TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 1475
X X X X Extracts X X X X
X X X X Extracts X X X X
....e filed by the Revenue in case of M/s. M. Poonam Developers LLP and three appeals filed by Revenue in case of M/s. M. Poonam Developers (Firm). The various issues raised by the Revenue in these two sets of assessee`s appeals are common and identical, therefore since, the issues involved in all the appeals and cross objections are common and identical; therefore, these appeals and cross objections have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. The facts narrated in ITA No. 284/SRT/2022 for AY. 2018-19 have been taken into consideration for deciding these appeals en masse. 3. Although, appeals filed by the Revenue and Cross objections filed by the assessee, contain multiple grounds of appeal, however, at the time of hearing we have carefully perused all the grounds raised by Assessee and Revenue. We find that most of the grounds raised by the Revenue and Assessee are either academic in nature or contentious in nature. However, to meet the end of justice, we confine ourselves to the core of the controversy and main grievances of the Revenue and Assessee as well. With this background, we concise and summarise the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Ld. CIT(A) has erred by giving direction to tax the 'on-money' receipt as regular business income and not to treat the same as unexplained cash credit under section 68 of the Act, which is to be taxed under the provisions u/s 115BBE of the Act, despite the fact that the assessee failed to substantiate the 'on-money' receipts." (iv) Ground No. 1 raised by the Revenue in ITA No. 318/SRT/22 for A.Y.2017-18, ground No. 1 raised by the Revenue in ITA No. 319/SRT/22 for A Y 2018-19 and ground No. 1 raised by the revenue in ITA No. 320/SRT/2022 for A.Y. 2019-20. "On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in re-calculating the total on-money on booking of the flats during the year under consideration to Rs. 1,60,26,408/- as against the 'on-money' calculated of Rs. 9,57,99,600/- by the assessing officer on the basis of incriminating impounded material." (v) Grounds of appeal No. 2 to 5 raised by the Revenue in ITA No. 318/SRT/2022 for A.Y. 2017-18, ground Nos 2 to 5 raised by the Revenue in ITA No. 319/SRT/2022 for A.Y. 2018-19, and ground Nos. 2 to 5 raised by the Revenue in ITA No. 320/SRT/2022 for A.Y. 2019-20. "The Ld. CIT(A) erred in restric....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 5. The grounds raised by the assessee in all cross-objections are similar and identical except variance of amount. 6. All the cross objections filed by the assessee are barred by limitation by 3 days. The assessee has moved a petition requesting the Bench to condone the delay. We heard the party on this preliminary issue. Having regard to the reasons given in the petition, we condone the delay and admit all the cross objections for hearing. 7. Now we shall take these above concise and summarised grounds of appeals of Revenue one by one. Summarised and concise ground No. (i) is reproduced below for ready reference: (i) Ground No. 1 to 3 raised by Revenue for AY. 2016-17, in ITA No. 284/SRT/2022, ground Nos. 1 to 3 raised by the Revenue in AY. 201819, in ITA No. 285/SRT/2022, ground Nos. 1 to 3 raised by Revenue in AY. 2019-20 in ITA No. 286/SRT/2022. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition of Rs. 2,61,02,000/- made by the Assessing Officer on account of unaccounted on-money to Rs. 20,88,1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e partners of the assessee-firm, Mr. Rajesh Ahir who has categorically admitted and accepted in his statement during the course of survey proceedings that 2 columns against each of the party A and B, out of which column B represents cash i.e. 'on-money' and column A represents cheque. Accordingly, based on the incriminating material found during the course of survey proceedings and also based on the admission made, the actual receipts by the assessee amounting to Rs. 2,61,02,000/- should be brought to tax for the year under consideration. 9. In this connection, the assessee has filed its detailed reply and written submission, which are reproduced below: "Only profit element can be added as against total receipts. 1. Merely on the basis of impounded materials total gross receipts received without taking into consideration the fact that only profit element out of the net receipts is chargeable to tax and not the gross receipts the proposed addition cannot be made. From the impounded material also it is clearly apparent that material gives details about gross receipts taken by assessee firm. As far as receipts in the books are concerned, the same is duly given benefit of expenses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITR 63(Guj), it was held as, "Hence, in absence of any material on record to show that there was any unexplained investment made by the assessee which was reflected by the alleged unaccounted sales the finding of the Tribunal that only the gross profit on the said amount can be brought to tax does not call for any interference. The Tribunal was, therefore, justified in deleting the addition of Rs. 10,85,003/- made on account of unaccounted cash sales." 