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TMI Blog2020 (12) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that the additions, if accepted, will result in increase in staggering net profit upto 52% which is ostensibly abnormal and out of sync with line of the business. CIT(A) has, in our view, rightly analysed the facts and inter alia observed that major component of expenditure is in the form of interest and remuneration to the partners which have not been doubted by the AO. CIT(A) has rightly concluded the issue in favour of the assessee having regard to the facts and law appreciated - Appeal of the Revenue is dismissed. - IT(SS)A No.266/Ahd/2017 - - - Dated:- 16-12-2020 - SHRI RAJPAL YADAV, VICE PRESIDENT And SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER Appellant by : Shri Virendra Ojha, CIT-DR Respondent by: Shri Vartik Cho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und during the course of search which reflected unaccounted receipts in the form of on-money charged on sale of flats. Shri Bharat K. Gadhiya, Managing Partner of the assessee-firm in his statement recorded under s.132(4) of the Act at the time of search confessed unaccounted receipts by way of on-money received on sale of flats. Shri Bharat Ghadhiya also made a total disclosure of ₹ 3.76 crores in respect of aforesaid two assessment years which is bifurcated as under:- A.Y. Rs. 2013-14 1,04,80,000 2014-15 2,71,20,000 Total 3,76,00,000 3.2. On p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O and submission of the appellant have been considered. During the course of search, incriminating documents were seized and also statements of some of the customers, who bought flats from the Scheme of the appellant, were recorded. It was on the basis of this material evidence, the assessee made disclosure on account of on-money receipts. The main issue in the appeal was that, according to the AO the assessee did not meet his commitment and disclosed part of the income offered during the course of the search. Thus, the assessee retracted his statement made in the search. 6.1.The contention of the appellant, in brief, was that he did not retract the statement recorded during the course of search and showed income in the returns for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest and remuneration to the partners. 6.2. After taking into consideration, the facts of the present case and the ratio of the decisions of the Hon'ble jurisdictional High Court, in my considered opinion, the ratio of the decisions on the issue is squarely applicable to the facts of the present case. It may be mentioned that it was not a case of retraction of the statement made during the course of search as the entire amount of the on-money receipts was included as a part of sale proceeds in the P L account and the profit was arrived at accordingly. It is also relevant to mention that even after claiming interest and remuneration to the partners, the net profit shown in the returns for both the assessment years was evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justified in reversal of action of Assessing Officer taken in conformity with own admission of assessee at the time of search. 8. Per contra, the ld.counsel for the assessee reiterated various submissions made before the CIT(A) and also referred to the audited financial statements. The Ld.AR contended that the action of the CIT(A) cannot be faulted in the light of various submissions and documents as placed by way of paper-book. Decision of Hon ble Jurisdictional High Court in the case of Dy.CIT vs. Panna Corporation 82 CCH 266 (Guj) was also referred to and relied upon for the proposition that only income embedded can be subjected to tax and gross receipt of unaccounted/onmoney cannot be taxed per se. The Ld.AR accordingly submitted and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the assessee that the statement of Managing Partner has been fully honoured and aforesaid on-money receipts amounting to ₹ 3.76 crores in aggregate were bifurcated into two financial years and credited to the Profit and Loss Account of the respective financial years appropriately. Such declarations formed part of the turnover and consequential profits were reflected in audited financial accounts. It is further contention on behalf of assessee that where the search has been conducted at the beginning of the financial year 2013-14 in June 2013, relevant to AY 2014-15, the expenses incurred in the subsequent period cannot be foreclosed at an earlier point of time by any measure. It is contended that the bonafides of expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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