TULIP LAND & DEVELOPERS P. LTD, MUMBAI V. DCIT, CENTRAL CIRCLE - 6(2), MUMBAI

ITA 2979/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3842 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 07-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 132; 143(3); 153C

Judgement Text

, , ! IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 2979 / / 2019 (%. 2015-16 ) ITA NO.2979/MUM/2019(A.Y 2015-16) M/S. TULIP LAND & DEVELOPERS P. LTD. GROUND FLOOR, RAJPIPLA, OPP.STANDARD CHARTERED BANK, SANTACRUZ (W),MUMBAI 400 054. PAN-AADCT-7067-N ...... ' / APPELLANT % VS. DY.CIT, CENTRAL CIRCLE -6(2), ROOM NO.1903, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI 400 021 ..... ()/ RESPONDENT '*/ APPELLANT BY : SHRI ANUJ KISNADWALA ()*/ RESPONDENT BY : SHRI SANJAY J. SETHI %+) / DATE OF HEARING : 28/06/2021 ,-. +) / DATE OF PRONOUNCEMENT : 24/09/2021 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-54, MUMBAI (IN SHORT THE CIT(A)) DATED 08/03/2019 FOR THE ASSESSMENT YEAR 2015-16. 2. THE SOLITARY ISSUE RAISED BY THE ASSESSEE IN APP EAL IS AGAINST THE ADDITION OF RS.8,12,500/- CONFIRMED BY THE CIT(A) IN RESPECT OF ON-MONEY ALLEGED TO HAVE BEEN RECEIVED BY THE ASSESSEE. 3. SHRI ANUJ KISNADWALA APPEARING ON BEHALF OF THE ASSESSEE NARRATING THE FACTS SUBMITTED THAT THE ASSESSEE IS A REAL ESTATE DEVELO PER. A SEARCH AND SEIZURE ACTION 2 ITA NO.2979/MUM/2019(A.Y 2015-16) UNDER SECTION 132 OF THE INCOME TAX ACT,1961 (IN SH ORT 'THE ACT') WAS CARRIED OUT IN THE CASE OF AHUJA GROUP ON 25/06/2015. THE ASSESSE E COMPANY IS PART OF AHUJA GROUP. ON THE BASIS OF SEIZED MATERIAL AND THE STA TEMENTS RECORDED DURING THE COURSE OF SEARCH THE ASSESSING OFFICER HELD THAT TH E ASSESSEE HAS RECEIVED ON-MONEY AGGREGATING TO RS.32,50,000/- DURING THE PERIOD REL EVANT TO THE ASSESSMENT YEAR UNDER APPEAL AND MADE ADDITION OF THE AFORESAID AM OUNT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 23/12/2017 PASSED UNDER SECTION 143(3) R.W.S. 153C OF THE ACT, THE ASSESSEE FILED A PPEAL BEFORE THE CIT(A). DURING FIRST APPELLATE PROCEEDINGS, THE ASSESSEE MADE TWO FOLD SUBMISSIONS. FIRST, THE ASSESSEE IS FOLLOWING PROJECT COMPLETION METHOD, TH EREFORE, THE AMOUNT OF ON- MONEY, IF ANY, RECEIVED IN RESPECT OF FLATS/SHOPS S OLD SHOULD BE TAXED IN THE YEAR IN WHICH INCOME FROM SALE OF FLATS/SHOPS IS OFFER ED TO TAX BY THE ASSESSEE. THE SECOND CONTENTION OF THE ASSESSEE WERE THAT ENTIRE ON-MONEY CANNOT BE TAXED, AS THERE WERE CERTAIN CASH EXPENDITURE THAT HAVE BEEN RECORDED IN THE PARALLEL SET OF BOOKS FOUND DURING SEARCH ACTION, THE SAME BE ALLO WED. THEREFORE, ADDITION, IF ANY, ON ACCOUNT OF ON-MONEY TO BE RESTRICTED TO 12% I. E. THE PERCENTAGE OF PROFIT APPLIED BY THE SETTLEMENT COMMISSION. THE CIT(A) DISMISSED FIRST CONTENTION OF THE ASSESSEE. IN SO FAR AS SECOND CONTENTION, THE CIT (A) PARTLY ACCEPTED THE SAME AND RESTRICTED THE ADDITION ON ACCOUNT OF ON-MONEY TO 2 5%. 3.1 THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSES SEE POINTED THAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-17 IN ITA NO.2980/MUM/2019, THE TRIBUNAL VIDE ORDER DATED 10/02/2021 IN IDENTICAL S ET OF FACTS HAS RESTRICTED THE ADDITION ON ACCOUNT OF ON-MONEY TO 12%. THE TRIBUN AL HAS FURTHER HELD THAT SINCE THE ASSESSEE IS FOLLOWING PROJECT COMPLETION METHOD , THEREFORE, THE ON-MONEY HAS TO BE ASSESSED ALONG WITH REGULAR INCOME OF THE ASS ESSEE IN THE YEAR OF COMPLETION OF THE PROJECT. 