ACIT CC -6(1), MUMBAI, BKC, MUMBAI vs. GNP CONSULTANCY AND SOLUTIONS PVT. LTD., THANE

During the course of search at the residential premises of Shri Kaustab Latke an image was retrieved from the Whatsapp message. Based on the said Whatsapp message received from Mr. Pradip Uday Dahale who is the broker of various plots of land, the AO made an addition of Rs. 13,09,93,119/- during the AY 2021-22. For the year under consideration, the AO made similar addition based on the same Whatsapp message for the balance amount as reflected in the said messages to the tune of Rs. 22,84,97,381/-. The additions made in the earlier year was based on the contention that the amount mentioned in the Whatsapp message is receivable by the assessee. The CIT(A) held that during the course of search no huge amount has been seized or discovered and the nature of various entries in the Whatsapp message is duly explained by the broker who owned the documents as mentioned in the Whatsapp messages. The CIT(A) further held that the AO himself has accepted that assessee has already offered Rs. 1,00,000/- per unit as unaccounted consultancy fees and that the addition made by the AO is merely based on assumptions without any evidences. The CIT(A) relied on his own order for AY 2021-22 while deleting the addition made by the AO.

The ld. AR submitted that the issue is covered by the decision of the Co- ordinate Bench in assessee's own case for AY 2021-22 where the Tribunal has confirmed the decision of the CIT(A). The ld. AR further submitted that for the year under consideration, the AO has made the balance amount as mentioned in the same Whatsapp message and therefore the decisions of the Co-ordinate Bench is applicable for the year under consideration also.

The ld. DR on the other hand vehemently argued that the reason for the broker sending the WhatsApp messages to the assessee is not explained. The ld DR further argued that if the amounts stated in the message do not pertain to the assessee then why the same is sent to the assessee and this factor is not examined by the CIT(A). Accordingly the ld DR supported the order of the AO.

We heard the parties and perused the material on record. We notice that the Co-ordinate Bench while considering the issue of addition based on the Whatsapp messages in assessee's own case (ITA No. 3110 and 2547/Mum/2023 dated 20.03.2024) has held that “66. Ground number 8 of the appeal is with respect to the deletion of addition of ₹ 130,993,119 and further ground number 9 relates to the same issue wherein the same seized document is dealt with.