5. In the decision recently decided by jurisdictional ITAT (Surat Bench) in the case of M/s Jay Kesar Bhavani Developers Pvt Ltd. vs. ITO reported vide 2020 TIOL-357-ITAT-Surat, under identical circumstances profit rate @ 6% was adopted and addition was restricted. The Tribunal observed as, "In the light of above discussion, and respectfully following the judgments of Hon'ble jurisdictional High Court as discussed above and also of Tribunal, we of the considered opinion that Ld. CIT(A) was not justified in confirming the addition of entire on-money receipts amounting to Rs. 4,72,02,368. Therefore, only estimated net profit is required to be taxed. We find that the assessee has shown net profit at 4.55% for the assessment ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsumption of raw material would be used for manufacturing raw material which process would require, depending on the nature of the product, deployment of manpower and machinery, consumption of electricity and even other ingredients. Essentially, on the basis of the estimation of excess consumption of raw material the possible profit of the assessee would have to be worked out for making actual additions. In this background, we must view the observations of the Commissioner of Income-tax (Appeals), who while adopting the excess consumption of the unfinished product at 20 per cent of the gross sale applied the gross profit rate of 35 per cent, averaging three year of the gross profit rate in the case of the assessee. Essentially, therefore, on the basis of the available material on record the Commissioner of Income-tax (Appeals) has attempted to tax the income of the assessee arising out of the unaccounted consumption of raw material which would result into unaccounted sales of the finished products." 8. In the case of ITO vs. Sai Krupa Construction Co. reported vide 13 SOT 459, Mumbai Bench of ITAT has held as, "The Commission \er (Appeals) had properly taken into account all th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... buyer. For this proposition, we are relying on the decision of Hon'ble jurisdictional High Court in the case of CIT (Central), Surat v. Happy Home Corporation reported vide [2018] 94 taxmann.com 292 (Gujarat). SLP against the said judgment is also dismissed by the Apex Court. 11. In the given case, your honour has alleged on money on ad hoc basis, however it may kindly be noted that some units are not even booked or sold and no amount is mentioned against the same and in some cases only advance amount is received. 12. On the basis of the above detailed submission, the proposed addition may kindly deleted or reduced." 10. However, the assessing officer rejected the contention of the assessee and observed that the cash components (on-money) are not part of the business income and the same has never been disclosed in its books of accounts. The assessee has booked and claimed all the expenses in its books of account and only during the survey proceedings, the receipt of cash amount as on-money has come to the notice of the department. Mr. Rajesh Ahir, the partner of the assessee-firm has also accepted the fact and hence, there is no question arises to take only profit compone....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The ld CIT(A) noted that it is a fact which is not denied by the assessee that during the course of survey, incriminating material evidencing receipt of on-money relating to the impugned assessment year from project "Orion Villa" amounting to Rs. 2,61,02,000/-were found. The said receipts are in cash which are not accounted in the regular books of account. This has been confessed by Mr. Rajesh Ahir, the partner of the assessee firm. Thus, once the receipt of on-money is accepted the same needs to be brought to tax additionally as the same have not been shown in the books of account maintained by assessee. However, ld CIT(A) observed that the equation arises is whether, such on-money has to be taxed fully or a portion of the on-money has to be taxed as income. The ld CIT(A) noted that in deciding the assessee's case for A.Y 2017-18 on identical facts, which was also completed taking into consideration the incriminating material found during the course of survey held that only 20% of such on-money receipts should be taxed as income. The findings of CIT(A) for A.Y 2017-18 in assessee's own case are as under: "5.2 The fats of the case have been carefully considered. This is undispute....
