RUPINDER TANDON, MUMBAI V. ACIT CIRCLE- 24 (3), MUMBAI

ITA 7874/MUM/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9416 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 12-10-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 22-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 132; 143(3); 101

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND SHRI AMARJIT SINGH, AM आयकर अपील सं/ I.T.A. No.7874/Mum/2019 (निर्धारण वर्ा / Assessment Years: 2015-16) Rupinder Tandon Flat No. 192, Kalpataru Pinnacle, New Link Road, Opp, Inorbit Mall, Goregaon (W), Mumbai- 400104. बिधम/ Vs. ACIT Circle-24(3) Piramal Chambers, Lalbaug, Mumbai- 400012. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AGFPT2922B (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 13/10/2022 घोषणा की तारीख /Date of Pronouncement: 31/10/2022 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-36, Mumbai dated 29.10.2019 for the assessment year 2015-16. 2. None appeared on behalf of the assessee. The only ground of appeal of the assessee is against the action of the Ld. CIT(A) upholding the addition of Rs.1,34,74,500/- made by the AO as undisclosed income. 3. Brief facts the AO noted is that the assessee had filed e-return of income on 30.09.2015 for AY. 2015-16 declaring total income at Rs.35,70,290/-. Later, the case of the assessee was selected for limited scrutiny under CASS. The AO noted that on 30.11.2016 he received an information from Addl. DIT (Inv.), Unit-4, Mumbai that during search Assessee by: None Revenue by: Ms. Mahita Nair (Sr. AR) ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 2 and seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter “the Act”) in the case of Runwal Group, the statement of Shri Sandeep Runwal, (director of the group) was recorded u/s 132(4) of the Act on 20.11.2014; and from the contents of the statement it came to light that the assessee had paid “on money” to this group in the project “Runwal Elegante Oshiwara”, Andheri. Therefore, the AO issued show cause notice (SCN) to the assessee about the “On Money” transaction amounting to Rs.1,34,74,500/- assessee had given to Runwal Group for the project “Runwal Elegante”. Pursuant to the show cause notice the assessee requested for the copy of the statement of Shri Sandeep Runwal and an opportunity to cross-examine him. After giving a copy of the statement of Shri Sandeep Runwal, the AO notes that in order to facilitate the cross-examination requested by the assessee, he had summoned Shri Sandeep Runwal to attend on 07.11.2017 at his office. According to the AO, Shri Sandeep Runwal asked for adjournment and again the matter was fixed on 14.11.2017. However, Shri Sandeep Runwal did not turn up on that day also. Accordingly the cross- examination could not be facilitated of Shri Sandeep Runwal. However, the AO notes that the assessee has raised four points regarding the show cause notice and after taking note of all these contentions, the AO not being satisfied added Rs.1,34,74,500/- to the total income of the assessee as undisclosed income. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) which was dismissed by him after considering the written submission of the ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 3 assessee and after hearing the Ld. AR of the assessee by holding as under: - “4.1. 1 I have carefully gone through the findings of AO in the assessment order, written submission filed by the Appellant and material available on record. A search and seizure action u/s 132 of the Act was carried out on Runwal Group on 17.11.2014. During the course of search incriminating materials were found and seized in the form of application for bookings Flat revealing that the Runwal Group Companies had sold flats in various projects to buyers wherein the sale consideration recorded in the books of accounts maintained under the ERP systems were much lesser than the sale price mentioned in the flat booking form. The Group Company interalia include a company known as M/s Runwal Projects Pvt. Ltd which developed the project "Runwal Elegante" in which the appellant had also booked a flat. Further, in the Statements recorded under oath of various persons of Runwal Group including Shri Anand Runwal, Head of Sales of Runwal Group, Ms. Sujatha Rao, Sales and Customer Relationship Manager & Personal Secretary to Shri Sandeep Runwal, Shri Kishore P Jain, head of Runwal Group and Shri Shamsher Dutt, Senior Vice President, Customer Relationship of Runwal Group have admitted & confessed the fact that the group was receiving On-money from sale of flats to various customers. When these facts alongwith the incriminating material found during the course of search were confronted to the Managing Director, Shri Sandeep Runwal he admitted in his statement recorded u/s 132(4) of the I.T. Act, and accepted the fact that on sale of flats the group company's received On- money over and above the registered value of properties. Accordingly, based on incriminating material found during the course of search and also on the basis of admission of various personnel working for the Runwal Group , the Runwal Group declared an additional income of Rs.38.06 crores in various companies' names including an amount of Rs.18,82,59,0207- towards project Runwal Elegante for the assessment year 2015-16. Subsequently, the case of the appellant being one of the buyer of the Flat in project "Runwal Elegante" was taken up for scrutiny. The AO completed the assessment u/s 143(3) of the Act and made addition of Rs.1,34,74,500/- as income from other sources on account of On-money paid to M/s Runwal Group in the Project "Runwal Elegante". Aggrieved, by the additions made by the AO, the appellant is in appeal before the undersigned. 