Issue before tribunal:
- whether the definitions of transfer as embodied in section 2(47) and section 269UA(f) of the Act would be applicable or not and what should be the correct year of taxing the receipt of ‘on money’ and recorded consideration.
- Whether CIT(A)has erred in reducing the undisclosed income worked out at Rs.3,08,01,600/-, as per the seized materials and as admitted by the working partner of the assessee firm, Shri Sunil H. Desai, to Rs.2,29,20,847/-.
- Whether CIT (A) erred in law and on facts in confirming the additions on account of profit alleged to have been earned by the appellant firm from construction and sale of flats at various sites.
Brief facts of the case:
- These matters were earlier remitted to the ITAT by Hon’bleGujrat High Court.
- Assessee is engaged in the business of construction activities. A search under section 132 of the Act took place on 29.10.1999 at the business and residential premises of the assessee which was concluded on 03.11.1999.
- Assessee filed a return disclosing undisclosed income of Rs.10,86,199/- on 17.02.2000 in response to notice under section 158 BC of the Act. The appellant constructed a residential complex namely Chandan Park, City Light Road, Surat during the period relevant to block assessment.
- The appellant received ‘on money’ of Rs.5,39,63,889/- which was detected during the search through an independent and exclusive evidence. The receipt of ‘on money’ and income of Rs.3,08,01,600/- was admitted by the working partner during a statement on oath under section 132(4) of the Act.
- However, the appellant retracted from the statement on oath and truth of the seized material while declaring undisclosed income of Rs.10,86,199/- only through the block return
- During the post search period the appellant has shifted a stand that income is disclosed on accrual basis. The main issue is regarding receipt of ‘on money’ which has been accepted by the appellant.
- On appeal CIT (A) partly allowed the appeal and directed the AO to adopt the Net Profit at Rs.2,29,20,847/- and after allowing the benefit of undisclosed income of Rs.10,86,199/- in the block returns, take the total undisclosed income at Rs.2,18,34,648/- and accordingly charge tax.
Contention of the revenue:
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