Bhalchandra Trading P. Ltd. Vs DCIT (ITAT Mumbai)
It is not in dispute that assessee had indeed received on-money for sale of flats to the tune of Rs. 2,20,00,000/- during the year under consideration. It is not in dispute that the assessee had incurred certain business expenses out of such on-money which are kept outside the books of accounts. Hence, it will be just and fair that only the profit element embedded on any such undisclosed transaction could be brought to tax on an estimated basis. The assessee had already pleaded that on-money transactions were offered by the assessee’s group concerns @12% of on-money receipts before the Hon’ble Income Tax Settlement Commission and the same has been accepted by the Settlement Commission. Hence, the data and information was indeed available with the ld. CIT(A) to have some rational basis to make profit estimation in the hands of the assessee herein by following 12% thereof from the order of Hon’ble Income Tax Settlement Commission. Accordingly, we direct the ld. AO to add only 12% of on-money receipts as undisclosed income of the assessee for the year under consideration. Accordingly, the ground No.1 & 2 raised by the assessee is partly allowed.
FULL TEXT OF THE ITAT JUDGEMENT
These appeals in ITA No.2977/Mum/2019 & ITA No.2978/Mum/2019 for A.Y.2013-14 & 2014-15 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-54, Mumbai in appeal Nos.CIT(A)-54/IT-10394/DCCC-6(2)/2017-18 & CIT(A)-54/IT-10397/DCCC-6(2)/2017-18 respectively dated 18/02/2018 & 13/02/2019 respectively (ld. CIT(A) in short) against the order of assessment passed u/s.153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 27/12/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle 6(2), Mumbai (hereinafter referred to as ld. AO).
Since identical issues are involved in both the appeals, these appeals are taken up together and disposed off by this common order for the sake of convenience.
2. The first identical issue to be decided is as to whether the ld. CIT(A) was justified in confirming the addition of Rs.5,34,819/- as income from inflation of expenses in the facts and circumstances of the case for the A.Y.2013-14.
3. None appeared on behalf of the assessee. We have heard the ld. DR and perused the material available on record. We find that the search operation u/s.132 of the Act was conducted in the Ahuja group of cases on 25/06/2015 and certain loose papers and digital forms were found and seized. Pursuant to the said search, the assessee was issued notice u/s.153A of the Act for A.Y.2013-14 on 24/08/2016. The assessee filed return in response to notice u/s.153A of the Act on 29/12/2016 declaring income of Rs.2,11,77,461/-.
3.1. We find that the ld. AO had mentioned in the assessment order that parallel books of accounts maintained by the assessee evidenced booking of expenses in the form of cheque payment and receiving back cash for the same. The ld. AO even tabulated year wise inflation of expenses where cheque payments were made and cash was received back as under:-