4.1.2 During the Appellate Proceeding the AR of the appellant attended, filed written submission and argued the case. The AR of the assessee submitted that the appellant has not paid any On- Money for purchase of flat in the Project ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 4 "Runwal Elegant" and in the statement of Shri Sandeep Runwal on money was offered by him by applying the formula of highest sale rate at the insistence of the Department, he made declaration n order to buy peace of mind and to avoid protracted litigations, he has no documentary proofs or evidences or incriminating material of having received on money and it is simple arithmetic calculation of working the on money. It was further submitted by the AR that the Hon'ble ITAT, Mumbai in the case of M/s Runwal Homes Pvt. Ltd and Runwal Projects Pvt. Ltd has allowed the appeals of the assessee and directed the assessing officer to delete the additions made by the AO in their cases. Thus, the AR submitted that the addition of Rs. 1,34,74,500/- made by the AO in the hands of the assessee being alleged on money paid by the assessee must be deleted. 4.1.3 I have carefully gone through the submissions of the appellant and materials available of the record. I do not find any merit in the submission of the appellant. I have carefully gone through the order of Hon'ble ITAT, Mumbai passed in the case of M/s Runwal Projects Pvt. Ltd in ITA No.5620/Mum/2017 order dt.27.07.2018 filed by the appellant and available on record. I find that in the said order of Hon'ble ITAT, the Hon'ble ITAT at Para 9 has clearly mentioned certain undisputed facts of the case as under, "the fact that the assessee is receiving on-money from sale of certain flats is not disputed'. I observe that the assessee therein has admitted during the course of search the fact of receipt of 'On Money' on sale of flats and same is also offered in the return of income filed by the assessee. In the said case, the only plea of the assessee was with respect to restricting the addition on account of On- Money to the extent of incriminating material found during the course of search and to tax the On-money in the year of completion of project by the assessee as the assessee is following the project completion method. The assessee never disputed the fact of receipt of on money but only disputed is the manner in which the undisclosed money was computed and the year of taxability of undisclosed income in its case. Thus it was an admitted facts in the case of M/s Runwal Project that the assessee was receiving On- money of sale made to various customers and same was also upheld by the Tribunal. For the sake of clarity and completeness, the relevant finding of Hon'ble Tribunal is reproduced as under: "9. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. The fact that the assessee is receiving on-money from sale of certain fiats is not disputed. The assessee. during the course of search has categorically admitted that it has received on- money from certain customers. The assessee has quantified undisclosed income ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 5 on account of on-money receipt based on incriminating material found as a result of search. Such admission has been reiterated by filing a letter during the course of assessment proceedings on 23-09-2016. The AO made addition towards undisclosed income quantified on account of receipts of on-money from sale of flats on the basis of statement recorded during the course of search which is based on incriminating material in the form of application for booking flats found during the course of search. According to the AO, the assessee is selling flats for higher rate, whereas while recording sale consideration in the books of account in ERP system, showing much lesser sale consideration. The AO further observed that the sale price per sq.ft.in Runwal Elegante is between Rs.23,000 to Rs.32,000 per sq.ft whereas in the books of account the assessee has considered much lesser sale price which is ranging between Rs.12,000 to Rs.21,600. Accordingly, the AO has determined undisclosed income by taking average rate of Rs.21,400 per sq.ft. and applied such rate for 21 flats sold in project Runwal Elegante to determine undisclosed income of Rs. 18.82,59,020. It is the contention of the assessee that