3 ITA NO.2979/MUM/2019(A.Y 2015-16) 4. PER CONTRA, SHRI SANJAY J. SETHI REPRESENTING TH E DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR UPHOLDIN G THE SAME. HOWEVER, LD. DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT AS SESSEES APPEAL FOR ASSESSMENT YEAR 2016-17 WHEREIN IDENTICAL RELIEF WAS CLAIMED BY THE ASSESSEE WAS ALLOWED BY THE TRIBUNAL. 5. SUBMISSIONS MADE BY RIVAL SIDES HEARD, ORDERS OF AUTHORITIES BELOW EXAMINED. THE ASSESSEE IN APPEAL HAS SOUGHT RELIEF ON TWO COU NTS: (I)SINCE THE ASSESSEE IS FOLLOWING PROJECT COMPLET ION METHOD THE ADDITION ON ACCOUNT OF ON-MONEY IS TAXABLE IN THE YEAR IN WHICH THE ASSESSEE WOULD OFFER INCOME FROM THE PROJECT TO TAX; AND (II) THE ADDITION ON ACCOUNT ON-MONEY BE RESTRICTED TO 12% OF THE TOTAL ON- MONEY RECEIVED. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE ADDITION ON ACCOUNT OF ON-MONEY HAS BEEN MADE IN ASSESSMENT YEAR 2015-16 AND 2016 -17 AS UNDER:- ASSESSMENT YEAR ON-MONEY RECEIVED ON-MONEY REVERSE NET ON-MONEY 2015-16 32,50,000/- NIL 32,50,000/- 2016-17 2,15,00,000/- NIL 2,15,00,000/- TOTAL 2,47,50,000/- 2,47 ,50,000/- I FIND THAT IN APPEAL FOR ASSESSMENT YEAR 2016-17 I N ITA NO.2980/MUM/2019 (SUPRA), IDENTICAL GROUNDS WERE RAISED BY THE ASSESSEE. T HE TRIBUNAL AFTER CONSIDERING THE DECISION RENDERED IN THE CASE OF ACIT VS. ISA ENTER PRISES IN ITA NO.4597/MUM/2015 DECIDED ON 11/09/2017 CONCLUDED AS UNDER:- 9. SIMILAR RATIO HAS BEEN LAID DOWN IN THE VARIOUS OTHER DECISIONS AS REFERRED TO BY THE LD. A.R. DURING THE HEARING AND STATED HEREINABOVE. WE ARE THEREFORE INCLINED TO HOLD THAT ON MONEY RECEIVED BY THE ASSESSEE WOULD ONLY B E TAXABLE AS PER THE REGULAR METHOD OF ACCOUNTING OF THE ASSESSEE. IN THE PRESENT CASE THE ASSESSEE IS FOLLOWING PROJECT COMPLETION METHOD AND THEREFORE THIS INCOME HAS TO BE ASSESSED ALONG WITH THE REGULAR INCOME OF THE ASSESSEE IN THE YEAR OF COMPLETION OF THE PROJECT. THUS, THE FIRST ISSUE RAISED IN THE APPEAL WAS DECI DED IN FAVOUR OF THE ASSESSEE. 4 ITA NO.2979/MUM/2019(A.Y 2015-16) 6. IN SO FAR AS THE SECOND ISSUE RELATING TO RESTRI CTING THE ADDITION TO 12% , I FIND THAT THE DIVISION BENCH FOLLOWED THE DECISION RENDE RED IN THE CASE OF ACIT VS.OM CONSTRUCTIONS IN ITA NO.6234/MUM/2012 FOR ASSESSMEN T YEAR 2006-07 AND THE DECISION IN THE CASE OF ACIT VS. SHANKER DEVELOPERS IN ITA NO.6235/MUM/2012 FOR ASSESSMENT YEAR 2013-14 AND HELD AS UNDER:- 13. FOLLOWING THE ABOVE DECISIONS, WE ARE INCLINED TO HELD THAT THE LD. CIT(A) IS NOT CORRECT IN NOT FOLLOWING THE ORDER OF SETTLEMENT C OMMISSION WHEREIN A RATE OF 12% HAS BEEN APPLIED ON THE ON MONEY TO ASSESS INCOME EMBEDDED THEREIN. ACCORDINGLY, WE MODIFY THE FINDING' OF LD. CIT(A) A ND DIRECT THE AO TO ASSESS THE ON MONEY @ 12% AS PER THE SYSTEM OF ACCOUNTING FOLLOWE D BY THE ASSESSEE AS HAS BEEN DECIDED BY US IN GROUND NO.1. THUS, THE SECOND ISSUE RAISED IN THE APPEAL WAS ALS O DECIDED IN FAVOUR OF ASSESSEE. 7. SINCE, BOTH SIDES ARE UNANIMOUS IN STATING THAT THE FACTS IN THE IMPUGNED ASSESSMENT YEAR ARE IDENTICAL TO ASSESSMENT YEAR 2016-17 IN ASSESSEES OWN CASE, I FIND NO REASON TO TAKE A CONTRARY VIEW. RESPECTFU LLY FOLLOWING THE DECISION OF DIVISION BENCH IN ASSESSEES OWN CASE, APPEAL OF THE ASSESSEE IS ALLOWED IN SIMILAR TERMS. 8. IN THE RESULT, APPEAL BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 2 4 TH DAY OF SEPTEMBER, 2021 SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, 0%/ DATED 24/09/2021 VM , SR. PS (O/S) 5 ITA NO.2979/MUM/2019(A.Y 2015-16) COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT , 2. () / THE RESPONDENT. 3. 1) ( )/ THE CIT(A)- 4. 1) CIT 5. 23()% , . . . , / DR, ITAT, MUMBAI 6. 34567 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI