DY. COMMISSIONER OF INCOME TAX, MUMBAI vs. WHEELABRATOR ALLOY CASTINGS LIMITED, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL“G” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 8033/MUM/2025 (AY: 2018-19) ITA No. 8034/MUM/2025 (AY: 2019-20) ITA No. 8035/MUM/2025 (AY: 2020-21) ITA No. 8036/MUM/2025 (AY: 2021-22) ITA No. 8037/MUM/2025 (AY: 2022-23) ITA No. 8038/MUM/2025 (AY: 2023-24) ITA No. 8039/MUM/2025 (AY: 2024-25) (Physical Hearing) Wheelabrator Alloy Castings Limited ACIT, Central Circle – 4(1), Mumbai 4th Floor Runwal and Omkar Esquare v Room No. 418, 4th Floor, Kautilya Eastern Express Hwy, Opp. Sion s Bhavan, C-41 to C-43, G Block, Chunabhatti Signal, Sion, S.O. Bandra Kurla Complex, Bandra Mumbai – 400022. (East), Mumbai – 400051. [PAN: AAACW0462F] Appellant / Assessee Respondent / Revenue & ITA No. 7707/MUM/2025 (AY: 2018-19) ITA No. 7708/MUM/2025 (AY: 2019-20) ITA No. 7709/MUM/2025 (AY: 2020-21) ITA No. 7710/MUM/2025 (AY: 2021-22) ITA No. 7711/MUM/2025 (AY: 2022-23) ITA No. 7712/MUM/2025 (AY: 2023-24) ITA No. 7713/MUM/2025 (AY: 2024-25) DCIT, Mumbai Wheelabrator Alloy Castings Limited Room No. 420, 4th Floor, Kautilya v 4th Floor Runwal and Omkar Esquare Bhavan, Bandra Kurla Complex, s Eastern Express Hwy, Opp. Sion Bandra (East), Mumbai – 400051. Chunabhatti Signal, Sion, S.O. Mumbai – 400022. [PAN: AAACW0462F] Appellant / Revenue Respondent / Assessee Assessee by Shri Rakesh Joshi, CA Revenue by Shri Basavaraj Hiremath, CIT-DR a/w Shri Rajgopal Parthasarathi, Sr. DR Date of Institution 28.11.2025 Date of hearing 13.07.2026 Date of pronouncement 07.09.2026 Order under section 254(1) of Income Tax Act PER BENCH;

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

bogus expenses, without considering the facts and circumstances of the case.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

income, and that the assessee failed to furnish any evidence to substantiate the nexus between the alleged on-money receipts and the cash expenditure, thereby rendering the telescopic benefit unsustainable in law?"

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

to much lower than 15% of "on-money received" and thus, contradicts the finding of CIT(A) itself? 3. Rival submissions of both the parties have been heard and record perused. The learned authorised representative (AR) of the assessee submits that the assessee has raised additional grounds of appeal, which relates to validity of reopening and notice under section 148, which he is not pressing at this stage. In other years, the assessee has raised similar grounds of appeal in primary grounds of appeals, thus, he is not pressing such grounds in all years. Considering the submission of the learned AR of the assessee, the additional ground of appeal raised by the assessee is dismissed as not pressed. Now adverting the consideration of other grounds of appeals. 4. Brief facts of the case are that the assessee is a company engaged in the business of real estate. The assessee filed its return of income for A.Y. 2023-24 on 27.10.2023, declaring income of Rs. 42.43 crore. The assessee is a part of Runwal Group, Mumbai. A search action under Section 132 was carried out on Runwal Group and its related entities and on various individuals related to the group on 06.10.2023. The assessee is one of the entities covered in the search action. During the search action and post-search investigation, the report reveals that the assessee company was accepting ‘on-money’ on transactions on sale of flats and commercial properties. Due to the search action, the case was selected for compulsory scrutiny. During the assessment, the Assessing Officer (AO) issued various notices seeking various details. During the course of

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

assessment proceedings, the Assessing Officer recorded the modus

operandi of on-money transactions and concluded that the assessee has taken on-money. The Assessing Officer also recorded parts of certain

statements recorded during the search action. The Assessing Officer on

the basis of evidences found during search action and the statement of

key persons recorded details of on-money received during A.Y. 2023-24,

along with the names of buyers and the amount of cash received, in para

6.9 of his order, in the following manner;

Sr. Date of Project Name Unit No. Client’s Name Amount in No. Transaction Rs. Lac 1 27.04.2022 Forests T9-2204 Nilesh Satpal 30 2 27.04.2022 Forests T9-3903 Vaibhav Holmukhe 20 3 21.05.2022 Forests T11-2205 Mr. Sukarna Bhoker 0.51 4 30.05.2022 Forests T4-G04 Arun Maithani 20 5 03.06.2022 Forests T11-3802 Pankaj Rai 10 6 04.06.2022 Forests T11-2806 Rushab Chedda 15 7 07.06.2022 Forests T11-2605 Anil Richhawal 10 8 08.07.2022 Forests T11-3108 Tarini Panigrah 9 9 08.07.2022 Forests T11-3308 Sukant Panigrah 9 10 20.09.2022 Forests T3-P05 Jatin Trivedi 23 11 07.10.2022 Forests T9-4001 Rajesh Jaiswal 25 12 11.10.2022 Forests T9-4404 Vinod Bansode 5 13 20.10.2022 Forests T9-4601 Mr. Manoj Singh 20 14 30.12.2022 Forests T9-3904 Manoj Nahar 33.5 15 03.01.2023 Forests T11-5001 Rajesh Hadavale 20 16 03.02.2023 Forests T10-4407 Pradeep Sawani 12 17 06.02.2023 Forests T9-0901 Navin Kumar Amal 55 18 06.02.2023 Forests T9-3503 Niraj Jayswal 3.5 19 07.02.2023 Forests T10-0207 Nilesh Kasluri 10 20 10.02.2023 Forests T11-0305 Rajesh Shinde 20 21 02.03.2023 Forests T11-3907 Dasvir Ankhi 8 22 08.03.2023 Forests T9-3104 Deepak Vyas 21 23 17.03.2023 Forests T11-5102 Rakesh Sarin 10 24 17.03.2023 Forests T9-3501 Vinesh Sharma 18 25 15.04.2022 Forests T9-4004 Anand Bois 25 Total 432.51 5. On the basis of the aforesaid tabulation, the AO issued a show cause

notice. The AO recorded that, in response to the said notice, part details

were furnished vide reply dated 13.03.2025. The AO recorded certain part

of the reply of assessee in para 6.11 of his order. The assessee, in its reply, submitted that the allegation in the show cause notice was based on

