TMI Blog2017 (3) TMI 1875X X X X Extracts X X X X X X X X Extracts X X X X ..... e by: Shri Smt Asha Agarwal ORDER PER R K GUPTA: These are two appeals of the assessee against the order of the CIT(A) relating to assessment years 2004-05 05-06. 2. Since issues are common in both these appeals, therefore, they are disposed off together by this single order. 3. Ground no. 1 relates to the order passed u/s 153A is bad in law and void-ab-initio was not pressed for both these years; therefore, the same is dismissed as not pressed. 4. The second effective ground is against in sustaining the addition of ₹ 28,65,000/- and ₹ 98,21,100/- respectively for both the years made by the AO on account of suppressed sales calculated @ 30% of the disclosed receipts. 5. Briefly stated the facts in this case are that the assessee is a partnership concern and doing the business of developers and builders. The assessee had acquired a land at Nanda Patkar Road for development of the plot namely Dhanlaxmi Vihar. The assessee is maintaining project completion method. The project Dhanlaxmi Vihar was started in the FY 2003-04 and was completed in the FY 2004-05. As per the facts sheet filed during the appellate proceedings, the revenues from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld lead to an inference that the assessee had received any consideration over and above what was recorded in the books of account. The Special Auditor, after extensively considering the seized material etc., and the books of account have categorically certified that the assessee has recorded the entire amount of sale proceeds in the books of account. The special Auditors have only stated that the sale price as per the agreement was lower than the value determined as per the Stamp Duty Authorities. 7.1. It was further submitted that the AO, at no stage of assessment proceedings called upon the assessee to explain as to whether any cash consideration was received with reference to the sale effected as also did not confront the assessee with any evidence which he was in possession of which could lead to an inference that the sales realization was not fully and truly recorded in the books of account. 7.2. As per the circular issued by CBDT, additions could not be made merely on the basis of the statements recorded u/s 132(4) of the Act. Accordingly, it was submitted that the entire addition made by the AO on account of on money required to be deleted. 8. Without prejudice to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t pages 4 to 7 of his order. 9. After considering the submissions and other material on record, the CIT(A) found that the AO had made the additions on the basis of statement of Shri Pravin Satra of Pravin Satra group concern, who had admitted that in his group, on money charged between 30% to 40% of the projects handled by Satra group. Since the statement has been given by a responsible person of Satra group; therefore, the AO was correct in estimating the addition on account of on money in the case of the assessee, who is partner of the Satra group. The decision relied upon by the assessee were distinguishable and accordingly, the CIT(A) has confirmed the action of the AO for both these years. Now, the assessee is in appeal here before us. 10. The ld counsel of the assessee reiterated its contentions raised before the lower authorities here before us. Copies of the order of the Tribunal decided in earlier years on similar issue were also filed. 10.1. On the other hand, the ld DR strongly placed reliance on the order of the authorities below. It was further submitted that the main responsible person of the Satra group has admitted in having received the on money ranges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown in the books of account. The actual cost of construction should be set off against the profit received by the assessee in the shape of on money and if the difference of ₹ 3.66 crores and ₹ 2.40 crores is taken into consideration then it is seen that there is no profit in the hands of the assessee. However, the ld counsel of the assessee has stated that various Benches of the Tribunal have held that only the net profit of the on money should be taxed. In various orders of the Tribunal the profit ratio ranges between 5 to 12% has been accepted. 12. In the case of Avishkar Enterprises others decided in IT(SS) 126/Bom/1996 and others the Tribunal after discussing the issue in detail have held that 10% of the on money should be taken as net profit of the assessee. 12.1 In the case of Wall Street Construction Ltd decided in 1759/Bom/1995 the Tribunal has held that 12% of the on money should be taken as profit of the assessee. This order was passed on 7.8.1995. 12.2 Similarly in the case of Mrs Mehroo J Irani decided in ITA no.1140/Bom/1989 vide order date4d 26.2.1991, the Tribunal has taken the net profit at 5% f the gross receipts on account of on money. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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