TMI Blog2021 (7) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee herein by following 12% thereof from the order of Hon ble Income Tax Settlement Commission. Accordingly, we direct the ld. AO to add only 12% of on-money receipts as undisclosed income of the assessee for the year under consideration. - ITA No.2965/Mum/2019, ITA No.2972/Mum/2019, ITA No.2973/Mum/2019 And ITA No.2974/Mum/2019 - - - Dated:- 14-7-2021 - Shri Mahavir Singh, Vice President And Shri M.Balaganesh, Accountant Member For the Assessee : Shri Vijay Mehta For the Revenue : Shri Rajeev Harit Shri Brajendra Kumar ORDER PER M. BALAGANESH (A.M): ITA No.2965/Mum/2019 A.Y.2010-11 This appeal in ITA No.2965/Mum/2019 for A.Y.2010-11 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-54/IT-10385/DCCC-6(2)/2017-18 dated 02/02/2019 (ld. CIT(A) in short) against the order of assessment passed u/s.153C r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 29/12/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle 6(2), Mumbai (hereinafter referred to as ld. AO). 2. The issues raised in ground No. 1 2 are only with regard to the aspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Co-ordinate Bench of this Tribunal in the case of sister concern of the assessee in the case of Tulip Land and Developers Pvt. Ltd.,vs. Dy. CIT in ITA No.2980/Mum/2019 dated 10/02/2021 wherein the profit element was determined at 12% of on-money to be brought to tax. The relevant operative portion of the said judgment is reproduced hereunder:- 8. We have heard the rival submissions of both the parties and perused the material on record. The undisputed facts are that the assessee is found to have received on money from the buyer of flats/properties on the basis of documents which have been found during the course of search and the on money received by the assessee in two years A.Y. 2014-15 2015-16 of ₹ 32,50,000/- and ₹ 1,50,00,000/- respectively. However, we find that in the assessment the AO has added ₹ 2,15,00,000/- which is a typographical error and correct amount is ₹ 1,50,00,000/-. We have also cross verified this from the order of settlement commission and submissions before the Ld. CIT(A) who has partly allowed the appeal of the assessee by sustaining the addition equal to 25% of the on money received by the assessee. The Ld. A.R. has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.1 In M/s M/s Guruprerana Enterprises (supra) the following questions of law were raised before the Hon'ble Bombay High Court: a) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the addition holding that the assessee has not actually received any cash receipts and the declaration made by the partner of the firm was towards total sale receipts and not towards income for the year? b) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the addition holding that the project completion method was applicable on account receipts of ₹ 5 crores even though the assessee had not accounted the receipts in the regular books of accounts? c) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the addition of ₹ 5 crores itself had failed to follow the norms of accounting standard regarding disclosure of receipts as per the AS-7 and as per section 145 of the I.T. Act, 1961? The Hon'ble High Court held as under: Counsel for the parties state that the income which is disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be taken from that one taken by the settlement commission. The operative part is reproduced as under: 6. We have already noticed that the Hon ble Settlement Commission has accepted the contentions of the assessee that it has incurred expenses outside the books of accounts and further the impounded materials also show that many expenses have not been accounted for. Under these set of facts, the Hon ble Settlement Commission has accepted the contention of the assessee that only net profit should be estimated on the amounts received outside the books of account. Accordingly, the Hon ble Settlement Commission has estimated the net profit at 12% of thereon. The assessments of AY 2005-06 and also the year before us, viz., AY 2006-07 have been taken up for scrutiny only on the basis of survey operations and hence the facts prevailing in both the cases are identical in nature. Hence, we do not find it necessary to take a different view from that one taken by the Hon ble Settlement Commission. Accordingly, we are of the view that the Ld CIT(A) was justified in estimating the profit at 12% (it is stated that the rate of profit was wrongly mentioned as 17% in the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. ITA No.2972/Mum/2019 A.Y.2009-10 6. This appeal in ITA No.2972/Mum/2019 for A.Y.2009-10 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal No.CIT(A)-54/IT-122/DCCC-6(2)/2016-17 dated 11/02/2019 (ld. CIT(A) in short) against the order of assessment passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 26/12/2016 by the ld. Dy. Commissioner of Income Tax, Central Circle 6(2), Mumbai (hereinafter referred to as ld. AO). 