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

the diary maintained by Smt. Lucy Roy Choudhary. The Assessee company has no knowledge about the said diary. The said diary has no correlation with the assessee company. The entries in the blue-coloured diary seized from Smt. Lucy Ray Choudhary are insufficient to prove receipt of on- money. Without independent corroborating evidence, the entries in the diary are vague and open to interpretation wherein one person may assume that the figures are in lacks while others may interpret them as in thousands. There are a number of possibilities that can be derived from the figures mentioned in the alleged diary. 6. The statements of Smt. Lucy Ray Choudhary and Shubodh Runwal referred to in the show-cause notice have been retracted by their affidavits dated 16.01.2024 and 18.01.2024, respectively. Copies of their affidavits were filed. Once the persons have refused to take ownership, the allegations and statements cannot be relied upon. No cash trail was established to prove that the Assessee Company received any such on- money on sale of flats in any of the projects. The assessee also filed confirmations from certain flat owners wherein they clarified that no such amount was ever paid. In without prejudice contentions, the assessee submitted that the entire alleged on-money cannot be added in its entirety and that only the profit portion can be taxed. To support such contention, the Assessee relied upon various case laws on the issue of retraction of statements as well as taxing only the income component of alleged on- money and not the entire receipt. The assessee specifically relied upon the decision of the Gujarat High Court in CIT v. President Industries, 258 ITR

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

654 (Gujarat), and the Bombay High Court in CIT v. Hariram Bhambani in ITA No. 4915 and 5130/Mumbai/2026, and Sumit Builders in ITA No. 313 of 2013.The reply of the assessee was not accepted by the learned AO. The AO held that, in the search action and post-search investigation report, it was found that during the relevant financial year, the assessee has received Rs. 4.32 crore as on-money, which had not been offered for tax. The AO added Rs. 4.32 crore as income of the assessee from business. 7. The AO further noted that during the search action, it was found that the Assessee had booked sub-contract expenses from Senghani Creators Private Limited. Senghani Creators Private Limited is a contracting company taking contracts from builders for construction of residential and commercial buildings in and around the Mumbai and Thane regions. The contracts were sublet to various subcontractors. During the course of the search action, it was found that some of the subcontractors of Senghani Creators Private Limited were not genuine and had raised bogus bills. The Assessee had claimed Rs. 6.23 crore towards expenses from such non- genuine subcontractors of Senghani Creators Private Limited. The AO issued a show-cause notice asking the Assessee to explain as to why the subcontracting expenses of Rs. 6.23 crore in respect of transactions with Senghani Creators Private Limited, in the absence of supporting documents, should not be treated as unexplained. The AO recorded that the assessee filed its reply dated 04.03.2025. The contents of the reply are extracted in paragraph 7.3 of the assessment order. The assessee, in

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

its reply, stated that it had incurred subcontract expenses of Rs. 6.23 crore through Senghani Creators Private Limited. The AO's addition is based on the statements of third parties, namely, Kailash Patel and Sanjay Senghani. On perusal of the statement of Kailas Patel, wherein he allegedly stated about the preparation of final invoices on the basis of rough workings and paper bills, it cannot automatically be inferred that the transactions were fraudulent or bogus. Admission regarding preparation of final invoices based on rough workings and paper bills is not unusual. Further, the transactions of the Assessee with Senghani Creators Private Limited have not been doubted. The expenses were incurred through banking channels against the work executed. The work executed is supported by quality certificates, letters/compliance certificates, copies of bills, reconciliation statements, payment contracts, payment break-ups, measurement sheets, percentage of work done, ledger copies of the books of the assessee with Senghani Creators Private Limited, and payment certificates. The submission of the Assessee was not accepted by the AO. The AO held that Senghani Creators Private Limited (Senghani) was also covered during the search action on the Runwal Group. Senghani Creators Private Limited is engaged in the business of executing contracts for RCC work. Senghani has sublet its work to various sub-contractors. During the search action, various incriminating materials were found and seized. The statement of a key person of Senghani Creators Pvt. Ltd. revealed that the company has made bogus subcontracting transactions. The assessee was direct

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

beneficiary of such bogus subcontracting. The key person of Senghani Creators Pvt. Ltd. and the Runwal Group, during their statements, requested two weeks' time to submit the details of sub-contracting expenses, but failed to submit the required details. During the assessment proceedings, the assessee was allowed an opportunity to substantiate the genuineness of the transaction of Rs. 6.23 crore with Senghani Creators Pvt. Ltd. The onus is on the assessee to prove such expenses as genuine. The assessee has not offered any explanation regarding the fact that, during the course of the search action, blank letterheads and stamps of subcontractors were found. The assessing officer disallowed the expenses of Rs. 6.23 crore under Section 37. The AO reduced such expenses from the value of work-in-progress (WIP) and revised the WIP in the following manner. AY 2020-21 2021-22 2022-23 2023-24 To be reduced from WIP 27970103 6841930 13854040 10996206 To be disallowed from 0 15270033 12894691 51374236 profit and loss a/c Total 27970103 22111963 26748731 62370442 Accordingly in the A.Y. 2023-24 an amount of Rs. 5,13,74,236/- is added back to the total income of the assessee. 7.19 Accordingly the WIP for the A.Y. 2023-24 is reworked as under: Closing WIP as at 31.03.2023 (as per assessee’s 443,41,18,969 computation Less: Disallowance as above 1,09,96,206 Less: Disallowance as in A.Y. 2022-23 1,38,54,040 Less: Disallowance as in the AY 2021-22 68,41,930 Less: Disallowance made in the A.Y. 2020-21 2,79,70,103 Closing WIP carried forward to 01.04.2023 8. The Assessing Officer also found that the assessee had incurred certain cash expenses for licensing purposes and other works aggregating to Rs. 81,38,620/-. The assessee was asked to explain how such expenses were

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

reflected in the books of account and to substantiate the allowability of such expenses. The AO recorded that, despite repeated show-cause notices, the assessee remained non-responsive on this issue. Accordingly, a final show-cause notice dated 15.02.2025 was issued. The assessee filed its reply dated 13.03.2025. The contents of such reply are recorded in para 8.2 of the assessment order. In the reply, the assessee stated that the allegation regarding cash expenses was based on a diary maintained by Lucy Ray Choudhary. The assessee has no knowledge about the said diary. The entries in the blue-coloured diary seized from her cabin and in her own diary were insufficient to prove the payment of cash expenses. There was no independent corroborative evidence to support such entries. The entries in the diary were vague and open to interpretation. In without prejudice submissions, the assessee submitted that huge additions on account of own-money receipts amounting to Rs. 4.32 crore have been proposed. If such addition is made, then the alleged unaccounted cash payment or source of income had already been taxed as unexplained cash credit. To support such submission, the assessee relied upon the decision of the Hon'ble Bombay High Court in CIT v. Jawanmal Gemaji Gandhi, (1985) 151 ITR 353 (Bom), wherein it was held that if there is an addition in respect of undisclosed income or unexplained cash credit and there are certain unexplained investments, it can be pleaded by the assessee that the unexplained investment was sourced out of income already taxed as unexplained cash credit. The assessee also relied upon the decision of the Hon'ble Bombay High Court in CIT v. Golani Brothers,

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

85 taxman.com 355 (Mumbai), wherein on identical facts it was held that once own-money receipts were considered as revenue receipts and addition to income was made, any expenditure out of such money could not be treated as unexplained expenditure, as otherwise it would amount to double addition. The reply of the assessee was not accepted by the AO. The AO by referring to various page numbers of the diary wherein the alleged expenses were recorded, aggregated such expenses at Rs. 8138,620/-. The AO recorded that during the assessment proceedings, the assessee was allowed opportunity to offer an explanation regarding the cash expenditure, but the assessee failed to do so. Since no explanation was offered to the satisfaction of the Assessing Officer, as required under the provisions of Section 69C, the AO held that the source of the cash expenses was not explained and added the same under Section 69C. 9. Aggrieved by the additions made in the assessment order, the assessee filed an appeal before the Income Tax Appellate Tribunal (Tribunal). Simultaneously, the assessee also filed appeals for AYs 2018-19 to 2022- 23 and 2024-25. Before the ld. CIT(A), the assessee filed detailed written submissions. The submissions of the assessee with regard to the addition of Rs. 4.23 crore, as recorded in pages 27 to 43 of the order of the learned CIT(A). In sum and substance, the assessee reiterated the stand taken before the AO and also relied upon a number of decisions on the issue of on-money receipts and taxation thereof. The learned CIT(A), in para 6, from pages 43 to 58, summarized the submissions of the assessee. In para 7 of his order, the learned CIT(A) recorded his findings.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

The learned CIT(A), by relying upon various decisions of the High Courts and various Benches of Tribunal, held that he found merit in the without- prejudice submission that an amount received as on money should not be treated as the assessee's income in its entirety and that only the profit embedded in such on-money component ought to be brought to tax, rather than taxing the entire unaccounted receipt as income. The learned CIT(A) summarized the on-money receipts from AY 2022-23 to AY 2024- 25 and noted that the AO had made an addition of 100% of such receipts. Thus, the assessee sought to restrict such addition to a reasonable percentage of such receipts and not the entire receipt. The learned CIT(A) relied on the decision of the Gujarat High Court in CIT v. President Industries, 258 ITR 654 (Gujarat), and the Bombay High Court in CIT v. Hariram Bhambani (supra). The learned CIT(A) also relied on the decision of the Ahmadabad Tribunal in Abhishek Corporation v. DCIT, 66 TTJ (Ahmadabad) 651, wherein it was specifically held that, even though it is established from the seized document that the assessee was receiving premium, i.e. ‘on money’, on bookings of flats belonging to third parties, the receipts of on money, cannot be treated as undisclosed income of the assessee. Only the net profit rate can be applied on unaccounted sales/receipts for making the addition. The learned CIT(A) considered 15.00% of entire alleged ‘on-money’ as a reasonable net profit margin on such receipts. Thereby, the learned CIT(A) restricted the addition on account of on money to 15.00% and allowed partial relief.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

addition to 5.00% percent of such amount, and similarly, downward adjustment in WIP was also directed to be revised proportionately. 11. On the addition of unaccounted expenses, the learned CIT(A) held that the suspicious transaction has to be assessed on the basis of material available on record and the surrounding circumstances, keeping in view human conduct and the preponderance of human probabilities. The learned CIT(A) noted that the assessee has made an alternative, without prejudice, submission that, in case the assessee succeeded in respect of on money or cash receipts already offered to tax under unexplained credit, the addition of unexplained expenses would amount to double taxation of the same amount, as it was an unexplained receipt and again an unexplained expenditure. Therefore, the learned CIT(A) was of the view that once he has confirmed the addition to the extent of 15% of on money, no separate addition was to be made, thereby deleted the entire addition. The learned CIT(A) thus allowed partial relief on account of on money addition as well as disallowance of sub-contracting expenses and consequential reduction of WIP, and deleted the entire unexplained expenditure. 12. Further aggrieved, both parties have filed their respective appeals. The assessee has challenged the action of the learned CIT(A) in restricting the disallowance of subcontracting expenses to the extent of 5.00% and the addition on account of on money to 15.00%. On the contrary, the Revenue has challenged the deletion of the entire unaccounted expenditure, restricting the disallowance of subcontracting expenses to

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

the extent of 5.00% and consequential adjustment to WIP, as well as restricting the addition on account of ‘on money’ to 15.00 %. The specific grounds of appeal raised by both the parties have been recorded above. 13. We have heard the submissions of the learned Authorized Representative (ld AR) of the assessee and the learned Commissioner of Income Tax – Departmental Representative (ld. CIT-DR) for the Revenue. At the outset of the hearing, the learned AR of the assessee submits that the grounds raised by the assessee as well as the Revenue are squarely covered by the decision of the Tribunal in the assessee's group case in DCIT Vs Horizon Projects Private Limited in ITA No. 7786 to 7788/Mum/2025 (AY: 2022-23 to 2024-25) and ITA No. 7876 to 7879/Mum/2025 (AY: 2021-22 to 2024- 25). The learned AR of the assessee submitted that the addition in the case of Horizon Projects Private Limited is based on the same search action and on similar alleged incriminating evidence and statements of persons, wherein the addition / disallowances on account of on money was restricted to 8.00% in place of 15.00%. Similarly, the disallowance of sub-contracting expenditure and unexplained expenditure were deleted. The disallowance in Horizon Projects Private Limited was based on a similar allegation that Senghani Creators Private Limited had sublet certain parts of the work to third parties. The coordinate Bench deleted the entire disallowances of sub-contracting expenses. Thus, the grounds raised by the assessee as well as the Revenue are completely covered by the assessee's group case. The learned AR of the assessee carried us through various paragraphs of the decision in Horizon Projects Private Limited

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

(supra) and various findings of the AO as well as the learned CIT(A) in the set of appeals before us. 14. On the other hand, the learned CIT(A) for the revenue fully supported the order of the AO on all the grounds of appeal raised by the assessee as well as by the Revenue. The learned CIT(A) submits that the additions made by the AO were based on various material and incriminating evidence found during the course of search proceedings and on the basis of search investigation. The Revenue may file an appeal against the decision of the Tribunal in the assessee’s group case, namely, Horizon Projects Private Limited. Therefore, the said decision may not be followed. 15. We have considered the rival submissions of both the parties and have gone through the orders of both the authorities carefully. Ground No. 1 &2 in assesses appeal and Ground No.(s). 1 relates to additions of on-money and Ground No. 3 to 9 in the Revenue’s appeal in deleting unexplained expenditure. All these grounds of appeal are interconnected. The AO made addition of 100% of alleged on money, which was restricted to 15% by ld CIT(A). The AO further made addition of unexplained expenditure of Rs. 81,38,620/-. The basis of addition and estimated addition of on money and deletion of unexplained expenditure has been discussed by us in detail in the preceding paragraphs. We find that on a similar factual situation in the assessee’s group case, Horizon Projects Private Limited, the coordinate Bench of this Tribunal, in its order dated 20.04.2026, has passed the following order:

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

“16. We have heard the rival submissions and perused the material placed on record. The concept of “on-money” in the real estate sector is not unknown to tax jurisprudence. It generally refers to an unaccounted component of sale consideration received in cash over and above the recorded agreement value. Such matters ordinarily surface during search and survey actions through diaries, loose sheets, parallel records, digital chats and statements of persons managing the affairs of the builder or project. But even where the existence of such receipts is inferred or established, an equally important question arises as to what, in law, is taxable: whether the entire receipt or only the income element embedded therein. That issue is no longer res Integra. The consistent thread running through judicial pronouncements is that such on-money represents unaccounted business receipts or suppressed sale consideration and not income per se in its entirety. Embedded in such receipts is a margin, and against such receipts there may stand corresponding unaccounted business outgoings. Therefore, unless the case is such where the whole receipt can be demonstrably shown to be pure income without any outgoing component, the normal rule is that only the profit element should be brought to tax on some rational and reasonable basis. 17. We may first advert to the reasoning extracted in the order itself from the decision of the Ahmadabad Bench in JCIT v. Narayan Land Estate, wherein the Tribunal lucidly explained that when seized or impounded documents disclose not merely receipt of on-money but also indicate the reality of unaccounted project-related expenditure, then a holistic approach is warranted, and the gross on-money cannot be taxed in entirety. The Tribunal further recognised, taking judicial notice of ground realities of the real estate sector, that cash is often collected and cash is also deployed for various approval-related and project-related purposes. Therefore, a reasonable profit estimate on such receipts, rather than taxation of the gross amount, is what accords with both commercial realism and tax jurisprudence. The relevant observation, as noted in the draft, is reproduced hereunder: “8.5 The decisions of the jurisdictional ITAT and High Court are binding on the Commissioner (Appeals). However, the appellant in its submission has not given the working of profit on such on-money and has not given the justification as to how the profit of 15% (as mentioned in the submission during the appeal

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

proceedings) is adequate and fair. No doubt, one approach is that where the seized/impounded document bear the testimony of on-money being charged and collected and the same pages or similar group pages also contain entries related to unaccounted expenses on in relation to the projects undertaken and in such a case, such expenses are to be necessary allowed for the holistic interpretation of the documents seized/impounded. The other approach is to take cognizance of the market/realty sector that while it is the practice of the real estate market that whereas cash (over and above the consideration in cheque) are collected from the customers, the developers have to incur various unaccounted expenses also in relation to procurement of land and approval of the projects by various authorities & etc and therefore, there is rational/ justification in charging/bringing to tax only an estimated profit on on- money/premium amount collected from the customers instead of adding the gross amount of on-money/premium to the total income.„ 18. The above principle is also fortified by the long line of authorities beginning with CIT v. President Industries (258 ITR 654) (Guj.), wherein it was held that the entire undisclosed sale proceeds cannot be regarded as income. Similar principle has found favour in decisions of the Hon’ble Bombay High Court and various benches of the Tribunal in the context of real estate transactions. In Guruprerna Enterprises, following the ratio of Abhishek Corporation v. DCIT, it was held that even where seized documents establish receipt of on-money or premium, the entire receipts cannot be assessed as undisclosed income; only net profit rate can be applied on the unaccounted receipts. The legal position that thus emerges is that on-money receipts are in the nature of suppressed business receipts or sale price, and what is chargeable to tax is only the profit component embedded therein and not the whole receipt as such. 18. The above principle is also fortified by the long line of authorities beginning with CIT v. President Industries (258 ITR 654) (Guj.), wherein it was held that the entire undisclosed sale proceeds cannot be regarded as income. Similar principle has found favour in decisions of the Hon’ble Bombay High Court and various benches of the Tribunal in the context of real estate transactions. In Guruprerna Enterprises, following the ratio of Abhishek Corporation v. DCIT, it was held that even where seized documents establish receipt of on-money or premium, the entire receipts cannot be assessed as undisclosed income; only net profit rate can be applied on the unaccounted receipts. The legal position that thus emerges is that on-money receipts are in the nature of suppressed business receipts or sale price, and what is chargeable to tax is only the profit component embedded therein and not the whole receipt as such. 19. Equally instructive is the decision in ITO v. Anand Builders, where the Tribunal held that only 8% of the unaccounted on-money receipts could be brought to tax, and not the entire gross receipts, for the reason that against such unaccounted receipts there would ordinarily be corresponding

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

unaccounted payments and only the residual income that remains in the hands of the assessee can be taxed. The said view, as noted in the draft order, ultimately found affirmation when the challenge by the department did not succeed. Likewise, in Hema Haresh Mehta v. DCIT, Mumbai Tribunal held that a reasonable profit embedded in total unaccounted gross receipts deserves to be brought to tax and 8% was considered an appropriate estimate in the facts of that case, with the clear observation that once profit is estimated, all associated expenditure stands deemed to have been allowed. 20. Reference may also be made to Kishor Mohanlal Telwala, where the Tribunal regarded 8% as a fair and reasonable figure by drawing guidance from section 44AD, albeit not directly applying the provision. True it is, the present assessee’s turnover may be far beyond the threshold of presumptive taxation and section 44AD may not directly apply. Yet, such statutory benchmarks can often provide a broad indicator for arriving at a fair estimate where direct quantification is impossible and only an approximation on rational basis is called for. What is important is that estimation must rest neither on conjecture nor on punitive instinct, but on a fair appreciation of the nature of trade, scale of activity, and margins ordinarily available. 21. Tested on the aforesaid principles, we are unable to persuade ourselves to accept the Revenue’s contention that the entire gross on-money receipts deserve to be taxed as income. That approach ignores the basic distinction between receipt and income. At the same time, we are also not inclined to accept the assessee’s plea for complete deletion, because the seized material and statements, as concurrently appreciated by the authorities below, do point towards existence of unaccounted receipts in some transactions, and the learned CIT(A) was justified in not effacing the addition in toto. The only real question then is the appropriate rate at which the income embedded in such receipts should be estimated. On an overall consideration of the nature of the assessee’s business, the location and character of the project, the judicial precedents placed before us, and the broad commercial realities of the real estate sector, we are of the considered view that estimation at 15% as sustained by the learned CIT(A) is on the higher side and does not appear to rest on any specific comparative or empirical basis. A more reasonable estimate, in our view, would be 8% of the alleged on-money receipts. We

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

accordingly direct that the additions on account of on-money receipts in respect of sale of flats and shops be restricted to 8% of the amounts considered by the Assessing Officer. 22. Once we hold that only the profit element at 8% is liable to be taxed on the alleged on-money receipts, the Revenue’s grievance against the telescoping / set-off allowed by the learned CIT(A) in respect of alleged unaccounted cash expenditure loses much of its force. In matters of this nature, where both the alleged receipts and alleged expenditure form part of the same undisclosed business circuit, separate taxation of gross receipts and again of the corresponding cash outgoings would indeed result in duplication, unless the department is able to establish that the expenditure arose from an altogether independent source. No such separate source has been demonstrated before us. On the contrary, the very case of the department is that the assessee was generating cash through on-money and utilising the same in project-linked unaccounted dealings. In such a factual setting, telescoping is not a concession but a necessary corollary of coherent taxation. Therefore, we see no infirmity in the principle adopted by the learned CIT(A) in allowing adjustment of such expenditure against the on- money stream. Once profit on the gross receipts is estimated, separate addition of the corresponding expenditure cannot ordinarily survive. 23. Consequently, the grounds raised by the assessee challenging sustenance of 15% addition on alleged on-money receipts are partly allowed to the extent indicated above, and the corresponding grounds of the Revenue seeking full taxation of such receipts are dismissed. We hold that the additions on account of alleged on-money receipts in A.Y. 2024-25 shall stand restricted to 8% of the respective amounts considered by the Assessing Officer, and no separate addition on account of alleged unexplained cash expenditure shall survive beyond what is embedded in such estimated profit.” 16. In view of the aforesaid decision on a similar set of facts and similar submissions in the assessee’s group case, and respectfully following the same, Ground No. 1` and 2 of the assessee’s appeal are partly allowed, and Ground No. 1, 4, 5, 6 & 8 in the Revenue’s appeal are dismissed.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

