Kalyan Development Corporation Vs ACIT (ITAT Mumbai)
Conclusion: Since the addition pertained to the “receipt of money” from the sale of flats by the assessee and these amounts did not represent the actual receipts in the hands of the assessee, they could not be subjected to tax.
Held: AO made addition of Rs.5,30,280/-in respect of receipt of “on money in cash” from the customers who had purchased flats in the project of assessee “Mangeshi Sanskar”. AO noted that assessee had received on money from the purchasers of the flats over and above the agreement value from the computer data seized during the course of search action. Assessment was completed by making an addition of Rs.4,56,77,925/- representing the “on money” received as unaccounted income. Subsequently, an order u/s. 154 was passed, whereby the addition so made was reduced to Rs.31,48,018/-. In the said order passed u/s. 154 rectifying the mistakes apparent from record, the submission of assessee was that income had already been offered to tax in AY 2015-16, 2016-17 and 2017-18 and therefore impugned additions lead to double taxation. Assessee had offered these amounts to tax based on accepting their receipt in the respective assessment years. These facts were demonstrated evidently by the assessee which were accepted by AO and thus relief was granted and the original addition of Rs. 4,56,57,925/- was reduced to Rs.31,48,018/-. CIT(A) further reduced the addition to ₹5,30,280 and did not accept the assessee’s argument regarding amounts not received. Assessee took up the matter . It was held that since the addition was in respect of “receipt of on money” against the sale of flats by assessee and when these two amounts did not represent the actual receipt in the hands of the assessee, they could not be brought to tax. Accordingly, the addition so made was deleted.