The facts relating to the issue shows that during search proceedings certain images were retrieved from the mobile phone of Mr. Kaustubh latke , promoters of the GNP group, which relates to the on money received against the services provided to various clients for allotment of TTC cluster and AARUL cluster. It is the claim of learned AO that assessee has received ₹ 46.54 crores out of which ₹ 35.95 crores has already been received by the assessee through various brokers. Seized document shows that there is a tabulated sheet mentioning the name of eight brokers in the first column, in the second column rate is mentioned at ₹ 30 lakhs to 15 lakhs, in column number 3 the number of cases related to each of the broker is mentioned. The total of that column shows that there are 282 transactions. The total receivable broker Wise was mentioned in column number four wherein the total amount receivable is mentioned at ₹ 46.54 crores, in column number five total sum received of each of the broker is mentioned in the total of such column is ₹ 359,490,500/- and in the subsequent column is outstanding balance of each of the broker and the total of such outstanding sum is ₹ 95,206,500/-. Another mage was also found wherein the name of four brokers are mentioned showing total of ₹ 16.24 crores as amount received till date and further the name of the brokers is mentioned against them amount received is mentioned. At third message was also found wherein against the name of broker certain figures are mentioned. During search the AO questioned the director who claimed that these are the amounts directly paid by the buyers to Maharashtra industrial development Corporation (MIDC) and those are made through cheque. The director also provided listed of units handled by each of the broker. In post search proceedings, director of the company accepted that the assessee has received ₹ 1 lakh per plot as its service fees for total 281 clients. He submitted that two hundred clients are handled by him for AARUL cluster and 81 clients are handled by him for TTC cluster. He submitted that these incomes are offered in assessment year 2020 – 21 and 2021 – 22. The learned assessing officer noted that from the image it is apparent that a sum of ₹ 13 lakhs to ₹ 18.60 lakhs per plot was received or receivable. According to that, he found that all 151-unit holders who are being handled by one broker Mr. Udhay Dahale in two different clusters has different prices. The AO noted that in case of one cluster, prizes ₹ 5,026,220 and in another cluster, it is ₹ 970,360/– respectively. Thus, the amount stated by the director does not commensurate with the amounts mentioned through cheque payments. The AO issued notice under section 142(1) of the act. Assessee claimed that the transactions appearing in the said evidence is between the buyers and the sellers through various brokers and assessee is neither a buyer nor a seller. Assessee however did not comment and stated that such evidence can be explained by the brokers only. The learned assessing officer rejected the contention of the assessee holding that such evidencehas been retrieved from the mobile phone of the promoter of the assessee group and therefore the onus lies on him to explain the content of said evidence along with documentary evidence. As the director of the company has stated that these are cheque payments, but he failed to substantiate with documentary evidence. Therefore, in absence of that evidence, the AO noted that total receivable amount against various brokers for both the clusters for 281 clients are mentioned at ₹ 46.54 crores. The assessee has accepted that unaccounted income of ₹ 81 lakhs in respect of all eighty-one units of TTC cluster at the rate of ₹ 1 lakh per unit. Against the name of Mr. Uday Dahale total number of cases are eighty-one of TTC cluster and seventy of AARul cluster totalling to 151 units. The total amount received mentioned is ₹ 244,197,000/- (mentioned in fifth column of the seized document against name of Mr. Uday Dahale). Thus, the AO found that the total amount received for 251 cases is ₹ 244,197,000/- and therefore for eighty-one units the amount would be ₹ 130,993,119/–. When this addition was made AO also issued summons to the broker for recording his statement on oath, but he did not attend because of death of his mother. Subsequently letter dated 22/12/2022 he was asked, and he agreed with the claim made by the director of the company and GNP group. The assessee explained that the said payments were made through cheque by the customers/clients directly to the MIDC. The learned AO did not accept, as the director of the company could not produce the details. The AO also disbelieved the receipt of ₹ 1 lakh per unit being consultancy fee of the assessee. Based on this the learned AO made an addition of ₹ 130,993,119/– and of ₹ 81 lakhs to the total income of the assessee as unaccounted business receipts.

The learned CIT – A dealt with this issue as per ground number 5 of his order. The learned CIT – A deleted the addition for the following reasons:- i. Assessee is in the business of providing consultancy services in the field of industrial setup in MIDC.

The learned AO is aggrieved and is in appeal before us against the deletion of the above sum. The learned CIT DR vehemently supported the order of the learned assessing officer. He submits that there is no reference of the rates submitted in the seized document of ₹ 15 lakhs to ₹ 13 lakhs stated in the seized documents. Therefore, this aspect has not at all been considered. He extensively referred to the seized document as well as the finding of the learned assessing officer.

The learned authorized representative specifically referred to the seized document placed at page number 556 of the paper book. It was stated that the brokerage is not added to the total income of the assessee, but the total sale price is added to the total income of the assessee. He submits that as the land belongs to the MIDC and not to the assessee the sale price cannot be considered as income of the assessee. Therefore, according to him it is not the income of the assessee. He submitted that the assessee has already disclosed the consultancy charges of ₹ 1 lakh per unit for 281 units therefore the learned CIT – A is correct in deleting the addition.