of documentary evidences to substantiate the genuineness of the work executed and the payments made. These include quality certificates, health and safety compliance certificates, labour compliance certificates, abstract sheets certifying quantity and amount, copies of bills and invoices, work orders, challans, reconciliation statements of materials issued to the contractor, quantity summary sheets, payment breakup sheets, measurement sheets showing percentage of work done, ledger accounts of Senghani Creators Pvt. Ltd. in the assessee’s books, copies of bank statements reflecting the payments, and payment certificates. These are not stray or superficial documents. They are documents that ordinarily accompany the execution and accounting of real estate construction contracts. Once such documentation is placed on record, the initial burden lying on the assessee stands sufficiently discharged. The burden thereafter shifts to the department to demonstrate, by some cogent material, that these documents are either fabricated, inflated, fictitious, or otherwise do not represent genuine business transactions. That crucial link is conspicuously absent in the present case. 33. The Assessing Officer has not pointed out any specific discrepancy in the invoices, any mismatch in the quantities certified, any falsity in the work orders, any inconsistency in the measurement books, any inflation discernible from the payment records, or any evidence to show that the amounts paid through banking channels had returned to the assessee in cash or by any circuitous means. There is equally no finding that the work said to have been executed was in fact not executed, or that the project progress, civil work and construction activities did not correspond with the expenditure capitalised by the assessee. The entire edifice of the addition rests on generalized findings in the case of Senghani Creators Pvt. Ltd. and on the assumption that because some of its alleged sub-contractors were found to be non-existent, therefore every transaction routed through it must

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

necessarily be bogus. Such a broad-brush approach, in our considered view, cannot be sustained in tax adjudication where each addition must rest on a clear factual foundation and a legally tenable inference. 34. The learned CIT(A), while partly accepting the assessee’s case, nevertheless chose to sustain a disallowance of 5% by observing that certain irregularities in the affairs of Senghani Creators Pvt. Ltd. could not be ignored altogether and by placing reliance on a decision of the Mumbai Tribunal in the case of Middle Earth Enterprises. However, as rightly pointed out before us, the learned CIT(A) has not undertaken any meaningful comparison of the facts of the present case with the facts of the case relied upon. He has not demonstrated as to how the nature of evidence, the degree of infirmity, the type of contract, the supporting documentation, or the surrounding circumstances were so similar as to justify an ad hoc estimate on parity. More importantly, even as per his own narration, the decision referred to by him had sustained a different percentage. Therefore, the adoption of 5% in the present case appears to be more of an approximation in terrorem than an estimate founded upon any discernible factual or legal yardstick. A quasi-judicial estimate cannot be a matter of impressionistic compromise; it must proceed from some rational basis emerging from the record. 35. We are also persuaded by the submission advanced on behalf of the assessee that the presumption available under section 132(4A), or the corresponding principle underlying search presumptions, is essentially confined to the person from whose possession or control the books, documents or assets are found. Such a presumption cannot, without more, be extended against a third party assessee whose own records are otherwise maintained in the regular course and whose claim is supported by primary evidentiary material. Here, no incriminating document was found from the possession of the assessee to show that the payments made to Senghani Creators Pvt. Ltd. were accommodation entries or fictitious charges. In such circumstances, the attempt to draw an automatic adverse inference against the assessee on the strength of third-party search material alone is clearly misplaced, unless supported by some additional corroborative evidence directly connecting the assessee with the alleged bogus arrangement. No such direct evidence has been shown to us.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

the Revenue to proceed against the erring contractor or the actual beneficiaries of such irregularities, but it does not permit disallowance in the hands of a bona fide contracting party unless its own claim is shown to be false or non-genuine. 39. Accordingly, we set aside the order of the learned CIT(A) on this issue and direct the Assessing Officer to delete the entire disallowance made in respect of sub-contracting expenditure booked through M/s Senghani Creators Pvt. Ltd. Consequently, Ground Nos. 7 and 8 raised by the assessee for Assessment Year 2024-25 are allowed, and Ground No. 3 raised by the Revenue stands dismissed. 18. Considering the aforesaid consistent view taken by the coordinate Bench of this Tribunal on a similar set of facts, and respectfully following the same by maintaining the principle of consistency, Ground Nos. 3 and 4 of the assessee’s appeal are allowed. Consequently, Ground No. 2 in the Revenue’s appeal is dismissed. 19. In the result, the appeal of the assessee for AY 2023-24 is partly allowed and the appeal of the Revenue is dismissed. ITA No. 8033/Mum/2025 (AY: 2018-19) by assessee. 20. The assessee has raised following grounds of appeal “1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in reopening the assessment proceeding u/s.147 of the Income Tax Act, 1961, without considering the fact and circumstances of the case. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Learned Assessing Officer erred in making additions in the hands of the appellant without any tangible material / information / incriminating evidence found during the course of search, without considering the facts & circumstances of the case and position in law. 3. On the facts and circumstances of the case as well as Rs. 10,98,208/- in law, the Learned CIT(A) has erred in reducing the amount to the extent of Rs.31,73,277/- (Being 5% of 6,34,65,531/-) from WIP of the appellant by treating genuine sub-contracting expenses incurred on Senghani Creators Pvt Ltd as alleged bogus expenses, without considering the facts and circumstances of the case.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ld. AR of the assessee for all assessment years, therefore, ground no. 1 & 2 in assessee’s appeal are dismissed as not pressed. 23. Ground no. 3 & 4 in assessee’s appeal and ground no. 1 in Revenue’s appeal are interconnected, relates to restricting the disallowance of subcontracting expenses and subsequent adjustment to WIP. We find that these grounds of appeal are identical to the ground no. 6 in assessee’s appeal and ground no. 2 in Revenue’s appeal for A.Y. 2023-24. Considering the fact that in appeal for A.Y. 2023-24, we have allowed the corresponding ground of appeal and dismissed the grounds of appeal of Revenue, therefore, following the principle of consistency, ground of appeal no. 3 & 4 in assessee’s appeal is allowed and ground no. 1 in Revenue’s appeal is dismissed. 24. Ground no. 2 & 3 in Revenue’s appeal relates to disallowance under section 14A r.w.r. 8D and adjustment to book profit under section 115JB. 25. Facts relating to adjudication of these grounds of appeal are that during assessment, the assessing officer noted that assessee company has received / earned share of profit from partnership firm of Rs. 99,743/-, which is claimed as exempt. On perusal of computation of income, the AO found that assessee has not made any suo moto disallowance. The assessee was asked to furnish working of disallowance under section 14A. The assessee in its reply submitted once tax has been paid by the firm, therefore, no disallowance should be made in the hand of assessee. The reply of assessee was not accepted by AO, the assessing officer invoked the provision of Rule 8D and made disallowance under section 14A of Rs.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

1.74 crore. The AO made 1.00% disallowance of annual average of monthly average of total investment by assessee. On appeal before ld. CIT(A), the assessee filed detailed written submission as recorded in para 22.3 of order of ld. CIT(A). Besides the various factual submission, the assessee also stated that disallowance should be restricted to the extent of exempt income and relied on various decision of different High Courts including the decision of Jurisdictional High Court in Nirved Traders (P) Ltd. ITA No. 149 of 2017 dated 23.04.2019. The ld. CIT(A) restricted the disallowance to the extent of exempt income. On the adjustment of disallowance to book profit, the ld. CIT(A) held that disallowance under section 14A cannot be added while computing book profit under section 115JB as has been held by Special Bench of Delhi Tribunal in Vireet Investment (P) Ltd., (ITA No. 502/Del/2012 & C.O. No. 68/Del/2014) Bombay High Court in CIT vs Bengal Finance & Investment Pvt. Ltd. (Tax Appeal No. 337 of 2013.)Aggrieved by the order of ld. CIT(A), the Revenue has filed present appeal. 26. The ld. CIT-DR for the Revenue supported the order of AO and would submit that AO invoked the provision of Rule 8D and rightly computed the disallowance as per formula prescribed in Rule 8D. 27. On the other hand, the ld. AR of the assessee submits that it is settled law that disallowance under section 14A should not exceed the exempt income. The ld. CIT(A) has followed the binding precedent by allowing part relief to the assessee.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

the order of ld. CIT(A). Thus, considering the principle of consistency, ground no. 4 & 5 in appeal for A.Y. 2019-20 is also dismissed. 35. In the result, appeal of assessee is allowed and appeal of Revenue is dismissed. ITA No. 8035/Mum/2025 (AY: 2020-21) by assessee 36. The assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Learned Assessing Officer erred in reopening the case u/s. 147 of the Income Tax Act, 1961, without considering the facts and circumstances of the case. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Learned Assessing Officer erred in making additions in the hands of the appellant without any tangible material / information / incriminating evidence found during the course of search, without considering the facts & circumstances of the case and position in law. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the addition made by the Learned Assessing Officer to the extent of Rs.58,12,500/- (le. being 15 percent of Rs.3,87,50,000/- as profit earned on alleged on money received on sale of flat, without considering the facts and circumstances of the case. 4. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in not appreciating the fact that the appellant has not taken on money on sale of flats and simply made the addition by relying on blue colour diary seized from cabin of Smt. Luсу Roychoudhary without any independent corroborating evidence to support these entries. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in reducing the amount to the extent of Rs.13,98,505/ (Being 5% of 2,79,70,103/-) from WIP of the appellant by treating genuine sub-contracting expenses Incurred on Senghani Creators Pvt Ltd as alleged bogus expenses, without considering the facts and circumstances of the case. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Learned Assessing Officer erred in making additions on the basis of uncorroborated statements which were later retracted, without considering the facts& circumstances of the case and position of law. 7. The appellant craves leave to add, amend, alter or delete the said ground of appeal.”

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

appeal and ground no. 2 in Revenue’s appeal for A.Y. 2023-24. Considering the fact that in appeal for A.Y. 2023-24, we have allowed the corresponding ground of appeal and dismissed the grounds of appeal of Revenue, therefore, following the principle of consistency, ground of appeal no. 5 in assessee’s appeal is allowed and ground no. 3 in Revenue’s appeal is dismissed. 40. Ground no. 3 & 4 in assessee’s appeal and ground no. 1 in Revenue’s appeal relates to disallowance of on-money. We find that these grounds of appeal are similar to ground no. 6 raised by assessee in A.Y. 2023-24 and ground no. 7 to 9 of appeal by Revenue for A.Y. 2023-24, wherein we have allowed part relief to the assessee and dismissed the corresponding ground of appeal by Revenue in appeal for A.Y. 2023-24. Thus, following the principle of consistency, the grounds of appeal no. 3 & 4 by assessee are partly allowed and ground no. 1 by Revenue is dismissed. 41. Ground no. 2 in appeal for Revenue is similar to ground no. 2 in appeal for A.Y. 2018-19 raised by Revenue. We find that ld. CIT(A) while allowing relief to the assessee followed his order in A.Y. 2018-19. We find that during the year under consideration, the assessee has shown exempt income of Rs. 2,88,178/-. Thus, following the order of earlier years, the AO is directed to restrict the disallowance to the extent of exempt income as has been directed by ld. CIT(A). In the result, this ground of appeal is dismissed. 42. In the result, the appeal of assessee is partly allowed and appeal of Revenue is dismissed.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA No. 8036/Mum/2025 (AY: 2021-22) by assessee 43. The assessee in appeal for AY 2021-22 has raised following grounds of appeal: “1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Leamed Assessing Officer erred in reopening the case u/s. 147 of the Income Tax Act, 1961, without considering the facts and circumstances of the case. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Learned Assessing Officer erred in making additions in the hands of the appellant without any tangible material / information / incriminating evidence found during the course of search, without considering the facts a circumstances of the case and position in law. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the addition made by the Learned Assessing Officer to the extent of Rs.20,15,400/-(i.e. being 15 percent of Rs.1,34,36,000/- as profit earned on alleged on money received on sale of flat, without considering the facts and circumstances of the case. 4. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in not appreciating the fact that the appellant has not taken on money on sale of flats and simply made the addition by relying on blue colour diary seized from cabin of Smt. Lucy Roy choudhary without any independent corroborating evidence to support these entries. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.7,63,502/- (being 5% of Rs.1,52,70,033/-) u/s.37 of the Income Tax Act, 1961 by treating genuine sub-contracting expenses incurred on Senghani Creators Pvt Ltd as alleged bogus expenses, without considering the facts and circumstances of the case. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in reducing the amount to the extent of Rs.17,40,602/ (Being 5% of 3,48,12,033/-) from WIP of the appellant by treating genuine sub-contracting expenses incurred on Senghani Creators Pvt Ltd as alleged bogus expenses, without considering the facts and circumstances of the case. 7. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Learned Assessing Officer erred in Making additions on the basis of uncorroborated statements which were later retracted, without considering the facts & circumstances of the case and position of law. 8. The appellant craves leave to add, amend, alter or delete the said ground of appeal.”

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

from on-money, it was incurred in cash (as on-money is cash receipt) and section 40A(3) of the income tax Act, 1961 get clearly attracted in case of cash expenditure? 7. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing benefit of 85% of notional expenditure (out of total on-money received) by relying on the findings of Ekta Housing Pvt. Ltd. (ITA No. 1732/Mum/2019 AY 2013-14) even when fact of Ekta Housing Pvt. Ltd are different as cash expenditure as found in that case and assessee had clearly established one to one linkage between on-money received and cash expenditure, which is not in the instant case? 8. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) is justified in allowing telescoping and granting deduction of national expenditure at 85% of the on-money receipts, despite the fact that only cash expenditure of Rs. 1,50,000/ was found during the course of search and separately added under section 690, and therefore deduction ought to have been restricted solely to the said cash expenditure of Rs. 1,50,000/-? 9. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) is justified in allowing notional expenditure of 85% of the on-money after acknowledging systematic collection of on-money on sale of flats and commercial units, without correspondingly bringing to tax the notional on- money relating to the remaining flats and commercial units sold during the year under consideration, when the principle of consistency and balance in the reasoning required that notional income also be taken into account? 10. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in giving benefit of telescoping effect of Rs. 1,50,000/- of cash expenditure from the "on-money" received, in the circumstances, when CIT(A) was already given benefit of 85% of notional expenditure and thus, allowing further benefit of Rs. 1,50,000/- will reduce the taxable profit to much lower than 15% of "on-money received" and thus, contradicts the finding of CIT(A) itself?