undisclosed income quantified during the course of search is under mistaken facts and also under coercion without referring to necessary documents. Therefore, only on the basis of admission during the course of search in statement recorded u/s 132(4), addition cannot be made, more particularly, when the assessee has demonstrated with evidence that in many cases, the amount shown in the books of account is much higher than the amount recorded in incriminating material being application for booking. The assessee further contended that in 4 cases, i.e. Flat No.A-406, A-804, A-605 & A1601, the sale consideration as per ERP system in assessee's books is higher than or equal to amount recorded in incriminating material being application for booking. But the AO has taken average rate of Rs.21,000 and then compared such rate to the average rate determined by dividing total sale consideration from total saleable area ignoring the fact that the average rate has been determined by taking into account rate per sq.ft. on carpet area of the flat. 10. There is no dispute with regard to the fact of receipt of on-monev from sale of flats. This fact has been admitted by the assessee including its director in the statement recorded during the course of search. This fact is also supported by incriminating material found as a result of search. During the course of search, the department has found application form, booking form of certain flats as per which the rate charged for sales is higher than the amount recorded in the books of account. Accordingly, undisclosed income of Rs. 18,82,59,020 has been quantified from sale of 21 flats in project RunwalElegante. The assessee has filed paper book containing copies of application for booking found during search. On perusal of documents filed by ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 6 the assessee, we find that in 4 cases, the rate charged by the assessee and recorded in the books of account is much higher than or equal to the amount recorded in the incriminating material found in the form of application for booking. We further observe that the AO has arrived at average rate of Rs.21,400 per sq.ft. and then applied such rate to 21 flats and compared the rate as per books of account of the assessee recorded in ERP system to arrive at a difference of Rs. 18,82,59,020. While doing so, the AO has determined average rate as per books of account by dividing total sale consideration from the saleable area of the flat to arrive at average rate per sq.ft., whereas while determining undisclosed income average rate has been arrived at on the basis of total carpet area of the flat. There is a lacunae in the quantification of undisclosed income inasmuch as that by adopting average rate of Rs. 21,400 per sq. ft. and applying such rate uniformly to all flats without any evidence found as a result of search. In fact it is the case of the assessee also. The assessee never disputed the fact of receipt of onmonev: however, disputed the manner in which the undisclosed income has been quantified. Therefore, we are of the considered view that the AO was incorrect in quantifying undisclosed income by adopting average rate and then applying such rate to all flats sold in the project without any evidence found as a result of search. This finding of ours is supported by the decision of ITAT, Mumbai Bench "D" in assessee's group company, M/s Runwal Homes Pvt Ltd in ITA No.5621/Mum/2017 dated 20-12- 2017, wherein under similar set of facts, where the assessee is also a party to the search proceedings, after considering relevant materials, the co-ordinate bench held that on-money receipt should be worked out on the basis of evidence found as a result of search. The relevant portion of the order of ITAT is extracted below:- "7. We have heard the rival submissions and carefully considered the same along with the orders of tax authorities below. The first issue involved in this ground before us is whether the Assessing Officer was correct in law in adding a sum of Rs. 63,39,52,372/- as alleged on money received on sale of the flats and the second issue involved is if any addition has to be made during the impugned assessment year, whether the addition of the on money has to be made on the basis when the on money has been received or on the basis of the method of accounting followed by the assessee. It is not disputed that the assessee is following project completion method. The undisputed facts before us are that search and seizure action u/s. 132 of the IT Act took place on 17.11.2014 on the assessee as well as its group company. The assessee submitted return of income on 31.10.2015 declaring total income of Rs.13,48,82,480/-, which was subsequently revised to Rs. 13,45,71,200/- on 7.07.2016 and finally revised the ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 7 return on 30.12.2016 by including therein a sum of Rs. 72,50,000/- and paid taxes thereon. The sum of Rs. 72,50,OOO/- declared by the assessee relate to the Chestnut project, single building project completed during the year in respect of which evidence was found during the course of the search for on money received and it was also surrendered by the assessee company during the course of the search and is included in the sum of Rs.63,39,52,372/- added by the Assessing Officer to the assessee's income. We noted that the Assessing Officer while computing the total income of the assessee has considered the revised return declared by the assessee at Rs. 13,45,71,200/- Therefore, the addition of Rs.72,50,000/- has to be confirmed and, accordingly, we confirm the said addition of Rs.72,50,000/-.The assessee has also included the said amount in its revised computation and paid taxes thereon on 27.722076. 