X X X X Extracts X X X X
X X X X Extracts X X X X
....received "on-money" from customers on sale of flats (Villa), the details of the same are as follows: Villa Type No. of Villas Amount of on-money receipt A76 1 44,00,000/- B1 4 46,50,000/- B2 9 1,16,95,000/- B4 9 50,31,000/- Total 2,57,76,000/- The Assessing Officer further mentioned in para No. 5.1 that there is no dispute with regard to the fact of receipt of "on-money" from sale of units. This clearly shows that amount of Rs,.2,57,76,000/- is business receipts, and since these are business receipts therefore these receipts are taxable as per the profit declared by the assessee in audited books of account. These facts have been admitted by one of the partner of the assessee-firm, Mr. Rajesh Ahir, who has categorically admitted and accepted in his statement during the course of survey proceedings that two column against each of the party A and B, out of which column B represents cash i.e, "on-money" and column A represent money received through cheque. The Assessing Officer mentioned these details on page No. 4,5 &7 of the assessment order. Hence it is proved by the facts stated by the Assessing Officer in the assessment order that additions of total gross receip....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee is partly allowed." 16. The ld CIT(A) analysed the judgment of Jurisdictional ITAT Surat in assessee own case, as mentioned above, and ld CIT(A) noted that it is clear that only 8% of the 'on-money' receipts were treated as income of the assessee by Hon'ble ITAT as against the 20% held by the CIT(A). The ITAT in its order for A.Y 2017-18 in the assessee's own case have held that the rate of 8% is held to be the rate applicable to the assessee on the basis of peculiar circumstances and should not be held as a precedent for any preceding or succeeding assessment years. In the case of the assessee, the assessments have bene made from A.Y 2015-16 to 2019-20, on the basis of survey u/s 133A of the Act and during the course of the said survey, evidences of receipt of on-money were found and impounded. The additions in all these 5 assessment years have been made on the basis of incriminating material found during the course of survey. Therefore, the facts and circumstances which are applicable to A.Y. 2017-18 are appliable to the impugned assessment year also. The fact of the assessee's case are totally identical to the facts of the A.Y 2017-18. Hence, following the decision o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted the findings of the assessing officer and stated that set off of IDS declaration should not be allowed to the assessee. Whereas, ld Counsel defended the order passed by the ld CIT(A). The ld Counsel submitted that during the appellate proceedings, the assessee argued before the ld CIT(A) that he (assessee) has made a declaration under the Income Declaration Scheme of 2016, a total income of Rs. 1,00,00,000/- as "sundry business receivables'. The said declaration has been made for A.Y 2015-16 for Rs. 25,00,000/- and A.Y 2016-17 Rs. 75,00,000/-. It was submitted that the assessee has only one project i.e. "Orion Villa" during the entire period of A.Y 2015-16 to 2019-20 and the declaration made by the assessee is towards the receivables from the said project, as assessee does not have any other source of income. Therefore, ld CIT(A) mentioned in his order that there is merit in the submission of the assessee. The IDS form filed shows that the declaration has been made against the business receivables and the 'on-money' receipts is from the said business and hence, the assessee is entitled for benefit of receivables declared in IDS 2016 for the declaration of Rs. 25,00,000/- made f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant is entitled to get the benefit of deduction of expenses. 3. Further, percentage of profit is to be calculated on the basis of past books of assessee or other identical comparable firm of nearby area having same volume of transactions as assessee for same assessment year rather than simply relying on the previous decisions of Hon'ble Tribunal or High Court which is completely unconnected to the assessee having different assessment year, business scale and geographical location compared to that of the appellant. Even in case of assessee for A.Y.2017-18 (ITA No. 15/SRT/2021). Hon'ble this Bench has restricted the addition to 8% of the gross receipts. 4. The appellant is rightly allowed to set off the amount declared in Income Disclosure Scheme (IDS) at the time when the firm as well as the project was at very initial stage against the profit on on-money received to avoid double taxation of same income. 5. In the written submission filed by the Department, it is even accepted that the declaration made in the Income Disclosure Scheme, 2016 is under the head "Sundry Business Receivables" and hence, it is estimated income. Further, in the alleged years, the Assessing Of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he appellant has only one project i.e. "Orion Villa" during the entire period of A.Y. 2015-16 to 2019-20 and the declaration made by the appellant is towards the receivables from the said project as appellant does not have any other source of income. The IDS form filed shows that the declaration has been made against the business receivables and the on-money receipts is from the said business and hence, as there is a direct nexus between the income declared in the IDS form and the income for the years under consideration, the appellant is entitled for benefit of receivables declared in IDS, 2016. 