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Judgment
By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the
assessee and dismissed the appeals of the department.
Counsel for the appellant has framed the following substantial questions of law:-
In DBITA No. 44/2018
(i) Whether in the facts and circumstances of the case, the ITAT was justified in deleting the additions of Rs. 24825300/- made by the Assessing
Officer on account of undisclosed cash receipt which was based upon documents seized during the course of search.
( ii) Whether in the facts and circumstances of the case, the ITAT was justified in deleting the addition of Rs. 24825300/- made by the AO on account
of undisclosed cash receipt which was based on documents seized during the course of search. Such documents contained specific details such as ate
of sale, cash consideration and the cheque consideration, area, total amount, name of persons etc. which clearly indicate that transaction are
composite and cash amount received on account of on money.
(iii) Whether in the facts and circumstances of the case, the ITAT was justified in holding that cash receipt sown in loose papers represent the receipt
from finishing job work and only net profit should be taxed without appreciating the fact that assessee failed to furnish any supporting evidence that he
is indulging in business of furnishing job work.â€
In DBITA No. 45/2018
(i) Whether in the facts and circumstances of the case, the ITAT was justified in cancelling the penalty amounting to Rs. 2382530/- imposed by
Assessing Officer u/s 271AAA of the Act.â€
While considering the matter, the Tribunal has observed as under:-
“8.5. We have heard the rival contentions and perused the materials available on record. In this case, it is noted the AO made the addition of
Rs.2,48,25,300/- on account of seized material found during the course of search which has been reduced by the ld. CIT(A) by Rs.10.00 lacs and
balance was sustained. It is noted from the seized documents available at paper book pages 51 to 56 that on these papers, certain details like flat no,
amount received through cheques, amount received in cash, the name of the persons from whom the amount is received etc. are mentioned. On these
papers available at Annexure A-2/19 and Annexure A-6/20-24, the statement of the assessee u/s 132(4) were recorded. In statement dated
28.01.2009, in reply to question no. 14 (PB 41), the assessee with reference to Annexure A-2/19 explained that the cash receipt mentioned on this
paper may be out of books and if after verification of accounts, these receipts are not found recorded in books, the same would be offered for tax.
Thereafter, in statement dated 11.02.09, in reply to Q.No.6 (PB 44), he stated that the cash amount mentioned on this paper is not recorded in the
books. Some person give him the extra amount for carrying out the furnishing and finishing work. This amount has no link with the business of the
firms and on such amount he agreed to pay the tax by applying the profit ratio. Again in Q. No. 19 (PB 47-48) with reference to Annexure A-6/20-24,
assessee stated that the cash amount mentioned on these papers is towards the furnishing of the flats which has nothing to do with the business of the
firm and this amount has been received for carrying out the extra work on which he would pay the tax considering the percentage of profit. It is also
noted that the assessee has declared the furnishing income in the return of income for assessment year 2005-06 to 2007-08 as mentioned at page 4 of
the order of the ld. CIT(A). Income so offered had been accepted. These fact establishes that assessee had been carrying out furnishing work in his
individual capacity. In the statement at Paper Book Pages 44 & 48, the assessee has also stated that he received the amount for furnishing work for
which he would pay the tax by applying the profit rate. The assessee has offered Rs.10 lacs in A.Y.2009-10 and Rs.20 lacs in A.Y. 2010-11 on this
account. Thus the assessee has offered Rs.30 lacs which gives a profit rate of 12.08%. It is also a settled law that total receipt cannot be income.
Further, if Revenue’s contention is accepted that these receipts pertains to the business of various Group Concerns then these cannot be taxed in
the hands of assessee. During and after the search, assessee states that these receipts are of extra or additional work done by him to certain
purchaser of flats. These receipts have to be taxed in the hands of assessee by Revenue then total receipts cannot be added to the total income. Only
profit margin has to be taxed. Therefore, we are of the view that entire amount cannot be added to the income of the assessee considering the
statement of the assessee u/s 132(4) of the Act. It is also pertinent to note that the assessee has declared income of Rs.10 lacs in A.Y. 2009-10 and
Rs.20 lacs in A.Y.2010-11 in respect of such receipt which is also assessed by the AO, therefore, the addition made by the AO and partly confirmed
by the ld. CIT(A) is deleted. Thus Ground No.2 of the assessee is allowed and that of the Revenue in Ground No.1 (I & II) is dismissed.
We are in complete agreement with the view taken by the Tribunal. No substantial question of law arises in appeal no. 44/2018. Hence, the same
stands dismissed.
In view of the disposal of substantive appeal, penalty appeal (DBITA No. 45/2018) also will not survive.
Hence, both the appeals stand dismissed.