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TMI Blog2021 (2) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... the system of accounting followed by the assessee as has been decided by us in ground No.1. X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to various transactions of the assessee. The search was extended to Ahuja Group Associates and residences of their directors and also Mr. Sunil Chaudhary, driver of the promoter of the group Shri Jagadish Ahuja. During the course of search parallel books of accounts were found of Ahuja Group at the residence premises of Mr. Sunil Chaudhary, the driver of the promoter. A statement of Mr. Sunil Chaudhary was also recorded under section 132(4) of the Act and he admitted the said documents were belonging to the Ahuja Group. During the course of search proceedings the statement of Shri Jagadish Ahuja principal promoter of Ahuja Group was also recorded. During the course of search it was found that the assessee has received cash to the tune of ₹ 1,82,50,000/- as per details below: Date Particular V. Type Debit Credit 17-03-2015 Sanjay Agrawal Bhiwandi A/c Cash Sales - Bhiwandi Project 10,00,000 23-03-2015 Kailash Devnani Bhiwandi Cash Sales-Bhiwandi Project 22,50,000 08-04-2015 Sanjay Agrawal Bhiwandi A/ c Cash Sales -Bhiwandi Project 20,00,000 20-04-2015 D. Mangni Bhiwandi Ac Cash Sales-Bhiwandi Project 50,00,000 24-04-2015 D, Mangni Bhiwandi Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 08.04.2011 3. CIT vs. M/s Jalaram Jagruti Development Pvt. Ltd. (ITA No. 1537 of 2010) dated 23.11.2010 (Bombay High Court) 4. CIT vs. M/s Guruprerana Enterprises (ITA No. 1849 of 2011) dated 04.03.2013 (Bombay High Court). 5. Asst. CIT v. Layer Exports P Ltd [184 TTJ 469 (Mum)] 6. Dhanvarsha Builders & Developers (P.) Ltd. Vs. DCIT 102 ITD 375 (Pune) 7. S.G.R.Enterprises v ACIT [112 TTJ 377 (Bang)] 8. DCIT v Tejas Constructions [ITA 934/PN/2009 Order dated 31.1.2012] 9. Fort Projects (P) Ltd. v DCIT [145 TTJ 340 (Kol)] 10. Rakesh K. Kapadia [48 ITD 283 (And)] 11. ITO v Karda Construction P. Ltd. [ITA no.971/PN/2011 dated 31.07.2012] 12. South Calcutta Promoters (Pvt.) Ltd. Vs. ITO l.T.A. Nos. 2216 & 2217/ Kol/2003 The Ld. A.R. prayed before the Bench that in all the above cases it has been held that income has to be assessed in the year of completion of project as per the regular method of accounting when the regular income is assessed to tax and not in the year of receipt of on money. The Ld. A.R., therefore, prayed that the order of Ld. CIT(A) may be set aside on this issue and AO may be directed to assess this income in the year of completion of project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuss the cited two decisions. In the case of M/s Jalaram Jagruti Development Pvt. Ltd. (supra), the issue before the Hon'ble Bombay High Court was the following: "Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal in law, was right in holding that receipts of ₹ 3,46,250/- recorded in the documents seized during the course of search were reflected in the books of accounts and could be taxed only in the year in which the project was completed?" The Hon'ble High Court held that: "The finding of fact recorded by the Tribunal is that the receipts in question had direct nexus with the project of the assessee and that the said cash receipts have been offered to tax in the AY 2008-09, since the assessee was following the project completion method. Once the cash in question has already been assessed to tax, the question of taxing the same assessment year in question AY 2005-06 does not arise." 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 justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile dealing with the ground No.1. The only issue involved here is whether at what rate of the on money should be brought to tax. The Ld. Counsel, at the outset, submitted that since in the cases of group concerns the settlement commission has already accepted that on money is to be assessed at the rate of 12%. We therefore find merit in the contentions of the assessee's counsel that following the settlement commission's order the same should be applied in the case of the assessee also. The case of the assessee is supported by the following decisions: 1. ACIT vs. Om Construction ITA No.6234/M/2012 A.Y. 2006-07 & ors. 2. ACIT vs. Shankar Developers ITA No.6235/M/2012 A.Y. 2003-04 & ors. In the case of ACIT vs. Om Construction ITA No.6234/M/2012 A.Y. 2006-07 & ors. (supra) the co-ordinate bench of the Tribunal held that where the settlement commission has assessed the income at 12% then a different view can 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 accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Settlement Commission. Accordingly we confirm the order passed by Ld CIT(A). Accordingly we reject the appeal filed by the revenue." 13. Following the above decisions, we are inclined to held that the Ld. CIT(A) is not correct in not following the order of settlement commission wherein a rate of 12% has been applied on the on money to assess income embedded therein. Accordingly, we modify the finding of Ld. CIT(A) and direct the AO to assess the on money @ 12% as per the system of accounting followed by the assessee as has been decided by us in ground No.1. 14. In the result, the appeal of the assessee is allowed. ITA No.3727/M/2019 A.Y: 2016-17 15. This is the cross appeal by the revenue challenging the order of ld CIT(A) wherein the ld CIT(A) has partly deleted the on money addition to the tune of 75%. The assessee has also raised the issue of part sustaining the addition to the tune of 25% in ITA No.2980/M/2019 for A.Y. 2016-17. In view of our decision in ITA No.2980/M/2019 for A.Y. 2016-17, the appeal of the revenue becomes infructuous and is accordingly is dismissed. 16. In the result, the appeal of the assessee is allowed and the appeal of the Revenue is dismissed. Or ..... 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