We have carefully considered the rival contention and perused the orders of the lower authorities. During search WhatsApp image was found from the mobile phone. The WhatsApp image is an excel sheet where the name of various brokers, the rate of the land, number of cases handled by each of the broker and amount receivable for the transaction and total amount received until date along with the outstanding balance is mentioned. The explanation of the assessee is that the name of the broker is mentioned who have dealt with in purchasing the land by the clients brought in by broker for MIDC allotment. Thus, on careful perusal of the document it is apparent that there are seven brokers who have brought in 282 clients. Out of these 282 clients, one client is directly brought in by the assessee. Therefore, the brokers in turn have brought 281 clients. For all these clients the total amount receivable for allotment of land is ₹ 46.54 crores, out of which ₹ 35.95 crores is received and balance of ₹ 9.52 crores is outstanding. The assessee has charged fees of ₹ 1 lakh per unit for 281 units sold through all these brokers for which occupation certificate is received and possession is granted to those parties. The explanation of the assessee before the AO was same, such statement was also confirmed by the broker, the land transferred to the various parties did not belong to the assessee therefore naturally the sale consideration of that land could not be the income of the assessee. As the land does not belong to the assessee the rates mentioned in the column number 2 of the seized documents is irrelevant for the taxation in the hands of the assessee. The assessee has shown that this is the amount payable by these unit acquired to the MIDC, and sample cheques details is provided. Therefore, as the land is transferred by MIDC to the respective unit holders through all these brokers for which the assessee has received consultancy fees of ₹ 100,000/- for each unit, the whole of the sale transaction of the land cannot be taxed in the hands of the assessee. Merely because the assessee failed to provide the documentary evidence of payment of cheque by the unit acquired to the MIDC, the whole income cannot be taxed in the hands of the assessee when assessee is not shown to be the owner of such land. In the hands of the assessee, a sum of Rs. 2.81 crores have already been taxed on basis of this document. In view of this we do not find any infirmity in the order of the learned CIT – A in deleting the total addition of ₹ 13.09 crores in the hands of the assessee. Accordingly, ground number 8 and 9 of the appeal is dismissed.”

The AO made the addition of Rs. 22,84,97,381/- based on the same Whatsapp message basis which a similar addition was made for AY 2021-22 (refer page 3 of AO's order). Therefore, there is merit in the submissions that the issue is covered by the decision of the Co-ordinate Bench in assessee's own case for AY 2021-22. Respectfully following the above decision, we hold that there is no infirmity in the order of the CIT(A). Grounds raised by the revenue in this regard are dismissed.

The AO made various additions under section 69C of the Act to the tune of Rs.4,49,32,144 as unexplained. The AO in this regard relied on the Whatapp messages, excel sheet contained in pen drive seized. The CIT(A) has deleted the addition based on the submissions and the evidences submitted by the assessee. The main contention of the ld AR in this regard is that the expenditure incurred has not been separately claimed and is subsumed in the claim of profit as offered pursuant to search i.e. 70% of the receipts in the case of Consultancy income already offered. The ld AR in this regard took us through the submissions made by the assessee before the CIT(A) along with supporting documents from the paper book. The ld AR argued that the CIT(A) has considered the each and every item of the detailed submission as extracted below before giving relief to the assessee –

The ld AR further submitted that the similar additions made by the AO in AY 2021-22 were deleted by the CIT(A) and the coordinate bench has upheld the order of the CIT(A). It is also submitted by the ld AR that the department has not preferred further appeal against the order of the Tribunal. Accordingly the ld AR argued that the findings of coordinate bench in AY 2021-222 is applicable for the year under consideration also.

The Ld DR on the other hand argued that the addition made under section 69C is subsumed in the undisclosed expenses declared during the course of search is not substantiated by the assessee with any evidence and therefore the AO has correctly made the addition.

We heard the parties and perused the material on record. The coordinate bench in assessee's own while considering the issue of additions made by the AO under section 69C has held that –

Thus, the total addition under section 69C of the act is cumulatively of all such transactions totalling to ₹ 54,830,909/- was made.

All these additions were challenged before the learned CIT – A as per ground number 13 before him which has been dealt with in paragraph number 15 of the order. The learned CIT – A noted that assessee has offered the income at the rate of 70% of gross business receipts as additional income after claiming estimated expenses deduction of 30% under section 132 (4) of the act. As per estimation made by the assessee it has presumed that all unaccounted expenditure incurred for earning the income are subsumed in that income so offered and therefore no separate claim of expenditure has been made by the assessee and therefore no separate addition should be made of unaccounted expenditure incurred by the assessee. The assessee submitted these details of such expenditure in the paper book filed, and in the return of income assessee offered that income. During assessment proceedings, the learned assessing officer made a separate addition of ₹ 5.48 crores. The learned CIT – A was requested to consider the argument that assessee has already disclosed the income however has not claimed any such expenditure and therefore no disallowance/separate addition can be made and secondly the addition made by the learned assessing officer has been subsumed in 30% of the total business receipts. The learned CIT – A held that once the receipt has already been taxed, the application of such income in the form of expenditure could not be once again added to the total income of the assessee. He further held that when learned assessing officer has believed the business receipts as per seized documents, the expenditure also has to be believed and therefore the net income is to be estimated and no separate addition is required to be made under section 69C of the act as held by the honourable Bombay High Court in case of Golani Bros (2017) 85 taxmann.com 355 (Bom). Similar view has also been taken by the honourable Delhi High Court in 349 ITR 85. Accordingly in paragraph number 15.13 after discussing the plethora of judicial precedents the learned CIT – A held that since the entire receipts found as a business receipt under section 28 of the act has been considered, deduction of expenditure must be granted to the assessee and net income is to be estimated. Therefore, separate addition in respect of unexplained expenditure cannot be made. Accordingly, he deleted the entire addition of ₹ 5.48 crores. Thus, the learned assessing officer is aggrieved and is in appeal before us.

The learned departmental representative vehemently supported the order of the learned assessing officer and submitted that when each of the document, the income has been added separately, the expenditure which has also been stated in the same documents are also required to be adjusted under section 69C of the act. Argument of the learned departmental representative is that all this expenditure is unexplained expenditure and are not received so the logic given by the learned CIT – A in deleting the addition is incorrect. He further submitted that section 69C bars any deduction in the act. He submitted that the proviso is clear on this account.

The learned authorized representative supported the order of the learned CIT appeal. He further referred to the several judicial precedents and the binding judicial precedents of the honourable Bombay High Court in case of Golani Bros (supra). He submits that assessee has already offered the gross income less 30% expenditure, AO has also taxed the income in the seized documents, in the same document there is reference of expenditure, therefore, it is unfair for the revenue to only tax the income and do not give any credit for expenditure already incurred. He submits that assessee has not claimed any expenditure specifically. In view of this, his argument was that it would amount to double disallowance/addition.

We have carefully considered the rival contention and perused the orders of the lower authorities. Looking to all the additions, it is apparent that the learned assessing officer from the statement has investigated the opening balances stated in that particular document and the receipt. The learned assessing officer has made addition of the opening balance as well as the receipt as undisclosed income of the assessee. When in the same document there are references of the expenditure, the learned assessing officer has further added such expenditure under section 69C of the act. It is apparent that only the net addition is required to be made arising out of the seized documents. If the approach of the learned assessing officer is accepted, it will result into the addition of the income as well as the addition of expenditure under section 69C of the act. The learned CIT – A has also relied upon the decision of the honourable Bombay High Court in case of Golani Bros, (supra). We do not see any infirmity in the order of the learned CIT – A. Even the statement that the logic given by the learned CIT – A is not correct is also not supported by the reason. Further provisions of section 69C of the act applies where in any financial year the assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part there of the explanation offered by him is not in the opinion of the assessing officer satisfactory, then amount covered by such expenditure or part thereof, is the case may be maybe, deemed to be the income of the assessee for such financial year. The proviso also says that when there is an addition under section 69C of the act such unexplained expenditure, which is deemed the income of the assessee, should not be allowed as a deduction under any head of income. In the present case, assessee has incurred certain expenditure, which is found during search in the seized documents, the seized documents also show the amount of undisclosed income and the amount of expenditure incurred for earning such income. In those circumstances, the disclosure of undisclosed income shows the source of such expenditure. Therefore, naturally net income in the seized document can be assessed as income. If the approach of the ld. AO is accepted then in such case, Income and its application both are taxable as income. This is not correct. In view of this we do not find any infirmity in the order of the learned CIT – A in deleting the addition of ₹ 54,830,909/– under section 69C of the act. Accordingly, ground number 7 of the appeal is dismissed.

From the perusal of the above findings it is clear that the basis of making additions made for AY 2021-22 are identical to the additions by the AO for the year under consideration. The coordinate bench while confirming the relief given by the assessee has held that when the net income offered by the assessee, addition towards unexplained expenditure once again cannot be made. Further the coordinate bench has held that the disclosure of undisclosed income is the source for the expenditure and therefore it is the net income that needs to be taxed. The Tribunal also did not find any infirmity in the reliance placed by the CIT(A) in the decision of Hon'ble Bombay High Court in the case of Golani Bros (supra). During the course of hearing, the revenue did not bring any new material on record to controvert the findings of the Tribunal. In view of these discussions and respectfully following the above findings of the coordinate bench we see no reason to interfere with the decision of the CIT(A) for the year under consideration. The grounds raised by the revenue in this regard are dismissed.

The Assessee had offered consultancy receipts at 70% of the gross receipts thereby claiming 30% as expenses for earning the said receipts without making any separate claim for expenses though evidences of expenditure were also found along with the evidences of receipts discovered at the time of search. The AO held that the Assessee has claimed expenses at 30% without any supporting evidences such as the names, addresses, PAN of the parties to whom the payments are made etc. Accordingly the AO made an addition of Rs. 3,54,05,400/- being claimed @ 30% of the unaccounted receipts disclosed of Rs. 11,80,18,000/- under section 69C of the Act. The CIT(A) deleted the addition by holding that since the AO has duly considered the entire receipts found as business receipts u/s 28 of the Act, deduction of expenditure has to be granted and net income is to be estimated. Accordingly the CIT(A) held that separate addition in respect of unexplained expenditure cannot be made where source is duly accepted as out of business receipts.

We heard the parties and perused the material on record. We notice that the AO has made a similar disallowance for AY 2021-22 which was deleted by the CIT(A). We further notice that the revenue preferred an appeal before the coordinate bench against the order of CIT(A) and the coordinate bench while upholding the order of CIT(A) has held that –

Learned AO is aggrieved with the same and is in appeal. The learned CIT DR vehemently supported the order of the learned assessing officer and submitted that no such expenditure can be granted as deduction on estimated basis in the absence of any expenditure incurred wholly and exclusively for earning of such income.

The learned authorized representative vehemently supported the order of the learned CIT – A.

We have carefully considered the rival contention and perused the orders of the lower authorities. We find that in paragraph number 16.7 of the appellate order the learned CIT – A has categorically noted that assessee has incurred expenditure in its regular business at the rate of 28% to 62% and average net profit for all the years' amounts to 53% of the gross receipts. Further in the seized documents, unaccounted receipts were found of ₹ 23.67 crores and unaccounted expenditure was found at ₹ 7.19 crores which is almost 30.03% of the unaccounted receipts and therefore the claim of the assessee is reasonable and can be accepted that the gross receipts 30% of deduction should be allowed for the expenditure incurred by the assessee. Accordingly, we do not find any infirmity in the order of the learned CIT – A which is based on the financial statements of the assessee for past year as well as based on evidence found during search in the seized material. Accordingly, ground number 10 of the appeal of the AO is dismissed.

In the result, appeal filed by the learned AO is dismissed.

We notice that the coordinate bench has upheld the order of CIT(A) on the ground that the past financial statements as examined by the CIT(A) and the seized materials supports the claim that the expenditure incurred by the assessee is around 30% . For the year under consideration the revenue did not submit any evidence to support that the said percentage cannot be applied for the year under consideration also. Therefore in the absence of any contrary material being brought on record we see no reason to take a different view from the view taken by the coordinate bench for AY 2021-22. Accordingly we hold that there is no infirmity in the order of the CIT(A) in this regard. Ground No.4 of the revenue is dismissed.