8. Now coming to the other addition included in the sum of Rs. 63,39,52,372/-. The following additions were made by the Assessing Officer- Project namely Runwal Greens Towers - 1,2 & 3 and Commercial Rs. 31,1 4,02,41 2/- Project namely Runwal Greens Towers - 4, 5, 6, 7&8 Rs. 3 1,52,99, 960/- Total Rs.63,39,52,372/- It is not disputed that the on-money on the basis of the seized material received by the assessee comes to Rs. 19,94,78,821/-out of which the addition of Rs. 72,50,000/~ has already been confirmed by us and has been duly taken in to account by the assessee in the revised computation of income submitted by the assessee during the course of hearing before the Assessing Officer and on which the assessee has duly paid the tax. Now the question before us remains to the disputed addition amounting to Rs. 62,67,02,3727- The total on-money on the basis of the seized material found during the course of search relate to the ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 8 period of the booking done from March 2014 to November 2014. The amount so worked out comes to Rs. 19,94,78,821/- as detailed under- On-money of flats as per seized material - Rs. 13,44,68,725/- On-money of shops as per seized material - ' 6,50,10,096/- Out of the said sum Rs. 72,50,000/- has already been confirmed by us in the preceding paragraph, therefore, on-money on flats as per seized material remains at Rs. 19,22,28 l 821/-. We noted that the Assessing Officer on the basis of seized material found during the course of search relating to the period of March 2014 to November 2014 took the view that the assessee might have received on-money in all the bookings and therefore, he estimated cash portion on other units sold by taking the highest rate of sale of other units although no on-money evidence were found during the course of search. The Assessing Officer while confirming the addition relied on the statements of the staff of the assessee as well as the statement of the Director Shri Subodh Runwal, mainly in reply to question nos.16, 17 and 18, which are reproduced as under: "Ans toQ.16 "Sir as I have answered in earlier question I again reiterate that this project was a joint venture with HDFC Limited right from the inception till they exited. Subsequently to that the market has become very competitive and due to opening of a forest land we had to sell aggressively to achieve the numbers from the calendar year 2014, I accommodated a few customers who wanted to pay part consideration in cash. The difference in the above chart is specifically related to these customers who have been accommodated. I offer this difference as my income. I hereby farther reiterate and state that prior to this we have never accepted in cash for any of the units sold in that project." Thus the assessee has acknowledged the discrepancy and has accepted that "on- money" has been taken in all the above instances. Further the assessee was asked to state the other instances where unaccounted cash has boon taken in lieu of sale of residential / commercial units in their projects. Following is the except of the relevant portion of his statement "Q.17 Please provide the details as to other fiats in which similar practice is followed. Ans: Although in the other cases, I do not agree that in all the cases cash has been accepted by me over and above the agreement value. But to avoid protracted litigations with the department and to buy peace I accept the difference appearing in the chart beginning from 1st January 2014 till date as my additional income over and above the regular income for the respective ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 9 years as on- money (Cash received over and above the agreement value), I am submitting the working marked as Annexure-1 to this statement which has two pages. Q. 18 As per the working submitted as part of annexure to answer to question number 16, the amount of on money accepted in the project namely Runwal Greens (M/s Runwal Homes Private Limited), is Rs.63,39,52,372/- Please confirm ? Ans: Sir, due to reasons-mention above I confirm the amount of Rs. 63,39,52.372A (which as per Annexure-1), as the on money accepted in the projects Runwal Green (M/s. Runwal Homes Private Limited), and the same has been offered as additional income over and above the income declared in the M/s. Runwal Homes Private Limited. Here / want to state that Olive project is under the proprietorship of Mr. Subhash Runwal." We have gone through the answer to question nos. 16, 17 and 18. We noted that in reply to question no. 16, Director of the assessee company stated that initially the project was joint venture with HDFC Limited. Subsequently, when the market has become more competitive and due to the opening of the forest land they had to sell aggressively, in order to achieve the numbers from the calendar year 2014 and, therefore, in order to accommodate few customers who wanted to pay part consideration in cash, they accepted cash for few units. He has categorically stated that prior to that date they have never accepted any cash. In reply to question no. 17, he has categorically stated that he did not agree that in all cases cash has been accepted over and above the agreement value but he agreed to surrender the difference as its additional income over and above the regular income for the respective years as on-money to avoid protracted litigations with the department and buy peace. On that basis the total on-money received was worked out at Rs. 63,39,52,372/- and added to the income of the assessee. It is undisputed fact that on the basis of the documents and evidence produced before us, the copy of which are available at pages 436 to 441 of the paper-book, the on money received, on the basis of the seized documents, by the assessee in respect of flats comes to Rs. 13,44,68,725/-and in respect of shops comes to Rs. 6,50,10.096/-. For the rest of the addition in respect of which no incriminating material was found, we noted from pages 439 to 441 of the paper book, the Assessing Officer just estimated the on-money of the flat @15,750/- per sq. ft totaling to Rs. 33,47,33,1'017- and that of the shops @26,000/-totaling to Rs. 9,97,40,450/-. But the Assessing Officer was fair enough to state that no incriminating material was found but had estimated @15750/- per sq. ft for flats and @26000/- per sq. ft. for shops. This is a case where assessment has been ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 10 completed u/s. 143(3), therefore, the addition has been made by the Assessing Officer as if the assessee has received whatever is stated in the documents executed by the assessee. In our opinion, the onus is on the Revenue to prove that the assessee has actually received the consideration much more than what has been agreed to or stated in the documents executed between the intended buyer and the assessee. No cogent material or evidence was brought to our knowledge by the learned DR even though he has vehemently relied on the order of the Assessing Officer as well as the statement of the Director of the company, which may prove that the assessee has received consideration @15750/- per sq. ft for flats and @26000/- per sq. ft for shops. There has been search and seizure in the case of the assessee. If the assessee would have received consideration much more than what is stated in the documents, for which no evidence is found during the course of search, in our opinion, no addition can be sustained. There cannot be any agreement against the statute. The assessee agreed for declaration of the income for which no material was found merely to avoid protracted litigations with the department and buy peace. The assessee has earned income; the onus is on the Revenue to prove that the income has accrued to the assessee. Even otherwise also since there has been a search in the case of the assessee, if the assessee would have earned such income there must have been some evidence found that either the assessee has made investment outside the books of account or has spend this income in one way or the other. Income tax is leviable u/s. 4 of the I.T Act on the real income. If income has not accrued or received by the assessee, the assessee cannot be burdened for income tax liability. From the documents available on record, it is apparent that the Assessing Officer has estimated the booking amount and on that basis assumed that the assessee would have received the on-money. He made the presumption as if the assessee has sold all the flats @ 15,750/- per sq. ft and the shops @26000/- per sq. ft. From the documents in the booking, it is evident that different flats and different shops have been booked at different rates by the assessee. From page 443 of the paper-book, as found during the course of search, the assessee has given discount on the bookings at different rates to different customers. We noted that in respect of two shops although the base rate has been mentioned @21,000 per sq. ft, the assessee has given discount around ' 4150 per sq. ft and booked the shops @ 17500 per sq. ft including the club charges of Rs. 750/-. Similarly, in respect of flat also we noted that the base rate has been mentioned @12,000/-per sq. ft and after adding floor rise, club charges, infra charges etc., total rate came to Rs. 14375 per sq. ft. and the assessee has also given discount of ' 1000/- and ultimately booked the flat @ 13,350 per sq. ft. Even on the same very page had the details of the flats which ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 11 had been booked @ 14550/-, 14300/- and Rs. 13225/- per sq. ft. Therefore, the conclusion drawn by the Assessing Officer while making the addition is based just on assumption as if the assessee the assessee has sold all the flats @15750 per sq. ft. In view of this fact, we delete the addition of Rs. 33,47,33,1 ,01 made on the basis of estimating the sale consideration in respect of the flats @15750/- per sq. ft. and Rs. 9,97,40,450/- based on the presumption as having being booked shops @ 26000/-." 11.Coming to the second leg of arguments of the assessee. The Ld. AR for the assessee submitted that since the assessee is following project completion method for recognition of revenue, total receipts from the project including on- money receipts shall be taxed in the year in which the project has been completed. The Ld.AR further submitted that since the project was not completed during the year, the amount received by the assessee is merely a booking amount, i.e. only advance received for booking flat; therefore, the same cannot be added during the impugned assessment year. In this regard, he relied upon the decision of IT AT, Mumbai Bench "D" in assessee's group concern's case cited supra wherein the co-ordinate bench, by following various decisions including the decision of Hon'ble Supreme Court in the case of CIT vs Bilhari Investments Pvt Ltd (supra) and also Special Bench decision of Mumbai Benches of the Tribunal in the case of Wall Street Construction Ltd vs JCIT 101 ITD 156 (Mum)(SB) held that when assessee is following project completion method for recognition of revenue, total receipts from the project including on- money received should be taxed in the year in which the project is completed. The relevant portion of the order is extracted below:- ".......... The learned AR at this juncture has taken a argument that it is a case where the assessee was following project completion method. Project completion method has been followed consistently by the assessee. Both the projects relating to the flats and the shops in respect of which the evidence were found for receipt of on-money by the assessee were not completed during the year. Since these projects were not completed during the year, the amount received by the assessee is merely a booking amount i.e. only the advance received for booking of the flat/shop. These amounts therefore in our view cannot be added during the impugned assessment year. We are of the view that the project completion method is one of the method of accounting where the expenses identifiable with the project are to be allowed in the year when the project is completed. Similarly, the receipt from the project is to be accounting ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 12 for as income only in the year in which the project is completed. Since both the project for the flats as well as shops were not completed during the year therefore, respectfully following the decision of the hon'ble Supreme Court in the case of CIT vs. M/S Bilahari Investment (P) Ltd 299 ITR 1 (SC), Special Bench decision of the Mumbai Benches of the Tribunal in the case of Wall Street Construction Ltd. vs. JCIT 101 ITD 156 (SB)(Mum); ITO vs. Panchvati Developers 115 TTJ 139 (Mum) and that of JCIT vs. K Raheja (P) Ltd. 102 ITD 314 (Mum), we delete the addition during the impugned assessment year and direct the AO to make the addition in respect of these on-money in the respect assessment years in which the projects have been completed." 12. In this view of the matter and respectfully following co-ordinate bench decision in the case of Runwal Homes Pvt Ltd (supra), we are of the considered view that the AO was erred in quantifying undisclosed income by taking average rate of Rs.21.400 per sq.ft. and applying such rate to 21 flats without any evidence found as a result of search. Hence, direct the AO to restrict the quantification of undisclosed income to the extent of Incriminating material found as a result of search. We further direct the AO to delete addition made towards on-money received from sale of flats in the impugned assessment year and make addition in the year in which the project has been completed, since the assesses is following project completion method for recognition of revenue. Hence, we set aside the issue for the limited purpose of quantification of undisclosed income on the basis of incriminating material found as a result of search and to make addition in the year in which project is complete. 