9911796707
TMI Blog2024 (3) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... t of disclosure made or such balance as on 3/10/2020 is not available with the assessee from accounted source as well as from disclosure taken together.Assessee has already offered ₹ 27.74 crores, which is not denied. Therefore, assessee cannot be denied capitalization of such disclosure already made. Naturally, income will have the acquisition of the asset in the form of advances, cash on hand, and other assets. Statement recorded u/s 132 (4) of the staff, the director of the company and investigation/examination of the details during assessment proceedings categorically shown that the above sum is standing as opening balance in the seized documents as on 3/10/2020. On the issue of telescoping, honourable Supreme Court in S. NELLIAPPAN [ 1967 (5) TMI 6 - SUPREME COURT] has categorically held that telescoping is a question of fact. Therefore, it is for the revenue to prove that the fund flow statement shown by the assessee is factually incorrect. It is for revenue to show that the telescoping is not available because amount of income earned by the assessee have already been invested in other assets. Such fact is not demonstrated before us.No infirmity in the order of the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, ground number 4 of the appeal is dismissed. Addition of opening cash balance - AO submits that assessee has failed to substantiate its claim with any documentary evidence that the opening balance and the receipts were out of the unaccounted income disclosed by the assessee - HELD THAT:- It is fact that in search no such cash statements for other days of the year were found. Therefore, it is not an unusual presumption that those statement did not exist on the date of search. It is apparent that only the cash statement of 26/8/2020 was found. It may be possible that assessee must be maintaining all these statements for eachday, and which would be reported to the director of the company. However, that cannot go against the assessee that why cash statements of other days are not found. It is also the fact that for assessment year 2018 19 in assessment order dated 31/3/2023, AO has accepted that there are internal transfers of cash from one branch of the assessee to the other branch of the group. It is also the claim of the AO that no cash was seized of that magnitude during search. We find that search took place on 23/9/2021 and this Statement was found for the day 26/8/2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seized documents is irrelevant for the taxation in the hands of the assessee As the land does not belong to the assessee the rates mentioned in the column number 2 of the seized documents is irrelevant for the taxation in the hands of the assessee. The assessee has shown that this is the amount payable by these unit acquired to the MIDC, and sample cheques details is provided. Therefore, as the land is transferred by MIDC to the respective unit holders through all these brokers for which the assessee has received consultancy fees of ₹ 100,000/- for each unit, the whole of the sale transaction of the land cannot be taxed in the hands of the assessee. Merely because the assessee failed to provide the documentary evidence of payment of cheque by the unit acquired to the MIDC, the whole income cannot be taxed in the hands of the assessee when assessee is not shown to be the owner of such land. In the hands of the assessee, a sum of Rs. 2.81 crores have already been taxed on basis of this document. In view of this we do not find any infirmity in the order of the learned CIT A in deleting the total addition in the hands of the assessee. Allowance of expenses @ 30% out of unacco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee/appellant M/s GNP Consultancy and Solutions Private Limited, both are aggrieved and has filed these appeals. 02. The learned assessing officer in ITA number 3110/M/2023 has raised following grounds of appeal: 1. Whether, on the facts and in the circumstances of the case the Learned CIT (A) erred in deleting additions of Rs. 8,28,903/- on account of unexplained opening balance of cash by stating that the same is out of unaccounted business receipts disclosed by the assessee when the assessee did not submit such details and failed to substantiate its claims with any supporting documents during the assessment proceedings? 2. Whether, on the facts and in the circumstances of the case the Ld. CIT(A) erred in deleting additions of Rs. 73,84,000/- and Rs. 50,00,000/- on account of internal transfer of cash when the assessee had failed to substantiate its claim stating that the same was accepted in AY 2018-19 without appreciating the fact that in the AY 2018-19, the assessee had submitted documentary evidence to prove the same whereas for the year under consideration the assessee did not submit such details thereby the Ld. CIT(A) ignored these facts and adjudicated the ground i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,119/- stating that there is no mention of the word cash in the seized documents ignoring the fact that the assessee has not proved that the payments have been made through cheques? 9. Whether, on the facts and in the circumstances of the case the Ld. CIT(A) erred in accepting the contention of the assessee that the amount of Rs. 46.54 crores mentioned in seized document, was paid to the MIDC through cheque in respect of 281 plots whereas the total value of the 281 plots works | out to Rs. 60.12 crores. The Ld. CIT(A) ignored the fact that the seized documents do not show that the payments were made by cheques and the amounts mentioned in the seized document do not match with the value of plot as per assessee's submission. Therefore, the transaction mentioned in seized document represent cash receipts by the assessee? 10. Whether on the facts and in the circumstances of the case the Ld. CIT(A) erred in allowing the claim of expenses @ 30% out of unaccounted business receipts offered without appreciating the fact that the assessee has not submitted any documentary evidences that 30% of the expenses were incurred for the earning of such income and no evidence was submitted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the circumstances, the Learned CIT (Appeal)-Central erred in confirming addition of Rs. 51,32,900/- (Rs. 26,72,900/- Rs. 3,80,000/- + Rs. 20,80,000/-) as alleged unaccounted business Income from three land transactions on the basis of the seized documents without considering the detailed submission made by the assessee that no transactions are carried out by them as it did not materialized. 