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

these grounds of appeal are identical to the ground no. 5 & 6 in assessee’s appeal and ground no. 4 in Revenue’s appeal for A.Y. 2023-24. Considering the fact that in appeal for A.Y. 2023-24, we have allowed the corresponding ground of appeal and dismissed the grounds of appeal of Revenue, therefore, following the principle of consistency, ground of appeal no. 5 & 6 in assessee’s appeal is allowed and ground no. 4 in Revenue’s appeal is dismissed. 47. Ground no. 3 & 4 in assessee’s appeal and ground no. 3 in Revenue’s appeal relate to disallowance of on-money. We find that these grounds of appeal are similar to ground no. 6 raised by assessee in A.Y. 2023-24 and ground no. 7 to 9 of appeal by Revenue for A.Y. 2023-24, wherein we have allowed part relief to the assessee and dismissed the corresponding ground of appeal by Revenue in appeal for A.Y. 2023-24. Thus, following the principle of consistency, the grounds of appeal no. 3 & 4 by assessee are partly allowed and ground no. 1 by Revenue is dismissed. 48. Ground no. 2 in appeal for Revenue which relates to disallowance under section 14A and is similar to ground no. 2 in appeal for A.Y. 2018-19 raised by Revenue. We find that ld. CIT(A) while allowing relief to the assessee followed his order in A.Y. 2018-19. We find that during the year under consideration, the assessee has shown exempt income of Rs. 1,02,199/-. Thus, following the order of earlier years, the AO is directed to restrict the disallowance to the extent of exempt income as has been directed by ld. CIT(A). In the result, this ground of appeal is dismissed.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

simply made the addition by relying on blue colour diary seized from cabin of Smt. Lucy Roychoudhary without any independent corroborating evidence to support these entries. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.6,44,735/- (being 5% of Rs.1,28,94,691/-) u/s.37 of the Income Tax Act. 1961 by treating genuine sub-contracting expenses incurred on Senghani Creators Pvt Ltd as alleged bogus expenses, without considering the facts and circumstances of the case. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in reducing the amount to the extent of Rs.24,33,304/- (Being 5% of 4,86,66,073/-) from WIP of the appellant by treating genuine sub-contracting expenses incurred on Senghani Creators Pvt Ltd as alleged bogus expenses, without considering the facts and circumstances of the case. 7. On the facts and circumstances of the case as well as in law, the Learned CIT(A) and the Learned Assessing Officer erred in making additions on the basis of uncorroborated statements which were later retracted, without considering the facts & circumstances of the case and position of law. 8. The appellant craves leave to add, amend, alter or delete the said ground of appeal.”

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

of 'on-money' receipts already taxed, ignoring that the on-money receipts and unaccounted expenditure represent two distinct heads of undisclosed income, and that the assessee failed to furnish any evidence to substantiate the nexus between the alleged on-money receipts and the cash expenditure, thereby rendering the telescopic benefit unsustainable in law?" 4. "On the facts and circumstances of the case and in law, whether the Ld. CIT(A) was justified in restricting the disallowance u/s 37 to 5% of the subcontracting expenses and also subsequent adjustment in Work-In- Progress, ignoring the fact that the Assessing Officer's findings were based not merely on third-party search material but also on corroborative seized documents, spot verifications, and patterns of non existent subcontractors which clearly established the sham nature of the expenditure, and further ignoring the settled position of law as laid down by the Hon'ble Supreme Court in CIT u. N.K. Proteins Ltd. [2017] 250 Taxman 22 (SC) that once a transaction is proved to be non-genuine, the entire amount is liable to be disallowed and not merely a portion thereof?" 5. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing benefit of 85% of notional expenditure (out of total on-money received) even when assessee could not provide any evidence that it had incurred 85% of expenditure against the on-money received? 6. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing benefit of 85% of notional expenditure (out of total on-money received) in the circumstance that if at all any expenditure is incurred from on-money, it was incurred in cash (as on-money is cash receipt) and section 40A(3) of the Income tax Act, 1961 get clearly attracted in case of cash expenditure? 7. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing benefit of 85% of notional expenditure (out of total on-money received) by relying on the findings of Ekla Housing Pvt. Ltd. (ΙTΑ Νο. 1732/Mum/2019 AY 2013-14) even when fact of Ekta Housing Pvt. Ltd are different as cash expenditure as found in that case and assessee had clearly established one to one linkage between on-money received and cash expenditure, which is not in the instant case? 8. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) is justified in allowing telescoping and granting deduction of notional expenditure at 85% of the on-money receipts, despite the fact that only cash expenditure of Rs. 28,26,313/ was found during the course of search and separately added under section 69C, and therefore deduction ought to have been restricted solely to the said cash expenditure of Rs. 28,26,313/-? 9. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) is justified in allowing notional expenditure of 85% of the on-money after acknowledging systematic collection of on-money on sale of flats and

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

commercial units, without correspondingly bringing to tax the notional on- money relating to the remaining flats and commercial units sold during the year under consideration, when the principle of consistency and balance in the reasoning required that notional income also be taken into account? 10. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in giving benefit of telescoping effect of Rs. 28,26,313/-of cash expenditure from the "on-money" received, in the circumstances, when CIT(A) was already given benefit of 85% of notional expenditure and thus, allowing further benefit of Rs. 28,26,313/- will reduce the taxable profit to much lower than 15% of "on-money received and thus, contradicts the finding of CIT(A) itself? 53. We find that ground no. 1 & 2 in assessee’s appeal is similar to the ground no. 1 & 2 in appeal for A.Y. 2018-19, which we have dismissed as not pressed. Similar submission was made by ld. AR of the assessee for all assessment years, therefore, ground no. 1 & 2 in assessee’s appeal are dismissed as not pressed. 54. Ground no. 5, 6 & 7 in assessee’s appeal and ground no. 4 in Revenue’s appeal are interconnected, relates to restricting the disallowance of subcontracting expenses and subsequent adjustment to WIP. We find that these grounds of appeal are identical to the ground no. 5, 6 & 7 in assessee’s appeal and ground no. 4 in Revenue’s appeal for A.Y. 2023-24. Considering the fact that in appeal for A.Y. 2023-24, we have allowed the corresponding ground of appeal and dismissed the grounds of appeal of Revenue, therefore, following the principle of consistency, ground of appeal no. 5, 6 & 7 in assessee’s appeal is allowed and ground no. 4 in Revenue’s appeal is dismissed. 55. Ground no. 3 & 4 in assessee’s appeal and ground no. 4 in Revenue’s appeal relates to addition / disallowance of on-money. We find that these grounds of appeal are similar to ground no. 6 raised by assessee in A.Y.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

