Robin Ramavtar Goenka Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad held that taxing entire unaccounted cash receipts or on-money receipts not justified as only profit embedded in such receipts is taxable. Accordingly, AO directed to adopt 13% profit margin on real estate business and tax accordingly.
Facts- The assessee is engaged in real estate business. Assessee is a part of “Sankalp group” of Ahmedabad. A search and seizure action u/s. 132 of the Act was carried out in “Sankalp Group of Ahmedabad”. Incriminating materials, including handwritten diaries, loose papers, unrecorded bills and other documents were seized. During the course of search evidence of on-money transactions in real estate projects, unaccounted cash sales were found which were not recorded in the books of accounts. Unexplained cash payments for land purchases, brokerage, salaries, personal expenses and jewellery were seized.
Not being satisfied with the reply, entire unaccounted receipts and entire unaccounted payments, appearing in the seized material, were added as income of the respective assessment years and demanded taxes thereon by AO.
CIT(A) decided the issues for all the assessment years as total unaccounted receipts aggregate to Rs.29,44,43,392/- as against which total unaccounted payments aggregate to Rs.31,04,39,180/-. Being aggrieved, both revenue and assessee has preferred the present appeal.