During the year the Assessee had incurred certain expenditure in respect of rent paid at Rs.1,75,000 per month and the same is claimed as expenditure under section 37(1). It is submitted by the assessee before the AO that the said premises were residential premises being used by the assessee for its business purposes and the Director himself was present in the premises at the time of search. However the AO did not accept the submissions of the assessee and held that no supporting evidence has been provided by assessee that said premises have been used for business purpose except for merely stating that same has been used as a guest house for their business purpose. Accordingly the amount of rent was disallowed on the ground that the same is personal expense and cannot be allowed u/s 37(1). Before the CIT(A), the assessee submitted that the rent is paid to Mrs. Shivika Garg is paid by cheque and duly recorded in regular books of accounts and that no evidence is found during the search that these expenses are not genuine. The CIT(A) confirmed the addition for want of evidence in support of the claim,

Before us the ld AR submitted that the expenditure incurred is not personal in nature and that the said premises are used by the Director for his residence. Therefore the ld AR submitted that there is no question of making an addition in the hands of the Assessee.

The ld DR submitted that the addition is made since the assessee has not submitted any evidence to support the claim that the rent is paid towards the premises that is used for business purposes.

In result the appeal of the revenue and the appeal of the assessee are dismissed.

The revenue and the assessee raised the following grounds of appeal: “Revenue: i. Whether on the facts and in the circumstances of the case and in law the Ld. CITIA) erred in deleting the additions of Rs. 51,48,38,250/- (u/s 694 & 69C) by merely stating that these amounts were not owned up by the assessee but by Sh. Shailesh Patil without appreciating the fact that Shri Shailesh Patil could not identify even a single party other than the GNP in the said document and he could not substantiate his claim with any supporting documents?"

The CIT(A) after considering all the facts, relied on the order dated 20.03.2024 of the Hon'ble ITAT in & 2547/Mum/2023 and stated that the Hon'ble ITAT has upheld the findings of CIT(A) and held that no addition is required to be made on this ground as the document found and the transactions contained therein had been duly owned up by Sh. Shailesh Patil. The CIT(A) however confirmed the disallowance of Rs.33,20,000/- on the ground that while Shri Shailesh Patil stated that the same belonged to the GNP Group, these entries have not been owned up by the GNP Group in the reply given by the Assessee. Therefore the addition was made in the hands of the Assessee. Accordingly both the assessee and the revenue are in appeal.

With regard to the ground raised by the revenue, the ld AR submitted that the issue is covered by the decision of the coordinate bench in assessee's own case for AY 2021-22 and that the CIT(A) has correctly given relief to the assessee by relying on the same. With regard to the addition confirmed by the CIT(A) to the tune of Rs.33,20,000/- the ld AR made the following submission –

We heard the parties and perused the material on record. We notice that the coordinate bench in the appeal for AY 2021-22, has considered the issue additions made based on statement of Mr. Shailesh Patil and held that –

The learned CIT – A was categorically submitted that WhatsApp image was found was received from mobile numbers of Mr. Sailesh Patil – 2 that clearly show that it belongs to him and not to the assessee company. In 132(4) statements of the director of the assessee Mr. Girish Pawar he has categorically stated that Mr. Sailesh Patil is a trusted associate who used to help in movement of cash received and paid in the construction business of the assessee. On the issue of various entries found therein, the director of the company identified some of the entries and stated that only Mr. Sailesh Patil who has sent this message would be able to show to whom it belongs. It was further stated that the Mr. Sailesh Patil is not the employee of the assessee. On the several entries, the director of the assessee also stated that in the assessment, assessee has offered the income with respect to the same. The summons under section 131 was issued to Mr. Sailesh Patil, his statement was recorded. He stated that. i. He is into the business of angadia, and he collects cash from one-place office customers and delivers the cash at other place as instructed by his customers. ii. He confirmed that he has sent the above WhatsApp message to the director of the company. iii. Assessee group is also one of the clients to whom he provides the angadia services. iv. He further confirmed that he collects cash from the various offices of the assessee and delivers the cash according to the instruction.

Therefore, we do not find any infirmity in order of learned CIT – A in holding so. Accordingly, ground number 3 of the appeal is dismissed.

The coordinate bench held the issue in favour of the assessee for the reason that nothing is brought on record to show why the document does not belong to Mr. Sailesh Patil who originated the message and sent to the assessee director. For the year under consideration also, the revenue has not submitted any evidence to substantiate the claim the amounts mentioned in the message belongs to the assessee. We further notice that the CIT(A) while giving relief to the assessee has given a categorical finding in this regard (refer para 5.18 of CIT(A) order). Therefore we see no reason to interfere with the order of the CIT(A). Ground No.1 of the revenue is dismissed accordingly.

Now coming to the ground 1 of the assessee, we notice that the CIT(A) has confirmed the addition based on the statement of Mr. Sailesh Patil who has stated that the amounts belonged to GNP group. However from the perusal of the statement made by Mr. Sailesh Patil basis which the CIT(A) we notice that statement is vague such "to the best of my knowledge the transaction belongs to GNP". We also notice that the director of the assessee has stated that these entries do not belong to GNP group. Since the assessee cannot be asked to prove a negative fact, the revenue in our view should have made the addition based on some evidence and not based merely on the statement of Mr. Sailesh Patil. Therefore in our considered view, the ratio laid down by the coordinate bench in AY 2021-22 that the addition based on mere statement without any evidence is not sustainable, is applicable to the impugned additions also. Therefore we hold that the CIT(A) is not correct in confirming the addition to the tune of Rs.33,20,000 based on the statement alone without bringing any evidence to support the said claim. Accordingly we direct the AO to delete the addition made in this regard. Ground No.1 of the assessee is allowed.

Ground No.3 & 4 of the revenue is with regard to the relief given by the CIT(A) towards the addition made towards unexplained expenditure under section 69C of the Act. The assessee submitted before the AO that the impugned expenses are subsumed in the net income offered at 80% offered during the course of search and that when the income is accepted, the AO cannot deny the expenses claimed against the same. However the AO did not accept the submissions of the assessee and made the addition for the following reasons – With regards to expenses of Rs. 10,00,49,236/-  The assessee has not furnished the details of parties to whom the payments were made their PANs, no other documents, bills etc have been submitted in respect of the expenses of Construction expenses of Rs.8,49,58,296/-, Consultancy expenses of Rs.1,19,40,000/- and personal expenses of Rs.31,50,940/- aggregates to Rs. 10,00,49,236/-. The seized document being whatsapp chats retrieved from the office premises of GNP show that cash expenses have been incurred and the same are not recorded.  With regards to expenses of Rs. 3,17,65,000/-  It was alleged that the assessee has not submitted any evidences to show that these expenses incurred pertains to the undisclosed receipts which was disclosed by the assessee and its group entities.  The assessee has not furnished the details of parties to whom the payments were made their PANs, no other documents, bills etc have been submitted in respect of the expenses of Construction expenses of Rs.2,55,70,000/-, Consultancy expenses of Rs.56,59,000/- and personal expenses of Rs.5,36,000/- aggregating to Rs.3,17,65,000/-.  The seized document being whatsapp chats retrieved from the office premises of GNP show that cash expenses have been incurred and the same are not recorded in the books of account of the assessee. Therefore a sum of Rs. 3,17,65,000/- was added to the total income of the assessee u/s.69C of the IT.Act, 1961. With regards to expenses of Rs. 51,00,000/-  The assessee explained that these are brokerage payments to parties of projects GNP-Arcadia, Galaxy, Ganadhish GNP and the same is not claimed as expenses separately as the assessee has claimed 80% of expenses against on money received and disclosed 20% of on-money receipts as additional income. This explanation was not accepted on the ground that the assessee has not corelated the expenses claimed as brokerage paid to Shri Ganesh Kotekar, Shri Bhushan Kotekar and others with details of flats in respect of which the brokerages were paid. Further the assessee has not submitted address, PANs of the parties, etc. With regards to expenses of Rs. 20,82,000/-  The AO rejected the assessee's explanation that cash payment voucher are nothing but expenditure incurred for the purpose of business of consultancy and construction of group and also that it had disclosed unaccounted business receipts and no separate claim was made in respect of any expenses  The AO further held that no details in respect of vouchers were furnished such as name, PAN of the parties to whom payments are made. Shri Kaustub Latke from whom the cash vouchers were found had admitted that they are not accounted in its books of account. Therefore, a sum of Rs. 20,82,000/- was added to the total income under section 69C of the IT Act, 1961. With regards to expenses of Rs. 3,90,700/-  The addition was made on the ground that the assessee did not submit any evidences to show that these expenses incurred pertains to the undisclosed receipts which was disclosed by the assessee and its group entities. Further the assessee has not furnished the details of parties to whom the payments were made their PANs, no other documents, bills etc have been submitted in respect of the expenses of Rs.3,90,700/-.  The seized document show that cash expenses have been incurred and the same are not recorded in the books of account of the assessee and therefore a sum of Rs.3.90,700/- was added to the total income of the assessee u/s.69C of the I.T.Act, 1961.