2023-24 and ground no. 7 to 9 of appeal by Revenue for A.Y. 2023-24, wherein we have allowed part relief to the assessee and dismissed the corresponding ground of appeal by Revenue in appeal for A.Y. 2023-24. Thus, following the principle of consistency, the grounds of appeal no. 3 & 4 by assessee are partly allowed and ground no. 4 by Revenue is dismissed. 56. Ground no. 2 in appeal for Revenue which relates to disallowance under section 14A and is similar to ground no. 2 in appeal for A.Y. 2018-19 raised by Revenue. We find that ld. CIT(A) while allowing relief to the assessee followed his order in A.Y. 2018-19. We find that during the year under consideration, the assessee has shown exempt income of Rs. 5,094/-. Thus, following the order of earlier years, the AO is directed to restrict the disallowance to the extent of exempt income as has been directed by ld. CIT(A). In the result, this ground of appeal is dismissed. 57. Ground no. 8 & 10 in Revenue’s appeal relates to telescoping benefit of on- money. We find that while deciding appeal for A.Y. 2023-24, we have confirmed the order of ld. CIT(A) on similar issue by upholding his view that when there is allegation receipt of on-money, the unexplained expenditure is a part of alleged on-money, therefore, no separate addition on such alleged unexplained expenditure is justified. Thus, we do not find any merit in the corresponding ground of appeal raised by Revenue. In the result, these grounds of appeal as well as other ground of appeal being ground no. 1, 5, 6, 7 & 9 raised by Revenue have no merit. In the result, all these grounds of appeal are dismissed.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

1"On the facts and circumstances of the case and in law, whether the Ld. CIT(A) was justified in restricting the addition u/s 28 of the Income Tax Act,

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

to 15% of the on-money receipts, ignoring the fact that once the existence of on-money transactions is established through corroborative evidences such as digital records, seized diary, and statements recorded u/s 132(4), the entire amount of on-money represents income from undisclosed sources and not merely the profit element thereon?" 2. "On the facts and circumstances of the case and in law, whether the Ld. CIT(A) was justified in restricting the disallowance u/s 37 to 5% of the subcontracting expenses and also subsequent adjustment in Work- InProgress, ignoring the fact that the Assessing Officer's findings were based not merely on third-party search material but also on corroborative seized documents, spot verifications, and patterns of non-existent subcontractors which clearly established the sham nature of the expenditure, and further ignoring the settled position of law as laid down by the Hon'ble Supremе Court in CIT v. N.K. Proteins Ltd. [2017] 250 Taxman 22 (SC) that once a transaction is proved to be non-genuine, the entire amount is liable to be disallowed and not merely a portion thereof?" 3. "On the facts and circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the substantive addition made u/s 69C of the I.T. Act, 1961 by holding that the unaccounted expenditure was met out of 'on-money' receipts already taxed, ignoring that the on-money receipts and unaccounted expenditure represent two distinct heads of undisclosed income, and that the assessee failed to furnish any evidence to substantiate the nexus between the alleged on-money receipts and the cash expenditure, thereby rendering the telescopic benefit unsustainable in law?" 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing benefit of 85% of notional expenditure (out of total on-money received) even when assessee could not provide any evidence that it had incurred 85% of expenditure against the on-money received? 5. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing benefit of 85% of notional expenditure (out of total on-money received) in the circumstance that if at all any expenditure is incurred from on-money, it was incurred in cash (as on-money is cash receipt) and section 40A(3) of the Income tax Act, 1961 get clearly attracted in case of cash expenditure? 6. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in allowing benefit of 85% of notional expenditure (out of total on-money received) by relying on the findings of Ekta Housing Put. Ltd. (ITA No. 1732/Mum/2019 AY 2013-14) even when fact of Ekta Housing Pvt. Ltd are different as cash expenditure as found in that case and assessee had clearly established one to one linkage between on-money received and cash expenditure, which is not in the instant case? 7. Whether on the facts and circumstances of the case & in law, the Ld. CIT(А) is justified in allowing. telescoping and granting deduction of notional expenditure at 85% of the on-money receipts, despite the fact that only

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

cush expenditure of Rs. 62,78,500/- and 65,00,000/- were found during the course of search and separately added under section 69C, and therefore deduction ought to have been restricted solely to the said cash expenditure of Rs. 62,78,500/- and 65,00,000/-? 8. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) is justified in allowing notional expenditure of 85% of the on-money after acknowledging systematic collection of on-money on sale of flats and commercial units, without correspondingly bringing to tax the notional on- money relating to the remaining flats and commercial units sold during the year under consideration, when the principle of consistency and balance in the reasoning required that notional income also be taken into account? 9. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in giving benefit of telescoping effect of Rs. 28,26,313/-of cash expenditure from the "on-money" received, in the circumstances, when CIT(A) was already given benefit of 85% of notional expenditure and thus, allowing further benefit of Rs. 62,78,500/- and 65,00,000/- will reduce the taxable profit to much lower than 15% of "on-money received and thus, contradicts the finding of CIT(A) itself? 61. We find that assessee has raised additional ground of appeal by raising plea that AO erred in taxing on-money in the year of receipt without considering method of accounting following by Assessee Company. We find that at the time of argument no submission was made on such additional ground of appeal, therefore, such additional ground of appeal is dismissed as not pressed. 62. Ground no. 3, 4 & 5 in assessee’s appeal and ground no. 2 in Revenue’s appeal are interconnected, relates to restricting the disallowance of subcontracting expenses and subsequent adjustment to WIP. We find that these grounds of appeal are identical to the ground no. 5, 6 & 7 in assessee’s appeal and ground no. 4 in Revenue’s appeal for A.Y. 2023-24. Considering the fact that in appeal for A.Y. 2023-24, we have allowed the corresponding ground of appeal and dismissed the grounds of appeal of Revenue, therefore, following the principle of consistency, ground of

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

appeal no. 3, 4 & 5 in assessee’s appeal is allowed and ground no. 2 in Revenue’s appeal is dismissed. 63. Ground no. 1 & 2 in assessee’s appeal and ground no. 1, 3 & 4 in Revenue’s appeal relates to addition of on-money. We find that these grounds of appeal are similar to ground no. 6 raised by assessee in A.Y. 2023-24 and ground no. 7 to 9 of appeal by Revenue for A.Y. 2023-24, wherein we have allowed part relief to the assessee and dismissed the corresponding ground of appeal by Revenue in appeal for A.Y. 2023-24. Thus, following the principle of consistency, the grounds of appeal no. 1 & 2 by assessee are partly allowed and ground no. 1, 3 & 4 by Revenue is dismissed. 64. Ground no. 7 to 9 in Revenue’s appeal relates to telescoping benefit of on- money. We find that while deciding appeal for A.Y. 2023-24, we have confirmed the order of ld. CIT(A) on similar issue by upholding his view that when there is allegation receipt of on-money, the unexplained expenditure is a part of alleged on-money, therefore, no separate addition on such alleged unexplained expenditure is justified. Thus, we do not find any merit in the corresponding ground of appeal raised by Revenue. In the result, these grounds of appeal as well as other ground of appeal being ground no. 6, 7 & 9 raised by Revenue have no merit. In the result, all these grounds of appeal are dismissed. 65. In the result, the appeal of the assessee is partly allowed and appeal of Revenue is dismissed.

ITA Nos. 8033 to 8039/Mum/2025 (AY: 2018-19 to 2024-25) & ITA Nos. 7707 to 7713/Mum/2025 (AY: 2018-19 to 2024-25) Wheelabrator Alloy Castings Ltd.

Sd/- Sd/- OM PRAKASH KANT PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, Dated: 07/09/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai