9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 932 - AT - Income TaxAddition u/s 68 - on money receipts - unexplained credit - Addition being the amount received in cash on booking of flat as per their seized diary - HELD THAT - AO has not investigated the facts if the assessee returned part of cash component to Bhajiyawala Group or not nor verified if remaining of Rs. 21 lacs were offered in the subsequent year or not. AO has brought the entire amount to tax under section 68. So far as other alternative submissions of the assessee before assessing officer as well as submissions made before me, is that only the income component of such alleged on money may be considered for making additions and not the entire money. As find that division bench of this Tribunal while considering the similar issue for taxing the income component of on money in Enn Enn Corporation 2022 (4) TMI 1481 - ITAT SURAT by following the decisions of Tribunal in other case sustained/ upheld the addition of 20% of alleged on money . However, no straight jacket formula can be applied in such case, therefore, direct the assessing officer to restrict the addition to the extent of 25% of Rs. 48 lacs. Ground of the appeal is partly allowed.
Issues:
1. Addition of cash amount received for booking of flat. 2. Treatment of cash amount as income. 3. Estimation of profit on "on money." Issue 1: Addition of cash amount received for booking of flat: The appeal was against the order of the National Faceless Appeal Centre for the Assessment Year 2011-12. The assessee, a builder and developer, had received Rs. 48.00 lacs in cash for the sale of a flat, as per information found during a search and seizure action. The Assessing Officer believed that this income had escaped assessment and reopened the case under Section 147 of the Income Tax Act. The Assessing Officer added the entire amount to the assessee's income, leading to an appeal. The CIT(A) upheld the addition, stating that the assessee's contention to tax only the profit from the "on money" was not acceptable. The Tribunal directed the Assessing Officer to restrict the addition to 25% of the cash amount received. Issue 2: Treatment of cash amount as income: The Assessing Officer did not accept the assessee's explanation that the cash amount was returned by way of a cheque and the remaining amount was offered in the subsequent year. The CIT(A) found the assessee's arguments unconvincing, noting the lack of evidence for imaginary expenses. The Tribunal considered the stand of the Assessing Officer regarding the cash amount and referred to previous cases where only the profit element from "on money" was taxed, not the entire amount. The Tribunal directed the Assessing Officer to make the addition based on 25% of the cash amount. Issue 3: Estimation of profit on "on money": The Tribunal acknowledged the assessee's submission that only the income component of the alleged "on money" should be considered for additions. While previous cases added 5% to 18% of such amounts, the Tribunal in this case directed the Assessing Officer to restrict the addition to 25% of the cash amount received. The Tribunal emphasized that no fixed formula could be applied in such cases, leading to the partial allowance of the appeal. This judgment addresses the addition of cash received for flat bookings, the treatment of such cash amounts as income, and the estimation of profit on "on money." The Tribunal balanced the assessee's arguments with the Assessing Officer's stance, ultimately directing a specific percentage addition to the income based on the cash amount received.
|
