the case of Pradeep Kumar Sharma vs. DCIT (2021) 132 taxmann.com 41 (Delhi-Trib) and Bangalore Bench of the Tribunal in the case of DCIT vs. H. Omkarappa (HUF) vide ITA No.1634/Bang/2019, the Ld. Counsel for the assessee submitted that the Tribunal in the said cases has held that the additions could not be made merely on the basis of statement recorded u/s 131 of the Act when no corroborative material is unearthed during search. 24. Referring to the decision of Pune Bench of the Tribunal in the case of Chander Mohan Mehta vs. ACIT (1999) 71 ITD 245 (Pune) and Mumbai Bench of the Tribunal in the case of DCIT vs. Kanakia Hospitality (P.) Ltd. (2019) 110 taxmann.com 4 (Mumbai-Trib.), the Ld. Counsel for the assessee submitted that the Tribunal in the said de....
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....6 taxmann.com 239 (Pune) iv) Kush Corporation vs. ACIT vide ITA No.357/Sur/2022 v) CIT vs. Balchand Ajit Kumar (2004) 135 Taxman 180 (MP) vi) Madanlal Narendrakumar (HUF) vs. ACIT (2003) 131 TAXMAN 41 (Indore) (Mag.) 28. He accordingly submitted that the addition made by the Assessing Officer and sustained by the Ld. CIT(A) be deleted. 29. The Ld. DR on the other hand strongly supported the order of the Ld. CIT(A) sustaining the addition made by the Assessing Officer. He submitted that the evidences were gathered during the course of search showing that the assessee was indulging in receipt of on-money. The statement of the sales person Shri Shirish Bhanudas Ranpise was confronted to the director of the assessee firm and he has simply denied, which is only a bald denial. The assessee firm has never denied the evidences those were gathered. Referring to the decision of the Hon'ble Bombay High Court in the case of Harish Textile Engrs. Ltd. vs. DCIT (2015) 379 ITR 160 (Bom) he submitted that the extrapolation on the basis of loose papers found during the course of search was upheld by the Hon'ble Bombay High Court. Referring to the decision of the Hon....
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....e us by both sides. We find the assessee is a firm engaged in business of real estate. During the course of search action u/s 132 of the Act conducted on 10.01.2019 certain loose papers were found and seized from the office premises of the assessee. When these documents correlated with entries found in other documents and registered deed, it was noted that the assessee firm has involved in accepting on-money in cash for booking/selling of flats/shops. Further in the statement recorded u/s 131 of Shri Shirish Bhanudas Ranpise, sales manager, he had admitted that the cash component was accepted in the bookings of flats/shops. Since the assessee did not offer any income on account of such on-money received, the Assessing Officer in the order passed u/s 153A r.w.s. 143(3) made addition of Rs. 45,17,500/- being the on-money received in respect of shop No.B-09 sold to Shri Ramesh Kumar Chaudhary. Since the assessee was indulging in receipt of on-money, the Assessing Officer held that the assessee must have received on-money on account of sale of various other shops during the year. Since the assessee has sold 4 more shops and the component of on-money varies from shop to shop as per the ....
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.... Rajendra Sitaram Goel, Ammul Rajendra Goel, Goel Ganga India Pvt. Ltd., Goel Ganga Developers (India) Pvt. Ltd., Goel Nitron Construction, Goel Ganga Promoters, Goel Ganga Space LLP, Goel Eisha Capitals, Goel Ganga Infrastructure and Real Estate Pvt. Ltd., Geeta Construction Pvt. Ltd., Ganga Housing Pvt. Ltd., Shree Balaji Realty, Shri Siddhivinayak Developers, Meenamani Ganga Builder LLP, Ganraj Homes LLP, Shree Balaji Associates, Goel Properties, Kappa Realtors LLP on 12/01/2019. Statement commenced on 12/01/2019 at 08:30 PM. OATH ADMINISTERED "I swear in the name of God that I will speak truth, only truth and nothing but the truth. I further confirm that I have been made aware of the consequences of making a false statement under oath" Before Me Deponent Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) Q.1 Please identify yourself. Ans. My name is Annuj Umesh Goel s/o Shri late Umesh Sita....