3.2) On the facts of the case, in law and under the circumstances, the Learned CIT (Appeal)-Central erred in confirming the addition of Rs. 51,32,900/- by presuming that assessee has earned alleged unaccounted business income out of said three land transactions without any sustainable basis or any other documentary proof or other corroborative evidence to that effect. 3.3) On the facts of the case, in law and under the circumstances, the Learned CIT (Appeal)-Central erred in confirming the addition in respect of alleged receipts from the said three land transactions merely on the basis of WhatsApp Chat, which is at the most secondary evidence and without any independent verification made to that effect by the Ld. AO or even the Ld. CIT(A) himself. 3.4) In any case, the addition made by the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral additions to the total income of the assessee. The additions were in nature unaccounted business income and unaccounted expenditure based on documents seized during search. The LD AO made addition of unaccounted business receipt of Rs 56.43 Cr and addition of unaccounted unexplained expenditure of Rs 5.48 Cr. 08. Assessee, aggrieved with assessment order preferred an appeal, which was decided on 2/6/2023 deleting the additions partly, and therefore both the parties are in appeal before us. 09. Ld. AR filed a three-volume paper book, chart of the issues that was considered while deciding cross appeals. 010. First, we deal with the appeal filed by the learned AO, which has almost ten effective grounds. 011. The first ground of appeal is with respect to the addition of ₹ 8,28,903/ deleted by the learned CIT A . Ld. AO made it on account of unexplained opening balance of cash by stating that the same is out of unaccounted business receipts disclosed by the assessee when the assessee did not submit such details and failed to substantiate it claim with any supporting documents during the assessment proceedings. 012. This aspect has been dealt with by the learned AO in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021 22 and 2022 23 respectively. Therefore the assessee was issued further questionnaire to explain as to why unaccounted receipts pertaining to the year FY 20-21 under consideration of ₹ 12,586,500/- [ Comprising of Rs 42,27500/- MIDC Plot consultancy income + Cluster Consultancy Income + Rs 73,84,000/- branch internal transfer entries] and opening balance of ₹ 828,903 should not be considered as unaccounted business income and a further sum of Rs 130,30,419 [ being various expenditure pertaining to F Y 20-21 in that sheet] not be considered as unexplained expenditure. 015. Assessee filed detailed letter dated 09/09/2022 and 30/12/2022 where in it is submitted that :- i. MIDC plot consultancy income of ₹ 42,27,500 and cluster consultancy income of ₹ 975,000 amounting to ₹ 52,02,500 has already been offered as income under section 132(4) of the act impugned assessment year. ii. Assessee has claimed deduction of 30% of the expenditure as it is also evident in the seized document. The expenditure is stated in the seized documents are 30% of the receipt. iii. No separate claim of the expenditure out of the unaccounted income is made. iv. Separate working ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f (1) of sum of ₹ 12,586,500/- being the receipt (2) expenditure of ₹ 13,030,409 under section 69C of the act and (3) addition of ₹ 828,903/ opening balance therein. 018. These additions were challenged before the learned CIT A as per ground number 7 before him. The learned CIT A appreciated from the seized documents; it is inferred that there is an opening balance for assessment year 2021 22 (financial year 2020 21) of ₹ 828,903/ . The total receipts are shown of ₹ 13,415,403 for financial year 2020 21 and ₹ 1,40,68,904 financial years 2021 22 totalling to ₹ 23,055,400. Out of the total receipts the MIDC plot consultancy charges of ₹ 4,227,500 for financial year 2020 21 and ₹ 2,250,000 for financial year 2021 22 totalling to ₹ 6,477,500/ and further cluster consultancy fees of ₹ 975,004 financial year 2020 21 and Rs. 2 lakhs for financial year 2021 22 totalling to ₹ 1,175,000/ has been offered by the assessee as net income after claiming expenses at the rate of 30% thereon in his statement under section 132 (4) as well as in the return of income. He further held that there are internal transfer of funds from o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 of ₹ 25.46 crores and the above opening balance of ₹ 828,903/ is nothing but out of the funds available from the above unaccounted business receipts offered by the assessee and its group. vi. AO has made an addition without making any verification, but explanation of the assessee was rejected without any cogent reason. vii. Accordingly, he deleted the above opening balance of ₹ 828,903/ . viii. With respect to the internal transfer of funds, he found that a sum of ₹ 73,84,000/- is the internal transfer of funds for financial year 2020 21 and ₹ 8,018,904 financial year 2021 22 totalling to ₹ 15,402,900. The above sum was stated to be internal movement of funds from one office or branches to the other office and branches of the assessee. The claim of the assessee is that this amount contains various entries of movement of funds from one office/branch to another office branch. The assessee is engaged in the business of consultancy and construction business and having different sites of construction and consultancy business in their offices are geographically spread across Maharashtra at Mumbai, Mayhap, Dombivli, Thane, Kalyan, Pune and Kolhapur. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, the learned CIT A deleted the above addition of three different nature (1) the addition of opening balance of ₹ 8,28,903/ , (2) addition of ₹ 7,384,000 in respect of internal transfers. 020. The learned assessing officer has challenged the deletion of the addition of ₹ 828,903/ as per ground number {1} and the deletion of the addition of ₹ 7,384,000 covered in ground number {2} of the appeal. 