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TMI Blog2021 (6) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of the assessee as it is admittedly received from the sale of flats to various parties by the assessee and thereafter, proceeded to estimate the profit element thereon @25% as against 100% adopted by the ld. AO. While doing so, we find that the ld. CIT(A) had categorically stated that the provisions of Section 68 cannot be made applicable to the said on-money receipt. Since the nature and source of credit being on- money receipt received from sale of flats had been duly accepted by the ld.AO in the remand report, the same would construe only business receipt and not cash credit u/s.68 of the Act and accordingly, the ground No.1 raised by the Revenue for both the years on this limited aspect, deserves to be dismissed.t. Addition equal to 25% of the on money received - At what rate of the on money should be brought to tax? - Following Tribunal case in the sister concern cases of the assessee group [ 2021 (2) TMI 1095 - ITAT MUMBAI] on identical facts and circumstances emanating out of the same seized material and same search, we direct the ld. AO to add only 12% of the on-money receipts as undisclosed income of the assessee. Accordingly, the grounds raised by the Revenue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by ICAI for taxing income from project were not satisfied in the relevant year and hence, whatever income quantified from the construction project ought to be taxed in accordance with the Revised Guidance Note of 2012 issued by ICAI and thus, the income estimated from on money and taxed in the year of receipt is unjustified and liable to the deleted. 3. Without prejudice to the above, the Ld. CIT(A) has erred in estimating the income @25% of on money received without appreciating the fact that as per parallel books of account, the overall group had incurred huge loss and income from on money was estimated @12% in other group entities before the Hon ble Settlement Commission and the same was accepted @12% and hence, the income from on money may be estimated @12% as against estimated @25% by the Ld. CIT(A) and accordingly, relief may be given to the appellant. 4. The Appellant craves leave to add, alter, amend or any of the above grounds of appeal. 2.1. The Revenue has raised the following grounds of appeal before us for A.Y.2013-14:- 1. Whether on the facts and circumstances of the case and in law the CIT(A) erred in holding that the cash received by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as against estimated @25% by the Ld. CIT(A) and accordingly, relief may be given to the appellant. 4. The Appellant craves leave to add, alter, amend or any of the above grounds of appeal. 2.3. The Revenue has raised the following grounds of appeal before us for A.Y.2014-15:- 1. Whether on the facts and circumstances of the case and in law the CIT(A) erred in holding that the cash received by the assessee was in the nature of business receipt and could not be treated as income u/s.68 when the assessee did not discharge its onus and the identity, genuineness of the transaction and creditworthiness of the parties have remained unexplained? 2. Whether on the facts and circumstances of the case and in law the CIT(A) erred in restricting the disallowance @25% of the cash received when no evidence of expenditure of balance 75% of the cash was produced by the assessee and therefore genuineness and allowability of the same could not be examined? 3. We have heard rival submissions and perused the materials available on record. We find that the aforesaid grounds are exactly identical with the grounds raised in the case of group company of the assessee i.e. Tulip Land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Bhiwandi A/ c Cash Sales - Bhiwandi 20,00,000 20-04-2015 D. Mangni Bhiwandi Ac Cash SalesBhiwandi Project 50,00,000 24-04-2015 D. Mangni Bhiwandi Ac Cash Sales Bhiwandi 30,00,000 20-05-2015 D. Mangni Bhiwandi Ac Cash SalesBhiwandi 50,00,000 Total 1,82,50,000 5. Accordingly, a show cause notice was issued to the assessee as to why the cash received as on money of ₹ 1,82,50,000/- should not be added as income of the assessee as unexplained cash credit under section 68 of the Act. The assessee submitted vide letter dated 29.11.2017 that there was only one project at hand in plot bearing survey No.92/2, 92/4, 92/7(P) near Bhadvad Talab of village Temghar, Taluka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects (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 when the regular income of the assessee was offered to tax. 7. The Ld. D.R., on the other hand, relied on the order of authorities below: 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oject 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 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 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., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 3.1. The first two grounds raised by the assessee for A.Yrs 2013-14 and 2014-15 are covered by the aforesaid order by this Tribunal in the case of Tulip Land Developers P. Ltd. vs. DCIT dated 10/02/2021 in para 8-9 thereon. 3.2. The third ground raised by the assessee for A.Yrs. 2013-14 and 2014-15 are covered by the aforesaid order by this Tribunal in the case of Tulip Land Developers P. Ltd. vs. DCIT dated 10/02/2021 in para 11,12 13 thereon. 3.3. Similarly, the grounds raised by the Revenue for A.Yrs 2013-14 2014-15 are covered by the decision rendered by this Tribunal in the case of Tulip Land Developers P. Ltd. vs. DCIT dated 10/02/2021 vide para No.13 wherein it was directed to adopt profit element @12% on on- money receipts as the income of the assessee. 3.4. We also find that in yet another group company of the assessee emanating out of the same seized material arising out of same search and on similar addition in the case of Bhalchandra Trading Pvt. Ltd., vs. DCIT in I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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