7. The ground Nos. 1 2 raised by the assessee challenging the validity of reopening of assessment was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from Bar and accordingly, the ground Nos. 1 2 raised by the assessee are dismissed as not pressed. 8. The assessee raised the following grounds 3 4 before us. Without prejudice to the above, on merits: B. Addition of ₹ 20.48.291/- as income earned from on money, inflation of expenses and accommodation entries may be deleted 3. The Ld. CIT(A) erred in confirming the addition of ₹ 20,48,291/- being 25% of on money plus a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.1. We find that the ld. AO had mentioned in the assessment order that parallel books of accounts maintained by the assessee evidenced booking of expenses in the form of cheque payment and receiving back cash for the same. The ld. AO even tabulated year wise inflation of expenses where cheque payments were made and cash was received back as under:- Sr. No. AY Amount 1 2011-12 14,51,660 2 2012-13 8,00,000 3 2013-14 21,39,275 4 2014-15 79,37,000 3.2. The inflation of expenses for each of these years has been accepted by the assessee group and the assessee group concerns had approached the Hon ble Income Tax Settlement Commission wherein 12% of this expenditure has been offered by them as income. We find that the ld. AO had sought to add a sum of ₹ 21,39,275/- towards inflation of expenses for the A.Y.2013-14. In response, the assessee stated that no additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on this subject mentioned transaction , being the profit element, which has been already accepted by the Hon ble Income Tax Settlement Commission at 12% vide its order dated 28/06/2018 in assessee s group company cases. We held that the ld. CIT(A) ought to have followed the same in view of identical facts in the assessee herein also. Accordingly, we direct the ld. AO to make an addition @12% of inflation of expenses for the relevant assessment year in line with the direction of the Hon ble Income Tax Settlement Commission in assessee s group company cases. Accordingly, the ground No.1 raised by the assessee is partly allowed and ground No.2 raised by the assessee is allowed. 7. The last issue to be decided in appeal for A.Y.2014-15 is with regard to addition of ₹ 55 lakhs towards on-money. 7.1. We have heard ld. DR and perused the materials available on record. We find that the ld. AO had proceeded to make an addition u/s.68 of the Act towards on-money received by the assessee for sale of flats. It was also submitted by the assessee before the ld. AO that there were certain unaccounted business expenses made by the assessee out of the on-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute that the assessee had incurred certain business expenses out of such on-money which are kept outside the books of accounts. Hence, it will be just and fair that only the profit element embedded on any such undisclosed transaction could be brought to tax on an estimated basis. The assessee had already pleaded that onmoney transactions were offered by the assessee s group concerns @12% of on-money receipts before the Hon ble Income Tax Settlement Commission and the same has been accepted by the Settlement Commission. Hence, the data and information was indeed available with the ld. CIT(A) to have some rational basis to make profit estimation in the hands of the assessee herein by following 12% thereof from the order of Hon ble Income Tax Settlement Commission. Accordingly, we direct the ld. AO to add only 12% of on-money receipts as undisclosed income of the assessee for the year under consideration. Accordingly, the ground No.1 2 raised by the assessee is partly allowed. 9.1. Respectfully following the aforesaid decision, the ground Nos.3 4 are disposed of in view of the above mentioned directions. 10. In the result, appeal of the assessee in ITA No.29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee for this assessment year is similar to the ground No.3 raised by the assessee for A.Y.2009-10 in ITA No.2972/Mum/2019. Hence, the decision rendered for A.Y.2009-10 for ground No.3 would apply with equal force for ground No.2 in A.Y.2011-12 except with variance in figures. 19. The ground No.3 raised by the assessee is only with regard to determination of profit percentage at 12% as per the orders of the Hon ble Income Tax Settlement Commission, which fact is already considered in the aforesaid two grounds. Hence, the ground No.3 raised by the assessee is allowed. 20. In the result, appeal of the assessee is partly allowed. TO SUM UP:- ITA NO. A.Y. Assessee Name Result 2965/Mum/2019 2010-11 Shree Ahuja Properties Developers Appeal of the Assessee is partly allowed 2972/Mum/2019 2009-10 Shri Ahuja Housing Projects Pvt. Ltd., Appeal of the Assessee is partly allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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