021. The learned departmental representative vehemently supported the order of the learned assessing officer and challenges the deletion of the addition holding that deletion is incorrect. He referred to the assessment order at page number 9 wherein the addition has been discussed by the learned assessing officer and Para number 9.5 of the order of the learned CIT A for reasons given by him deleting the above addition. He further stated that. i. Assessee has to substantiate the benefit and linkage between the amount disclosed by him as total income as undisclosed income and telescoping of such undisclosed income with the amount of addition deleted by the learned CIT A of opening balance. ii. There is no centralized record of the balance available with the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Connection is found from transfer of one branch to another branch is itself stated in the seized papers. v. These facts were also clarified before the learned Deputy Director of Income Tax (investigation) who has also accepted. vi. Such transfers are not income at all. vii. He further stated that all these documents were made available before the assessing officer along with the reply submitted before the DDIT {investigation} and therefore the addition is correctly deleted by the learned CIT A. viii. Explanation of the assessee during search, before the investigation Wing as well as before the learned assessing officer remains the same. ix. identical question arose in the case of the assessee for assessment year 2018 19 which is recorded by the learned CIT A and the learned assessing officer after detailed questioning, considering the explanation of the assessee, made no addition on this account. x. There is no infirmity in the order of the learned CIT A. 024. We have carefully considered the rival contention and perused the orders of the lower authorities. Ground number 1 is with respect to the deletion of addition of ₹ 8.28 lakhs as an opening balance in the seized documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n other assets. Such fact is not demonstrated before us. Honourable Bombay High Court also in case of 61 taxmann.com 357 has also categorically held that when the income has already been taxed, its subsequent withdrawal cannot be taxed once again. viii. Thus, in absence of any other adverse fact pointed out by the learned assessing officer, we do not find any infirmity in the order of the learned CIT A in granting the benefit of telescoping. ix. Thus, taking into consideration all the factors of disclosure made by the assessee for which telescoping has been granted, fund flow statement of additional income offered of ₹ 27.74 crores, consistent statement of director, staff, and submissions before the investigation Wing and the assessing officer, clearly establishes that the addition of ₹ 828,903/ is correctly deleted. 025. Accordingly, we uphold the order of the learned CIT A in deleting the addition of ₹ 8,28903/ of the opening balance in the seized documents. Ground number 1 of the appeal is dismissed. 026. Coming to ground number 2, which has two parts (1) addition of ₹ 73.84 lakhs and (2) further addition deleted of ₹ 50 lakhs on account of transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19,566,500/ is mentioned. The assessee was asked to provide the details of explanation of each entry along with the name, permanent account number and address of the parties involved along with the documentary evidence. The assessee submitted that that the above document belongs to Mr. Patil and that only some of the transactions are pertaining to the assessee. Statement of Mr. Patil was also recorded by the learned assessing officer who also made similar claim but failed to substantiate the transactions. Mr. Patil categorically accepted that the evidence was prepared by him as he is an Angadia, however, he could not identify even a single party other than the assessee in those transaction. It is also a fact that Mr. Patil forwarded it to the director of the company over WhatsApp. Mr. Patil stated that the evidence is the running Ledger of the cash with him of different parties however except the assessee he could not provide any explanation in respect of any other party. Therefore, the learned assessing officer issued a show cause notice, which was replied by the assessee but rejected by the learned AO and stated that it cannot be accepted that the said evidence belongs to Mr. Pat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A noted that opening balance of ₹ 162,451,306 is depicted in the document sent by Mr. Patil to the director. Out of the above transaction, a transaction of ₹ 185 lakhs of receipt and ₹ 17,088,000 of payment belongs to Mr. Sailesh Patil. Further, there is a construction income of ₹ 3,650,000/- construction expenditure of ₹ 9,92,750/-. Further, the transaction also shows that the consultancy income of ₹ 190 lakhs and expenditure of ₹ 4,07,000/- has been recorded. The transaction also shows, as an internal transfer of funds of ₹ 50 lakhs is receipt and payment of ₹ 10 lakhs. There were other receipts of ₹ 51,000,000/- in the statement. Accordingly, total income of ₹ 259,601,306 was stated to be receipt and Rs. 1,94,87,752/ was stated to be outflow. 031. The learned CIT A has categorically held that transaction that has not been owned up by the group, but which has been owned by on the other hand by Mr. Sailesh Patil cannot be the basis of addition in the hands of the assessee. Accordingly based on the various entries categorized he held that :- i. a sum of ₹ 162,451,306/- being the opening balance as per the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect. Therefore, he directed the AO to examine the claim of the assessee and deal with the addition accordingly. v. The CIT A further directed that if the above sum has not been disclosed in those other group concern, then the addition of ₹ 36.5 lakhs and confirmed in the hands of the assessee. vi. With respect to the addition of ₹ 50 lakhs it was stated that it is an internal movement of funds from one office to another office of the same assessee through Angadia Mr. Sailesh Patil. Therefore, as it is an internal movement of the funds made by the assessee from one office to another office, the addition was deleted. Such transaction is recorded at serial number eight wherein on 12 March 2021 that is a reference that the sum of ₹ 50 lakhs has been transferred from Nariman point office. Thus, the learned CIT A deleted the same. vii. With respect to a sum of ₹ 510 lakhs being total of entry at serial number 10 dated 13 March 2021 of sukhakarta clusters of ₹ 210 lakhs stated by the assessee in his statement that it is a cash received by the assessee but he does not remember the details and another entry at serial number 19 dated 15 March 2021 pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osure of the sum of ₹ 33 lakhs in the hands of M/s Ganadhish and ₹ 350,000 in the hands of Roshni Enterprises i.e., other concerns of the group. 