8. Appellant also relies on the decision of Hon'ble Tribunal, Kolkata Bench in the case of ACIT, Circle 2(1), Jalpaiguri vs Shri Bholanath Agarwal (ITA No. 46/Kol/2021), wherein identical issue was under consideration and it was held that: "14. As regards the claim of set off of Rs. 1,09,02,880/- it is not disputed at the end of the Revenue that the assessee made a disclosure of undisclosed income in IDS, 2016 at Rs. 1,09,02,880/- which is reflected in Form No. 1 issued by the Department placed at page 19-30 of the paper book and supports this claim of the assessee that for AY 2011....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... his proprietorship concern, M/s.Agarwal Trading Co. and stocks of his partnership firm, Laxmi Cotton Industry are kept and stored in the same godown having 3(three) different and distinct parts by way of brick wall partitions. In one part of the godown, the stocks of the assessee's proprietorship concern are kept and the raw material 7 finished goods of his partnership firm, Laxmi Cotton Industry are kept in the other two parts of the same godown. It is also pertinent to mention here that the impounded books as per BNA/2 were written and completed only up to 30.06.2015. The stocks of Rs. 30,30,432/- of Laxmi Cotton Industry as per Page 12 of BNA/2 was also the stock as on 30.06.2015 as per books were written and completed only upto 30.06.2015. The stock summary printed on 17.07.15 by the survey team putting date from 01.04.2015 to 11.07.2015 was auto generated print out from Tally software of the Laxmi Cotton Industry. As the books was completed up to 30.06.2015 in Tally software of the Laxmi Cotton Industry, naturally the stock summary so printed by the Department was for the period 01.04.2015 to 30.06.2015 and not 01.04.15 to 11.07.15. The stock as on 17.07.2015 of the Laxmi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a disclosure of Rs. 1,09,02,880/- under IDS on account of his undisclosed business income. The income of Rs. 1,09,02,880/- so disclosed under IDS had also been capitalized by the assessee in his books of account. All taxes on undisclosed income of Rs. 92,03,181/- and Rs. 1,09,02,880/- have duly been paid from time to time and duly recorded in the regular books of the assessee. Your honour may find in the books of the assessee produced herewith that all the purchases and sales are duly recorded and there was no deficiency of cash or capital in the book of the assessee. Hence, no further addition should be made on account of undisclosed stock." 11. Further, we notice that in the trading and profit & loss account for the period 01.04.2015 to 18.07.2015 the assessee has shown closing stock at Rs. 3,01,59,910/-. Now when the matter travelled before ld. CIT(A) the following reconciliation statement was filed by the assessee: "Details of additions made by the Ld. A.O.: Value of Stock as on 18.07.2015 (Survey) (Accepted by the Ld. A.O.) - Rs. 3,06,61,938/- Source of Investments as explained by the Assessee 1) As per regular books of account (disclosed capital) (Accepted by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....allowed the claim of set off of the assessee to explain the discrepancy found in stocks in survey. As the fact of the case of Balaram Saha vs. CIT squarely applies to the case of the appellant in hand, the claim of set-off of Rs. 91,98,488/- is allowed and the addition of Rs. 91,98,488/- is hereby deleted. Ground No. 3: Claim for set-off of Rs. 1,09,02,880/-: The appellant had declared his undisclosed incomes up to 31.3.2015 for Rs. 1,09,02,880/-under IDS 2016 and capitalized the said undisclosed income in his books of account for assessment year 2016-17. The AO has stated in his order that capitalization of the amount of disclosure made under the scheme IDS 2016 is not allowable u/s 188 of the Income Declaration Scheme 2016. The AO has further stated in his order that declaration is not admissible in evidence against declarant in the case of scrutiny assessment proceedings for the asst year 201617 u/s 192 of the Income Declaration Scheme, 2016. The AO has disallowed the claim of set-off of the appellant by further stating that the survey was conducted on 18.7.201.5. whereas the declaration under IDS 2016 had been made on 23.9.2016. I have gone through the sections of 188 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the Ministry of Finance clearly says that the income disclosed under the Scheme for an earlier assessment year can be taken into account to explain the transactions in assessment proceedings for subsequent years. So, date of declaration is irrelevant as per circular and also as per the ratio laid down by the jurisdictional High Court (Calcutta High Court) in-the case of Balaram Saha vs. CIT, I.T. Appeal No. 319 of 2003, date 19.04.2011. In view of the Finance Act, 2016, Income Declaration Scheme 2016 and Circulars issued by Ministry of Finance, the appellant's claim for set-off of Rs. 1,09,02,880/- is hereby allowed and the addition of Rs. 1,09,02,880/- made by the AO is deleted." 13. Now, from perusal of the above details as well as the finding of ld. CIT(A) and the reconciliation statement submitted by the assessee, we find merit in the finding of ld. CIT(A) on considering the fact that firstly, regarding the set off of Rs. 92,03,181/- the addition was made in the hands of the assessee in the assessment order for AY 2011-12 vide order dated 19.02.2016 framed u/s 147 r.w.s. 143(3) of the Act. This assessment was completed after the date of survey i.e. 18.07.2015 but before t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stock at Rs. 5,02,028/-. Thus, to conclude, we hold that addition for undisclosed stock at Rs. 2,06,08,009/- has rightly been deleted and the finding of ld. CIT(A) is confirmed. Thus, ground Nos. 1, 2 & 4 raised by the Revenue are dismissed. 17. As regards ground No. 3 for undisclosed cash of Rs. 8,24,000/- is found during the course of survey but not offered to tax in the income tax return, we notice that the assessee has claimed that after preparing the cash book and also considering the statement given during the course of survey, it was noticed that a total cash of Rs. 9,85,730/- was found by the survey team. Cash balance as per the cash book of the partnership firm M/s. Laxmi Cotton Industry was found of Rs. 1,61,733/-. Though the cash book of the sole proprietorship concern of the assessee M/s. Agarwal Trading Co. was also lying at the business premises wherein cash balance of Rs. 8,24,093/- was apparent in the cash book but due to stress and bewildered state of mind, the assessee failed to submit before the survey team about the status of cash in hand held with M/s. Agarwal Trading Co. and for this reason the difference of Rs. 8,24,000/- was offered to tax as excess cash. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....action made by the assessee during assessment. But, the ITAT relied on the decision of Apex Court in S. Khader Khan & Sons (Supra) and allowed the appeal of the appellant. Now it is well settled position of law that confession made by the appellant during survey is not conclusive and it is open to the appellant to establish that the same was not true. Statements recorded in survey proceedings can be retracted in assessment proceeding, such statements cannot be the sole basis for making the addition. Where no defect in books of account is found in assessment, merely because an incorrect offer had been made by the appellant during survey, that cannot stop him to correct his mistake in assessment. The appellant's explanation and books of account had not been rejected by the Assessing officer, but he was of the view that the statement recorded under oath during survey cannot be retracted at assessment stage. The Supreme Court of India in CIT us. S. Khader Khan & Sons has ruled that survey does not empower the ITO to examine any person on oath and the statement recorded u/s 133A has no evidentiary value. Respectfully following the decision of the Apex Court, the addition made by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under IDS, 2016 made by the assessee, the assessee has mentioned that he is making disclosure on account of 'onmoney' received or to be received from the customers by selling flats of his particular project. Therefore, such 'on-money' should be assessed under the normal provisions of the Act and not under section 115BBE of the Act. For this proposition, we rely on decision of Gauhati Bench of Tribunal in case of Abdul Hamid V. ITO reported vide 117 Taxmann.com 986 (2020), wherein it was held as follows: "Our view is further fortified by the Judgment of the Coordinate Bench of Mumbai in the case of ACT Central Circle-13 Mumbai v. Rahil Agencies, order dated 2.3 November, 2016 wherein it was held that section 115BBE does not apply to business receipts/business turnover. The findings of the Coordinate Bench are given below: "We have considered rival contentions and found that by applying provisions of Section 115BBE the assessing officer has declined set off of business loss against income declared during the course of survey/search. The provisions of Section 115BE are applicable on the income taxable under section 68, 69, 69A, 69B, 69C or 69D of the Act. The income declared by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om the incriminating material the same needs to be brought to tax additionally as the same have not been shown in the books of accounts maintained. We note that assessing officer in the impugned assessment year has made the addition of Rs. 9,57,99,600/-. The total sale consideration worked out by the assessing officer is 45018 sq. ft. at the rate of Rs. 2200 per sq. ft. which comes to Rs. 9,90,39,600/-. From the said amount, the assessing officer has reduced Rs. 32,40,000/- being the sale receipts shown by the assessee and added Rs. 9,57,99,600/-. However, this is the total sale price of the flats which includes the on-money. Therefore, ld CIT(A) observed that the entire amount of sale proceeds cannot be brought to tax as the assessee has shown the registered sale