TaxTMI 
TaxTMI 
2026 (9) TMI 236
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....re statutory reasons. Thus, the assessment order deserves to be quashed. 2. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the quantification of alleged-on money at Rs. 1,71,51,000/- without considering the factual errors in the said quantification of alleged On-Money. 3. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the addition of Rs. 25,72,650/- made by the Ld. AO by estimating NP at the rate of 15 percent on alleged On-Money of Rs 1,71,51,000/- without properly appreciating the nature of the seized material and the duplicate jottings contained therein. The said addition and its confirmation are contrary to the facts, excessive and deserves a complete deletion. 4. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the NP rate of 15 percent on alleged On-Money of Rs 1,71,51,000/- without considering the nature of business and prevalent industry rate. The said NP rate is contrary to the law/ facts and is excessive. 5. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred i....
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.... of the buyers, the dates, the amounts and the mode of receipt in cash. The CIT(A) further held that a similar pattern of on-money was found in the other projects of the same group, in which the key persons of the group had accepted the receipt of on-money and had offered profit at the rate of 15 percent. The CIT(A) took the view that, the assessee being the developer of the project, the presumption under section 132(4A) and section 292C of the Act operated against her and had not been rebutted. The CIT(A) also held that the benefit of telescoping had already been granted, as no separate addition of Rs 39,17,495 had been made. On these findings, the CIT(A) upheld the addition of Rs 25,72,650 and dismissed the appeal. The assessee is now in appeal before us. 6. The learned Authorised Representative of the assessee (hereinafter referred to as "AR") assailed the order of the CIT(A). His submissions were threefold. First, he submitted that the addition rests solely on loose sheets seized from the premises of a third party, namely Shri Abhishek Vijayvargiya, and not from the assessee. The seized papers do not bear the name of the assessee or the name of the project, and no corroborat....
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....the assessment, and that the benefit of telescoping had already been granted. It was, therefore, submitted that no interference is called for. 9. We have heard the rival submissions and perused the material on record. 10. Ground No. 1 challenges the validity of the assessment order on the ground that it is against the principle of natural justice. This ground is general in nature. It was not pressed before the CIT(A), where it was expressly stated to be general in nature, and no argument was advanced before us in its support. Ground No. 1 is accordingly dismissed. 11. Ground Nos. 2 to 5 relate to the addition of Rs 25,72,650 made on account of on-money and are taken up together. 12. The first question is whether any addition at all can be sustained on the basis of the seized material. It is well settled that loose sheets, which do not form part of the regular books of account and which are recovered from the possession of a third party, are weak evidence, and that no addition can be made on their strength unless the material is corroborated and is shown to relate to the assessee. The Hon'ble High Court of Karnataka in Sunil Kumar Sharma (supra), following the observ....
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....e addition on account of on-money is sustainable in principle, and to that extent the decisions relied upon by the assessee are distinguishable on facts. 16. As regards the quantification of Rs 1,71,51,000, the assessee has raised the plea of double counting of Rs 5,00,000 and of a sum of Rs 10,00,000 said to have been assessed in the hands of Shri Raj Agarwal, and has also pleaded cancellation of certain bookings. These pleas were raised before the CIT(A) as well. The assessee, however, has not placed on record the cancellation deeds, the proof of refund or the confirmation of the buyers to substantiate these pleas, nor has the assessment record of Shri Raj Agarwal been produced to establish the alleged double assessment. In the absence of such evidence, the pleas remain in the nature of bare assertions, and we are unable to disturb the quantum of on-money adopted by the AO. Ground Nos. 2 and 3 are accordingly rejected. 17. This brings us to the real grievance of the assessee, which is the rate of net profit applied on the on-money. It is a settled principle that, where the unaccounted receipts are in the nature of business receipts, only the profit element embedded in such ....