13. In the result, the appeal filed by the assessee is partly allowed, for statistical purpose. "(Emphasis Supplied) 4.1.4 Thus, as evident from above findings of the Hon'ble ITAT, the appellant M/s Runwal Projects Pvt. Ltd has throughout admitted of receipt of On-money from sale of flats to various buyers, offered the additional income in its return of income and same is also confirmed by the Hon'ble Tribunal vide its order in ITA No.5620/M/2017 dated 27.07.2018. The submission of the assessee, that the Hon'ble Tribunal has deleted the additions made in the case of M/s Runwal Homes Pvt. Ltd and M/s Runwal Projects Pvt, Ltd is factually incorrect. Moreover, the statement of Shri Sandeep Runwal declares a detailed working of On-money received alongwith the names of the clients who had given the same. And as correctly observed by the AO the appellant's claim that once On-money was added to the income of Shri Sandeep Runwal, the same cannot be included in the income of the appellant is nothing but the acceptance ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 13 of appellant of having paid On-money to the Sh. Sandeep Runwal. Hence, I do not find any merit in the submission of the assessee and I am of the considered opinion that the AO has rightly made addition of Rs.1,34,74,500/- on account of On-money paid towards purchase of flat in project 'Runwal Elegante'. Accordingly, I confirm the addition of Rs.1,34,74,500/- made by the AO to the total income of the assessee. Thus, the ground of appeal of appeal is Dismissed. 5. In the result, the appeal for the AY 2015-16 is Dismissed.” 4. Aggrieved by the aforesaid order of the Ld. CIT(A), the assessee has preferred this appeal before us. 5. However, none appeared on behalf of the assessee, though the matter have been fixed on several occasions for hearing and the appeal is pending adjudication from the year 2019; and further the notices issued to the assessee (Registered AD letter) has been returned unserved on two occasions. Therefore, we are inclined to decide the appeal after hearing the revenue/Ld. DR. We note that the assessee is a Doctor, who has filed this appeal against the action of Ld. CIT(A) confirming addition of Rs.1,34,74,500/- as undisclosed income of the assessee. The AO has made the ibid addition based on statement given by Shri Sandeep Runwal (director of Runwal Group) recorded during search u/s 132 of the Act wherein he has accepted that certain flat owners had given “On Money” to the builder/Shri Sandeep Runwal for the flats they purchased which was not shown in the books of the builder/Runwal Elegante Project and not shown as sale consideration by assessee (buyers) in their registered document. According to AO, since the assessee’s name also figured in the list of persons/owners to have given “On Money” (as per the statement of Shri Sandeep Runwal ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 14 to have given “On Money”) for purchase of flats in the project Runwal Elegante, the AO show caused, the assessee as to why the amount of Rs.1,34,74,500/- should not be added as undisclosed income, to which the assessee requested for copy of the statement as well as opportunity to cross-examin Shri Sandeep Runwal. According to AO, in order to facilitate the cross-examination, he summoned Shri Sandeep Runwal to appear before him twice but on both occasions Shri Sandeep Runwal did not appear. So the cross-examination could not materialize. This claim of AO has been contested by the assessee. But the AO rejected same and made the addition of Rs.1,34,74,500/- as undisclosed income of the assessee. On appeal, the Ld. CIT(A) noted that the Tribunal has already confirmed the fact that “On Money” was received by the Runwal Group cases viz. (ITA. No.5620/Mum/2017 in the case of M/s. Runwal Projects Pvt. Ltd. dated 27.07.2018) wherein the Tribunal held at para no. 9 that the assessee in that case M/s. Runwal Project Pvt. Ltd. was receiving “On Money” from sale of certain flats and that the same was offered in the return of income. Based on that the decision of the Tribunal in the case of M/s. Runwal Projects Pvt. Ltd. and M/s. Runwal Homes Pvt. Ltd, the Ld. CIT(A) has found that the builder had received “On Money” (over and above the sale consideration shown in the registered sale-deed which was not shown in the books of the builder) which fact was corroborated by various employees of the builder and admitted by the director whose statement was recorded (Shri Sandeep Runwal) wherein he has given the list of customers including the names of the assessee to have given ITA No.7874/Mum/2019 A.Y. 2015-16 Rupinder Tandon 15 “On Money” to the builder. Based on this clinching fact, the Ld. CIT(A) has confirmed the action of the AO. Before us, no paper book has been filed by assessee. Nothing has been brought on record to show that the impugned action of the Ld. CIT(A) was based on no material. Therefore, we are of the view that the Ld. CIT(A)’s view on the facts and circumstances is a plausible view and at no rate can be termed as perverse. Therefore, we confirm the action of the Ld. CIT(A) and dismiss the appeal of the assessee. 6. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on this 31/10/2022. Sd/- Sd/- (AMARJIT SINGH) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 31/10/2022. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुंबई / ITAT, Mumbai