value of the said flats in the Profit & Loss account in the years in which sale deeds of the said flats are executed. In the impugned assessment year no sale deed has been executed and only some flats having area of 45,018 sq. ft, have been booked and entire amount of sale has been received. The assessing officer has not identified the particular flat which is booked during the impugned assessment year. The analysis of sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ara No. 8 to 10 of this order. Learned DR for the Revenue reiterated the findings of the assessing officer. Whereas, ld Counsel defended the order passed by the ld CIT(A). In our ground No. 4 the 'on-money' received by the assessee on booking of the flats having area of 45018 sq. ft. was restricted by ld CIT(A) to the tune of Rs. 1,60,26,408/- from Rs. 9,57,99,600/-. Therefore, now the question arises is whether, such 'on-money' has to be taxed fully or a portion of the on-money has to be taxed as income. The ld CIT(A) noted that his predecessor in deciding the case of M/s. M Poonam Developers (sister concern of the assessee LLP) for A.Y.2017--18 on identical facts, which was also completed taking into consideration the incriminating material found during the course of survey held that only 20% of such on-money receipts should be taxed as income. The findings of CIT(A) in the case of M/s M Poonam Developers (sister concern of the assessee LLP) for A.Y. 2017-18 are as under: "5.2 The facts of the case have been carefully considered. This is undisputed fact that the Assessing Officer made additions of Rs. 2,57,76,000/-, which is total gross receipts on sale of flats of the project,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y" from customers on sale of flats (Villa), the details of the same are as follows: Villa Type No. of Villas Amount of on-money receipt A76 1 44,00,000/- B1 4 46,50,000/- B2 9 1,16,95,000/- B4 9 50,31,000/- Total 2,57,76,000/- The Assessing Officer further mentioned in para No. 5.1 that there is no dispute with regard to the fact of receipt of "on-money" from sale of units. This clearly shows that amount of Rs. 2,57,76,000/- is business receipts, and since these are business receipts therefore these receipts are taxable as per the profit declared by the assessee in audited books of account. These facts have been admitted by one of the partner of the assessee-firm, Mr. Rajesh Ahir, who has categorically admitted and accepted in his statement during the course of survey proceedings that two column against each of the party A and B, out of which column B represents cash i.e, "on-money" and column A represent money received through cheque. The Assessing Officer mentioned these details on page No. 4,5 &7 of the assessment order. Hence it is proved by the facts stated by the Assessing Officer in the assessment order that additions of total gross receipts have been made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....allowed." 32. Thus, ld CIT(A) held that from the above analysis it is clear that only 8% of the on-money receipts-were treated as income of the M/s. M Poonam Developers (sister concern of the assessee LLP) by Hon'ble ITAT as against the 20% held by the CIT(A). The ITAT have held that the rate of 8% is held to be the rate applicable to the M/s M Poonam Developers (sister concern of the assessee LLP) on the basis of peculiar circumstances and should not be held as a precedent for any preceding or succeeding assessment years. Hence, considering the decision of the CIT(A) and Hon'ble ITAT as reproduced above, the ld CIT(A) directed the assessing officer to take 15% of on-money receipts as income of the assessee. The addition made to the extent of Rs. 24,03,961/- (15% of Rs. 1,60,26,408/-) was upheld by ld CIT(A). We confirm the findings of ld CIT(A). 33. In the result, Grounds of appeal No. 2 to 5 raised by the Revenue in ITA No. 318/SRT/2022 for A.Y. 2017-18, ground Nos 2 to 5 raised by the Revenue in ITA No. 319/SRT/2022 for A.Y. 2018-19, and ground Nos. 2 to 5 raised by the Revenue in ITA No. 320/SRT/2022 for A.Y. 2019-20, are dismissed. 34. The Concise and summarised gro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....officer has applied the market rate of commercial space to determine the quantum of on-money. However, the addition or computation of income cannot be made on the basis of presumption or assumption. It has to be always on the basis of incriminating material or evidences found during the course of survey/search. Therefore, ld CIT(A) held that in the assessee's case, as the quantification of 'on money' on commercial space of Rs. 4,74,33,000/- was done by the assessing officer applying the market rate without any support of incriminating material, hence the same cannot be sustained. Hence, the additions made on 'on-money' of commercial space amounting to Rs. 4,74,33,000/- was deleted by ld CIT(A). We have gone through the findings of ld CIT(A) and noted that conclusion reached by ld CIT(A) is correct. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 37. In the result, Ground Nos. 8 to 9 raised by the Revenue in ITA No. 319/SRT/2022 for AY. 2018-19, are dismissed. 38. Now, we shall take, assessee`s cross objection No. 13/SRT/....