034. The learned CIT DR collectively argued ground number 2, 3 and 4. He also collectively argued the addition confirmed by the learned CIT A against which the assessee is in appeal. Such additions are of ₹ 85 lakhs and ₹ 510 lakhs. 035. He referred to the document found during search from mobile phone of the director of the company a document that was sent by Mr. Sailesh Patil. He submits that except the assessee, neither the director Nor Mr. Patel could explain to whom other transactions belongs to. He further stated that why an Angadia will send the details of the other parties to the assessee. He further referred to the statement wherein 25 different entries were found of receipt of cash and payment of cash. Therefore, the whole transaction belongs to the assessee only. He further stated that assessee did not deny that not all the transactions are belonging to the assessee, but it says that some of the transactions belong to the assessee and some of the transaction does not belong to the assessee without staying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis. He stated that it is for Mr. Sailesh Patil to identify who are the other parties other than the assessee. If Mr. Sailesh Patil does not say that all these transactions are pertaining to the assessee, the learned assessing officer has merely drawn adverse inference. Naturally, the document has been sent by Mr. Sailesh Patil so for such document belongs to Mr. Sailesh Patil and the director is merely a receiver of that document. 039. Coming to second part of ground number 2 of the appeal wherein an addition deleted by the learned CIT A of ₹ 50 lakhs on account of internal transfer is contested by revenue, he submitted that ₹ 50 lakhs is on account of entry number 8 dated 12 March 2021. He submitted that there is a transfer from Nariman point office of ₹ 50 lakhs in Cash through Mr. Sailesh Patil to another branch. Therefore, there cannot be any income therein. He also referred to paragraph number 10.15 of the order of the learned CIT A wherein it is mentioned that the learned CIT A has also accepted that it is an internal movement of fund from one office place to another office place of the assessee through Angadia. Therefore, it cannot be the income in abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number 8 dated 12 March 2021 where there is a document that shows that there is a transfer of ₹ 50 lakhs from Nariman point office. The claim of the assessee is that this money has been transferred from Nariman point office in cash by the Angadia Mr. Sailesh Patil. Thus, the claim is that it cannot be the income when the money is transferred from one office to another office. The learned CIT A in paragraph number 10.15 has deleted the addition holding that this is an internal movement of funds made by the assessee from one office to the another office and therefore it does not have the characteristics of income as it is evident that assessee is operating at various places such as Nariman point, Mahape, Thane , Dombivli and Kalyan . The learned assessing officer also did not dispute the above fact. Therefore, we confirm the order of the learned CIT A in deleting addition of ₹ 50 lakhs being internal transfer of funds from one office to another office of the assessee. Accordingly, ground number 2 of the appeal of the AO is dismissed. 043. Ground number 3 of the appeal is with respect to the finding of the learned CIT A that the transaction appearing in the image of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place as instructed by his customers. ii. He confirmed that he has sent the above WhatsApp message to the director of the company. iii. Assessee group is also one of the clients to whom he provides the angadia services. iv. He further confirmed that he collects cash from the various offices of the assessee and delivers the cash according to the instruction. v. In reply to question number 26 he has categorically stated that the content of the transaction of the WhatsApp image sent by him to the director of the assessee company is related to various persons and groups including the assessee and it belong to various parties. vi. The AO made the addition of all the transactions stated therein. vii. The learned CIT A in paragraph number 10 10.11 has categorically held that that the statement of the assessee, statement of Mr. Sailesh Patil were not refuted by the learned assessing officer by showing any cogent evidence and in absence of such evidence, the statements given by the assessee as well as third party Mr. Sailesh Patil could not be disregarded. He further categorically held that the transaction with which the assessee group has entered with Mr. Sailesh Patil has been owned by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 6 (1), Mumbai i.e., the same assessing officer who is assessing the assessee. Further, the above sum is offered by the group concerns as 'on money' received. That sister concern has in fact offered ₹ 13.65 crore 'on money' income from construction activity. Further, the claim of the assessee that sum of ₹ 3,50,000 has also been similarly assessed in the hands of M/s Roshani Enterprises, another group concern. In view of these facts, we do not find any infirmity in the order of the learned CIT A in deleting the addition of ₹ 36.50 lakhs of the income contained in the WhatsApp message which is already offered by the other group concern as per income, subject to verification by the ld. AO, therefore same cannot be added once again in the hands of the assessee. Accordingly, ground number 4 of the appeal is dismissed. 047. Ground number 5 is with respect to the addition of opening cash balance of ₹ 13.41 crores deleted by the learned CIT A where the AO submits that assessee has failed to substantiate its claim with any documentary evidence that the opening balance and the receipts were out of the unaccounted income disclosed by the assessee. 048 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of ₹ 2,250,000. Therefore, the total unaccounted income offered by the assessee is ₹ 78.64 crores. Therefore, this addition is already part of the disclosed income of the assessee under section 132 (4) of the act. The learned CIT A decided this issue as per ground number 9 of appeal before him at paragraph number 12 of appellate order. He held as under:- 12.2 it is noticed that during the course of search, carried out on the group WhatsApp image was extracted from the mobile phone of Shri cost to latke director of the company and same was confronted to him in reply to question number 45/46 of his statement dated 23/9/2021 recorded under section 132 (4) of the act by the DD IT (investigation). It was replied by him that it is GNP groups consultancy and construction business account and it contains the details of payment made by the GNP group to the contractors and payment received by the GNP group from their clients. All the transactions were stated to be entered into cash and not accounted in the books. It was further clarified in question number 46 that part of the receipts are of projects of the group namely gallery and Arcadia constructed by assessee group concerns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up was having any other sources other than that explained above. According to the assessee, the AO had made the addition by only giving the reason that the assessee has not substantiated its claim with the documentary evidences. Other than this, a has not brought any evidence or given findings contrary to the explanation submitted by the assessee during the assessment proceedings. According to the assessee, while the AO has accepted partly the transactions of contract entries mentioned in the said document, the explanation regarding the amount of ₹ 13.41 crore as cash balance available at different offices as per the sheet has been rejected and addition is made. In this regard is also submitted that the AO cannot accept the content of the document in part and ignore the rest has this is not permitted under the law. In this regard the assessee has relied on the decision of glass lines equipments Co Ltd versus CIT reported in 253 ITR 454 (Gujarat) . 12.4 assessee also submitted that it has filed a fund flow statement of unaccounted income offered by the group and its application on page number 44 of the paper book and there was a cash balance available of ₹ 14.27 crores a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted income disclosed.. It was also brought to the notice of the search party as well as the AO wide letter dated 12/1/2022, 9/9/2022 and 30/12/2022 respectively. Further, GM the group as a whole offered ₹ 27.74 crore and (₹ 18.75 crores up to 31/3/2023) as unaccounted income pursuant to search. Keeping this fact in mind along with the fact that no cash for this magnitude had been seized and also that the assessee to whom the documents belonged has explained the contents thereof which are not refuted with any other evidence whatsoever, the addition seems to be springing out of the suspicion. In my view, once income is already offered to tax by various entities of the GNP group, taxing the same again would lead to double taxation and such double taxation is not permitted under the act. 12.7 Thus it emerges that once the income is already offered to tax, the same cannot be treated as income again merely because such income is reflected in the form of assets et cetera. Therefore, the addition springing out of assumption of the AO is not permitted under the act. It is also pertinent to note that there is a transfer of cash from one office to another out of the unaccounted bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on that date this is the income of the assessee. It was further stated that it is not the annual statement but daily cash statement of the various branches. Based on this the assessee has already disclosed income which subsume this. He further referred to page number 314 of the paper book to show that it is a daily cash statement and opening balances are coming from the respective earlier date. With respect to the explanation about the transfer of funds, he referred to page number 1164 of the paper book stating that it is the whole fund flow statement of the group which has already been considered for the purpose of overall disclosure made by the group. With respect to the availability of ₹ 6.45 crores, he referred to page number 45 wherein the above is a cumulative balance out of ₹ 37 crores. Accordingly, it was stated that there is no infirmity in the order of the learned CIT A holding that the cash balances stated in the statement found during search has already been part of the disclosure made by the assessee. He submitted that total disclosure made by the assessee is ₹ 78.64 crores and out of that, the disclosure on account of consultancy receipt is ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be taxed once again. It is also required to be seen that such cash was found in that cashbook on 26/8/2020. Therefore, naturally, if the income is disclosed which is higher than the amount of cash found in that cashbook, then only it can be said that cash was available with the assessee out of undisclosed income, unless contrary evidence are found that there is investment out of such undisclosed income prior to that date. Apparently, in those circumstances, the assessee did not have such cash available on that date. Such is not the case here. We have examined this aspect and find that for assessment year 2018 19 assesseehas disclosed gross receipt of ₹ 19.73 crores, for assessment year 2019 20 of ₹ 11.60 crores and for assessment year 20-21 assessee has disclosed total receipt of ₹ 6.48 crores. Thus, it is evident that prior to the date for which the cash statement was found the assessee has already disclosed the income of more than ₹ 30 crores. Further, there is no evidence that this sum of Rs 30 Crores is invested prior to 26/08/2020 somewhere else and assessee did not have source of such cash with it. Therefore, it cannot be denied that assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 54,830,909 comprises of several additions made by the learned assessing officer during assessment proceedings. These are described hereinafter. 055. During search, a pen drive was found from the employee of the company wherein it was found that that there are internal cash transfers, opening balances and the receipts mentioned in the sheet and the expenses. In paragraph number 6 of the assessment order, it is discussed. This is also discussed while deciding ground number 1 of the appeal of the AO. In the said document opening balance of ₹ 828903/ and total deposits of ₹ 23,055,400 and the total payments of ₹ 23,822,348/ were disclosed. When confronted the assessee submitted that the total deposits of ₹ 23,055,400/- is pertaining to the internal transfers, consultancy fees received and income from consultancy of clusters. Apart from the internal transfers, it was further stated that some of ₹ 5,202,500/- and ₹ 2,450,000/ has already been disclosed as consultancy income for the respective assessment years. With respect to the opening balance, the assessee submitted that it is part of the disclosure already made. With respect to the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there were images of various cash vouchers. These were further confronted to the director of the company. The total sum of ₹ 3,692,100/- was confronted in fifteen such images to the director. Director of the company denied the statement stating that there is no signature in the any of the vouchers. The statement of the executive assistant to the directors explained that she used to send these vouchers for the approval and the director was to approve the same over the WhatsApp chat. The AO agreed that though there is no physical signature of the director of the company however same have been approved by the director as confirmed by the executive assistant it was found that several such approvals were found amounting to ₹ 6,683,600/ . These vouchers were pertaining to four different financial years. For financial year 2020 21 such sum of ₹ 5 lakhs, the learned assessing officer questioned the assessee, assessee denied stating that payments have been made against these vouchers are unsigned. The learned assessing officer rejected the explanation and made an addition of ₹ 5 lakhs as per paragraph number 11.8 of the assessment order. 060. During search the WhatsA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and secondly the addition made by the learned assessing officer has been subsumed in 30% of the total business receipts. The learned CIT A held that once the receipt has already been taxed, the application of such income in the form of expenditure could not be once again added to the total income of the assessee. He further held that when learned assessing officer has believed the business receipts as per seized documents, the expenditure also has to be believed and therefore the net income is to be estimated and no separate addition is required to be made under section 69C of the act as held by the honourable Bombay High Court in case of Golani Bros (2017) 85 taxmann.com 355 (Bom). Similar view has also been taken by the honourable Delhi High Court in 349 ITR 85. Accordingly in paragraph number 15.13 after discussing the plethora of judicial precedents the learned CIT A held that since the entire receipts found as a business receipt under section 28 of the act has been considered, deduction of expenditure must be granted to the assessee and net income is to be estimated. Therefore, separate addition in respect of unexplained expenditure cannot be made. Accordingly, he deleted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the decision of the honourable Bombay High Court in case of Golani Bros, (supra). We do not see any infirmity in the order of the learned CIT A. Even the statement that the logic given by the learned CIT A is not correct is also not supported by the reason. Further provisions of section 69C of the act applies where in any financial year the assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part there of the explanation offered by him is not in the opinion of the assessing officer satisfactory, then amount covered by such expenditure or part thereof, is the case may be maybe, deemed to be the income of the assessee for such financial year. The proviso also says that when there is an addition under section 69C of the act such unexplained expenditure, which is deemed the income of the assessee, should not be allowed as a deduction under any head of income. In the present case, assessee has incurred certain expenditure, which is found during search in the seized documents, the seized documents also show the amount of undisclosed income and the amount of expenditure incurred for earning such income. In those circumstances, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a industrial development Corporation (MIDC) and those are made through cheque. The director also provided listed of units handled by each of the broker. In post search proceedings, director of the company accepted that the assessee has received ₹ 1 lakh per plot as its service fees for total 281 clients. He submitted that two hundred clients are handled by him for AARUL cluster and 81 clients are handled by him for TTC cluster. He submitted that these incomes are offered in assessment year 2020 21 and 2021 22. The learned assessing officer noted that from the image it is apparent that a sum of ₹ 13 lakhs to ₹ 18.60 lakhs per plot was received or receivable. According to that, he found that all 151-unit holders who are being handled by one broker Mr. Udhay Dahale in two different clusters has different prices. The AO noted that in case of one cluster, prizes ₹ 5,026,220 and in another cluster, it is ₹ 970,360/ respectively. Thus, the amount stated by the director does not commensurate with the amounts mentioned through cheque payments. The AO issued notice under section 142(1) of the act. Assessee claimed that the transactions appearing in the said evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the field of industrial setup in MIDC. ii. The WhatsApp images found from the mobile of the assessee director was sent to him by one broker Mr. Pradeep (Uday) Dahale. iii. This document was explained by the director of the company in statement under section 132 (4) of the act in reply to question number 50 stating that it is a statement of the parties who wants to purchase land from MIDC by paying directly to the MIDC through various brokers. The assessee earns consultancy fee only after the occupation certificate of the building has been received after construction by those buyers. iv. All these payments have been received in cheque by MIDC from various customers buying the plot. The assessee submitted the details of payment made and other documentary evidence in respect of several clients who purchased the property directly from MIDC. v. The payments have been made by the parties to the broker as well as to the assessee only after completion of the transaction and possession of the property are handed over to them. vi. The document found contains the names of the broker who brings clients to the assessee and respective payments made by the clients to the MIDC for purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akh per unit for 281 units therefore the learned CIT A is correct in deleting the addition. 071. We have carefully considered the rival contention and perused the orders of the lower authorities. During search WhatsApp image was found from the mobile phone. The WhatsApp image is an excel sheet where the name of various brokers, the rate of the land, number of cases handled by each of the broker and amount receivable for the transaction and total amount received until date along with the outstanding balance is mentioned. The explanation of the assessee is that the name of the broker is mentioned who have dealt with in purchasing the land by the clients brought in by broker for MIDC allotment. Thus, on careful perusal of the document it is apparent that there are seven brokers who have brought in 282 clients. Out of these 282 clients , one client is directly brought in by the assessee. Therefore, the brokers in turn have brought 281 clients. For all these clients the total amount receivable for allotment of land is ₹ 46.54 crores, out of which ₹ 35.95 crores is received and balance of ₹ 9.52 crores is outstanding. The assessee has charged fees of ₹ 1 lakh per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch numerous evidence of unaccounted business receipts and expenditure were found which were not recorded in the books of accounts of the assessee. In the statement recorded of the director, he has accepted and owned various unaccounted business receipts. Assessee offered 70% of such income as net income during statement recorded under section 132 (4) of the act. It was also explained by letter dated 11/2/2022 claiming that the net income is to be estimated based on the evidence found. It was also claimed by the assessee that during search itself, various documents were found which itself shows that there is various expenditure incurred by the assessee for earning that income. The learned assessing officer rejected such claim and did not give any reason that why the claim of the assessee of net income offered should be rejected. The learned CIT A found that the AO has made the addition of the entire gross receipts without allowing any claim of the expenditure such evidenceis available in the recorded statement and seized documents. It is the claim of the assessee that the gross income offered by the assessee for taxation is ₹ 71,577,000/- out of which 30% of the expenses shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unted expenditure was found at ₹ 7.19 crores which is almost 30.03% of the unaccounted receipts and therefore the claim of the assessee is reasonable and can be accepted that the gross receipts 30% of deduction should be allowed for the expenditure incurred by the assessee. Accordingly, we do not find any infirmity in the order of the learned CIT A which is based on the financial statements of the assessee for past year as well as based on evidence found during search in the seized material. Accordingly, ground number 10 of the appeal of the AO is dismissed. 077. In the result, appeal filed by the learned AO is dismissed. 078. Now we come to the appeal filed by the assessee. 079. Ground number 1 of the appeal of the assessee is challenging the assessment order on legal ground, it was not pressed, and therefore it is dismissed. 080. Ground number 2 of the appeal is with respect to the addition of ₹ 85 lakhs and ₹ 5.10 crores confirmed by the learned CIT A while deciding ground number two and three of the appeal of the revenue. The addition relates to ground number eight raised before the learned CIT A which has been dealt with in paragraph number 10. The ground bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 30% of such income as expenses also. Therefore, in fact he confirmed the addition of ₹ 5.10 crores in the hands of the assessee based on the two entries stated in the seized document on 13 March 2021 and 15 March 2021. 082. Another sum of ₹ 85 lakhs was also confirmed wherein it was found that there are three entries dated 12th March 21 and 15th March 21 of ₹ 20 lakhs, 40 lakhs and ₹ 25 lakhs respectively totalling to ₹ 85 lakhs. The answer given by the director during statement recorded under section 132 (4) with respect to the sum of 20 lakhs is that it is a consultancy charges received in cash from the agent Mr. Umang Jain. With respect to the sum of ₹ 40 lakhs on 15 March 2021, it was stated that these payments were received in cash, but he does not recall the exact details. With respect to another payment of ₹ 25 lakhs on 15 March 2021 is given the same explanation that the payments were received in cash, but he does not recall the exact details. Accordingly, the learned CIT A noted that as in the statement of the director itself it is confirmed that these entries pertain to the amount received in cash, but he does not recall the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at particular agent. There is no evidence that such income has not been received by the assessee. Merely because Mr. Sailesh Patil who is an Angadia has been assessed on the above sum, albeit on commission on this sum, it cannot be said stated that he has owned the ownership of the sum of ₹ 20 lakhs. Accordingly, we do not have any hesitation in confirming the order of the learned CIT A to the extent of including the income of ₹ 20 lakhs as income of the assessee from consultancy charges. We further hold that as the assessee is charged to tax of consultancy fees of ₹ 20 lakhs, as held in deciding ground number 10 of the appeal of the learned assessing officer, assessee is entitled to the deduction of the expenditure at the rate of 30%. Therefore, the learned assessing officer is directed to tax 70 percent of ₹ 20 lakhs as income of the assessee. 086. With respect to the addition of ₹ 40 lakhs and ₹ 20 lakhs received on 15 March 2021 where the assessee has stated that these payments were received in cash but he does not recall the exact details, and the learned CIT A has confirmed the addition merely on the basis of the statement of the director o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that company for rendering services to transfer of CFC plot in the name of the said company, which is a promoter of CFC, who supervises and provide the services to clusters . Therefore, claim of the assessee is that the above amount of cheque is issued by the said company in favour of MIDC is premium charges stated above and consultancy fee of ₹ 11 lakhs received by the assessee for rendering such services has duly been accounted in the regular books of accounts. Assessee also supported the same by submitting the Ledger account. The assessee also stated that the same facts were clarified during search to the DCIT (investigation) wide letter dated 12/1/2022 submitted on 11/2/2022. Accordingly, the claim of the assessee is that above sum is not received in cash but is a transaction with MIDC of that Buyer. 089. The learned departmental representative vehemently supported the order of the learned assessing officer and the learned CIT A state in that the WhatsApp message of Mr. Sailesh Patil relates to cash transaction only and therefore the explanation of the assessee is not correct. He further submitted that why an Angadia will deal with cheque transaction. He submits that on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs 11 lakhs on this transaction of purchase of land by Sukhakarta Thus, it is not clear whether the amount mentioned in the WhatsApp message on identical date of the identical amount from the identical party is cash or cheque Transaction. Whether both the transaction is same or different. Further, whether the above sum is income of the assessee over and above ₹ 11 lakhs recorded in the books of account or not is required to be examined. As we have restored the issue of the addition of ₹ 65 lakhs back to the file of the assessee involving similar facts, we also restore the addition of this sum of Rs 2.10 Cr also back to the file of the learned assessing officer with similar direction. Assessee may produce relevant details in support of its claim. The LD AO may examine the facts and decide issue afresh. 091. The next entry is dated 15 March 2021 of ₹ 3 crores wherein the name of the party is mentioned as Nilawar and when the statement of the director is recorded under section 132 (4) he submitted that it is a consultancy charges received in cash from Mr. Prashant Nilawar in respect of sale of land in Pune. Therefore, the addition was made by the learned assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, ground number two of the appeal is allowed with above direction. 094. Ground number 3 of the appeal is with respect to the addition of ₹ 5,132,900/- comprising of three amounts (1) sum of ₹ 2,672,900/-, (2) ₹ 380,000/- and (3) ₹ 2,080,000/-. All of these are treated as unaccounted cash receipts of the assessee. The fact of the case shows that that the learned assessing officer based on the images of the diaries found from the WhatsApp image of Mr. Kaustubh latke has made the above addition. 095. The amount of addition of ₹ 2,672,900 is concerned, it pertains to the transaction of the assessee carried out by one Mr. Rajesh saboo on account of purchase of 5.345 acres of land where the assessee was supposed to get remuneration of ₹ 500,000 per acre. It is the submission of the assessee that the above transaction has not at all materialized and this was merely a proposal with a rough working of the total probable price. The learned assessing officer has made an addition of ₹ 2,672,900/- on this account. The learned CIT A also confirmed the same because the world 'paid ' is used in the document. The argument made by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is a transaction which has been agreed for purchase of 5.345 acre of land by one Mr. Rajesh Saboo. Claim of the assessee is that such transaction ultimately did not materialize. The lower authorities have made the addition of ₹ 2,672,900/ in the hands of the assessee. The document shows that the assessee has paid ₹ 63 lakhs by deducting ₹ 27 Lacs as its service charges. Therefore, assessee was to receive service charges of ₹ 5 lakhs per acre. However, as the claim of the assessee is that transaction has not materialized and therefore the above sum cannot be taxed in the hands of the assessee as no income has accrued. This statement of the assessee has not been appreciated by the lower authorities. Undoubtedly, it is for the assessee to show that what is the land that was being discussed for purchase and to show that the transaction did not materialize. This fact could have been examined by examining Mr. Rajesh Saboo, who allegedly entered the transaction for purchase of the above land. The lower authorities have not at all examined purchasers. If the LD AO had examined the purchaser, it could have been ascertained with evidence that whether such t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. During assessment proceedings, the assessee claimed that these are merely proposals, but the learned assessing officer has categorically noted that as Mr. Umang Jain has given ₹ 10 lakhs, it shows that the transaction has already taken place. On appeal before the learned CIT A he confirmed the same. 0100. The claim of the learned authorized representative is that before the assessing officer it has been categorically stated that this was the proposal only and the transaction has not materialized. It was further stated that the message only says that somebody has paid ₹ 10 lakhs as an advance. Merely from that, it cannot be presumed that there is an income of ₹ 380,000 in the hands of the assessee to be taxed. 0101. Before us, it was also stated that the same transaction may also be examined from Mr. Umang Jain whether he has already paid a cheque of ₹ 5 lakhs and another cheque of Rs 2,35,000/- or not. If these cheques are not paid, naturally the transaction has not materialized. 0102. The learned CIT DR vehemently submitted that when there is reference of ₹ 10 lakhs already paid by Mr. Umang Jain the transactions have concluded, and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of GNP charges of ₹ 2,080,000/ and therefore such income has been added and confirmed by the learned CIT A. 0107. We have carefully considered the rival contention and perused the extract of the document placed at page number 24 of the assessment order. The transaction related to the land at Gate number 1269 having an area of 104 R (2.6 acre) to be purchased from four farmers where the total consideration is ₹ 72.80 lakhs out of which a cheque payment of ₹ 12 lakhs is to be made and the balance payment is to be made in cash. In the same document the charges of assessee were mentioned at ₹ 2,080,000/ . In this case, the land is identified, and document says that the land would be registered on 'fourth'. It is further stated that the balance amount would be the charges of the GNP, which would be collected in due course of time. Similar to the other transactions there is also a cheque transaction of ₹ 12 lakhs to be paid to four farmers. Broker involved is also Mr. Umang Jain. As the claim of the assessee is that such transaction did not materials, it can be examined from the broker, from Registrar as land is identified, and from farmers who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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