The Tax Publishers2020 TaxPub(DT) 4859 (Mum-Trib)

INCOME TAX ACT, 1961

Section 68

Where AO made addition by way of estimation of on-money at ad hoc rate of Rs. 25,000 in case of shops and Rs. 14970 in case of flats received by assessee without any basis, the same had to be deleted in view of decision rendered in the case of Runwal Homes Pvt. Ltd. v. Dy. CIT (ITA No. 5621/M/2017, Assessment Year 2015-16 vide Order, dated 20-12-2017) 2017 TaxPub(DT) 5580 (Mum-Trib).

Income from undisclosed sources - Addition under section 68 - Receipt of on-money on sale of flats and shops -

AO made addition by way of estimation of on-money at ad hoc rate of Rs. 25,000 in case of sale of shops and Rs. 14,970 in case of sale of flats received by assessee. The said amount was worked out during the course of search and statement of various employees, which were confronted to a director of the assessee who admitted the same in the statement recorded during the course of search. Held: The addition on estimation basis by applying ad hoc rate of Rs. 25,000 in case of shops and Rs. 14,970 in case of flats on the basis of which the on-money was arrived at the same is without any basis and has to be deleted. The case of assessee was covered by the decision of in case of Runwal Homes Pvt. Ltd. 2017 TaxPub(DT) 5580 (Mum-Trib). Accordingly, AO was directed to restrict addition only where direct evidences of accepting on-money received from customers was found during the search. AO would also verify availability of cash flow with the assessee group and if any shortage was noticed a further addition to the extent of such shortage may be further added in the hands of assessee. Thus, matter was set aside to the file of AO for limited purpose of quantification of undisclosed income on the basis of incriminating materials/evidences and examining the availability of cash in the group.

Followed:Runwal Homes Pvt. Ltd. v. Dy. CIT (ITA No. 5621/M/2017, Assessment Year 2015-16 vide Order, dated 20-12-2017) 2017 TaxPub(DT) 5580 (Mum-Trib)

REFERRED :

FAVOUR : Matter remanded

A.Y. :


INCOME TAX ACT, 1961

Section 4

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