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.... partner of M/s Meenamani Ganga Builder LLP. Ans. I along with my brother Ankit Umesh Goel, am looking after whole and sole business activities of M/s Meenamani Ganga Builder LLP, with the help of my staffs. I would also like to state that I was also looking after the business activities of M/s. Shri Siddhivinayak Developers, Shree Balaji Associates and Shree Balaji Realty. Q.6 Please state what type of Books of accounts and documents are maintained at this premise? Also provide details of all the concerns whose books of accounts are maintained at this premise. Ans. At this premises, we maintain all the books and accounts of M/s Meenamani Ganga Builder LLP, M/s. Shri Siddhivinayak Developers, and Shree Balaji Realty. Apart from this, all the other documents related to bookings, project voucher and receipt are maintained at this office. Books of accounts are maintained in tally accounting software. Customer booking forms, demand and receipts from customers are maintained in ERP. Q.7 Please give details of all the bank accounts maintained by you and your firms/company/proprietary concerns. Ans. I am providing details of all bank account ma....
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....nder the circumstance please explain which method of accounting is being followed by you for sales/revenue recognition. Ans. I am following percentage completion method for sale/revenue recognition. Q.12 Please provide project wise working of percentage completion method in regards to above mentioned four projects. Ans. I am providing the details of percentage completion of projects as annexure 'E' to this statement. Q.13 On verification of the working of percentage completion method applied by you, it is noticed that the total net profit to be recognized for all above four projects comes to Rs. 4,23,00,549/-. Please comments. Ans. Yes, I confirm that the total net profit to be recognized for FY 2018-19 is Rs. 4,23,00,549/-. I am declaring herewith the same as additional income for FY 2018-19. The bifurcation of the above state declaration is: Sr No. Project Firm Name Financial Year Additional income 01 Fernhill Meenamani Ganga Builder LLP 2018-19 0 Sd/- Sd/- (Authorized Officer) ccc(Annuj Umesh Goel) 02 Florentina Shree Balaji Realty 2018-19 56,37,525/- 03 Amber Shri Si....
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....23,00,549/- as my additional income for FY 2018-19 relevant to AY 2019-20. I will pay due taxes their on within prescribed time limit as per law in presence. Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) VERIFICATION "Whatever stated above is correct and true to the best of my knowledge and belief. The above statement has been given by me voluntarily in sound state of mind, without any coercion, threat, duress and undue influence. I confirm that I have gone through the statement, understood in and found that whatever stated by me has only been correctly recorded." Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel)" 37. A perusal of the statement so recorded shows that after denial of Shri Anuj Goel regarding the receipt of any on-money from any of the customers, no effort has been made by the Revenue to confront Shri Anuj Goel regarding the d....
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....8-19 as mentioned by the Assessing Officer, therefore, there is no question of receipt of any on-money for the assessment year 2018-19. Thus, no addition is required to be made. 44. So far as the assessment year 2019-20 is concerned, the assessee has sold shop Nos.D-04, D-05 and D-07 and the agreement value as per booking forms differ from other booking forms. We find in respect of shop No.D-04, the agreement value is Rs. 55,04,000/-, booking form -1 shows figure of Rs. 44,75,700/- and booking form-2 shows the figure of Rs. 56,84,000/-. In our opinion, higher of the booking forms should be considered as the amount of consideration and after deducting the agreement value of Rs. 55,04,000/- the difference of Rs. 1,80,000/- has to be added in respect of shop No.D-04. Similarly, for shop No.D-05, the agreement value is Rs. 43,52,000/- whereas booking form-1 shows the figure of Rs. 35,76,600/- and booking form-2 shows the figure of Rs. 45,32,000/-. Therefore, addition of Rs. 1,80,000/- for Shop No.D-5 has to be made. Similarly, in respect of shop No.D-07, we find the higher of the booking forms shows the figure at Rs. 56,84,000/- whereas the agreement value as per document shows the ....