TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 2084
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....e case the CIT (A) was right in not considering the fact that the entire on money was admitted by the assessee as its undisclosed income in the statement recorded U/s 132(4) of the Act and such statement was not retracted till filing of return of income. 3. Whether on the facts and in the circumstances of the case, the CIT (A) was right in observing that the entire on money cannot be added to the total income of the assessee and that no fruitful enquiry has been conducted by the AO when the evidence regarding receipt of entire on money was found during the course of search and was admitted by the assessee in the statement U/s 132(4) of the Act and thus there remained nothing to be further enquired by the Assessing Officer." CO No. 02/JP2017 (Assessee's Grounds of appeal): "1.(a) That the learned Commissioner of Income Tax (Appeals) has erred on the facts and in the circumstances of the case and in law in computing the profit of Rs. 29,70,000/- in the on money of Rs. 1,35,00,000/- by applying GP rate of 22%, as against the profit of Rs. 18,90,000/- computed by the assessee @ 14% and thereby sustaining the addition to the extent of Rs.&n....
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....ं क्या-क्या प्रविष्टियाँ हैं तथा किस से संबंधित है? उत्तर उपरोक्त Annexure (Pocket Diary) को मैनें भली भाँति देख लिया है इसमें कुल लिखित Page 12 है। Page No. 1 पर M/s. Kaizen Enterprises Pvt. Ltd के Project Aashirwad Aanandam के Flats की sale पेटे May 2012 में प्राप्त नकद रुपये बीस लाख का विवरण है Page No. 03 पर उपरो....
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.... 13500000/- एक करोड़ पैतींस लाख हमारी Company M/s Kaizen Enterprises Pvt. Ltd. की Scheme Aashrirwad Aanandam के Flats की बिक्री से मई 2012 से Nov. 2012 के बीच प्राप्त नकदी की प्रविष्टियाँ है। प्रश्न 13. कृपया उपरोक्त राशि कुल रूपये 13500000 /- को अपनी नियमित लेखा पुस्तकों से महीनावार मिलान करवायेंð....
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....22.02.2013 reads as under:- "प्रश्न 17 आपके कार्यालय में दिनांक 19.12.2012 को तलाशी के दौरान एक Pocket Diary जब्त की गई थी। जिसे Annexure-AS के Exhibit -16 इन्द्राज किया गया था। जिसमें कुल 1 से 12 पेज है। आपने अपने बयान दिनांक 20.12. 2012 जो कि तलाशी के दौरान कार्यालय मैसर्स काईजन इन्....
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....2381;बर 2012 में प्राप्त रूपये 15 लाख नकद में प्राप्त की प्रविष्टी है जो Flats बेचने के पेटे प्राप्त कुल रूपये 13500000/- (एक करोड़ पैतीस लाख) आपकी Company M/s Kaizen Enterprises Pvt. Ltd @ Complex Aashirwad Anandam के Flats बेचने से प्राप्त On Money चालू वित्त वर्ष की अघोषित आय मानते हुए करारोपण के ë....
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....u/s 132(4) during the course of search proceedings has admitted undisclosed income of Rs. 1.35 Crores and confirmed in the post search enquiry in the statement taken u/s 131 on 22.02.2013. In the statement made above, the assessee has admitted that the amount recorded on the papers of this diary are only the 'On Money' received by it, no element of profit is involved thereof. Further, on the date of search the assessee company has booked all the expenses incurred in its project. No reason has been furnished by the assessee company for non-booking of the said 'On Money' received in the books of account, which he received from Month of May to December for the F.Y. 2012-13 relevant to A.Y. 2013-14. Further, the cases laws relied upon by the assessee are not applicable in this case as the facts and circumstances of the instant case are different." 5. Further, the Assessing Officer held that no set off of any expenses can be claimed against the surrender income and even if the surrender has been retracted partly by the Director of the assessee-company on behalf of his company, it would still be binding on the assessee and in support reliance was placed on various judici....
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.... of sworn statement of the director of the assessee's company recorded u/s 132(4) and in view of the admission made in the said statement, there is no dispute that the assessee has admitted the receipt of the on-money from sale of the flats. It was further submitted that the said admission has not been retracted till date by the assessee company but at the same time, the assessee company has failed to honour the surrender so made while filing the return of income. It was accordingly submitted that there is no infirmity in the order of the Assessing officer where he has brought the whole of the on-money to tax in the hands of the assessee company. It was further submitted that decisions relied upon by the ld. CIT (A) are distinguishable and doesn't support the case of the assessee company. He thus supported the order of the Assessing officer and submitted that the order of the ld. CIT (A) should be set-aside. 9. Per contra, the ld. AR has submitted that the sole basis for assessing the entire on-money receipt of Rs. 1.35 crores is the statement of the director of assessee company u/s 132(4) and subsequent reaffirmation of such income in statement u/s 131 recorded in post sea....
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....e. Therefore, solely on the basis of diary and the statement of assessee, without bringing any material on record that assessee has capitalized such amount in the books or there is a corresponding asset/ expenditure in relation to the same, no addition can be made by treating the receipt as income. 11. The ld. AR further submitted that the assessee under the facts & circumstances of the case, accepted the receipt of on-money but since receipt is not equal to income, he applied reasonable g.p. rate of 14% considering the past history of the case and offered Rs. 18,90,000/- in the return of income. In the following cases, it is held that on-money/ sales itself cannot be added to income but only a reasonable g.p. rate on such on-money/ sales can be assessed as income:- * Jay Builders Vs. ACIT 215 Taxman 50 (Guj.) * ITO Vs. Anand Builders 265 ITR 37 (St.) (SC) * Abhishek Corporation Vs. DCIT 63 TTJ 651 (Ahd.) * CIT Vs. President Industries 258 ITR 654 (Guj.) * Mohan SadhaniVs. CIT 304 ITR 52 (MP) * CIT Vs. Balchand Ajit Kumar 263 ITR 610 (MP) * Agrawal Motors Vs ACIT 68 ITD 407 (Jab) * ITO V. Gurubachan Sin....
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....oney. Similar finding has been recorded by the Assessing officer and which has not been disturbed by the ld. CIT (A) and we see no reason to disturb the said findings. Therefore, in absence of any retraction and where the assessee continues to maintain his position that it still abides by the statement, the contention of the ld. AR has no legal leg to stand where he contends that the Revenue authorities have exerted undue pressure and obtained surrender of income. In absence of any retraction, the assessee is therefore clearly at fault in not declaring the undisclosed income fully in its return of income. 14. Having said that, let's now examine another contention of the ld. AR. The ld. AR has contended that notwithstanding the fact that the assessee company has accepted the receipt of on-money, given that receipt is not equal to income and it is income which can be brought to tax, income so determined by the assessee company by applying gross profit rate of 14% should have been accepted by the Assessing officer and also should not be disturbed by the ld. CIT(A). The said proposition may be applied in a situation where the whole of the transaction relating to sale of flats are no....