Aggrieved the assessee preferred further appeal before the CIT(A). The assessee submitted before the CIT(A) that seized papers have to be interpreted as a whole and that the Ld. AO cannot accept part of the same and ignore the rest. The assessee further submitted that the AO has made the addition of unaccounted business receipts u/s 28, however, no deduction of expenses was allowed by him and made further addition of Rs. 13,93,86,936/- as unexplained expenditure u/s 69C of the Act despite the fact that source of the same duly accepted as business receipts u/s 28 of the Act. The CIT(A), after considering the submissions of the assessee deleted the addition by holding that the assessee has offered total unaccounted business receipts of Rs. 31.32 Cr. (Rs. 19.72 Cr. for the FY 2018-19 & Rs. 11.60 Cr. for the FY 2019-20) and source of incurring such unaccounted expenses of Rs. 13.93 Cr has been explained to be out of unaccounted business receipts of group offered to tax of Rs. 31.32 Cr as above and assessed u/s 28 by the Ld. AO in the case of the assessee and other GNP group entities. The CIT(A) further held that personal expenses / withdrawals amounted to Rs. 36,86,940/- are duly shown as application of undisclosed income offered by assessee group wherein Promoters are Partners and no separate additions have been made and sufficient source of income are duly offered by above group entities/firms and accepted by the Ld. AO. Accordingly the CIT(A) gave relief to the assessee. The CIT(A) has placed reliance on the decision of the coordinate bench in assessee's case in this regard.

We heard the parties and perused the material on record. From the perusal of the facts pertaining to the additions made under section 69C we notice that the same is similar to additions made in AY 2021-22. The contention of the assessee is that the undisclosed expenditure added under section 69C is already part of the net income offered during the course of search. We have while deciding the similar issue for 2022-23 (refer our findings in the earlier part of this order) have placed reliance on the findings of the coordinate bench in AY 2021-22. i.e. The coordinate bench while confirming the relief given by the assessee has held that when the net income offered by the assessee, addition towards unexplained expenditure once again cannot be made. Further the coordinate bench has held that the disclosure of undisclosed income is the source for the expenditure and therefore it is the net income that needs to be taxed. During the course hearing the revenue did not bring any material on record for us to decide otherwise. Therefore respectfully following the decision of the coordinate bench we hold that there is no infirmity in the order of CIT(A) in giving relief to the assessee towards the addition made under section 69C of the Act. These grounds of the revenue are dismissed.

Ground No.4 of the revenue is regarding the disallowance of the claim of expenses @ 30% out of unaccounted business receipts offered by the Assessee. We have considered a similar issue for AY 2022-23 and by placing reliance on the findings of the coordinate bench for AY 2021-22 upheld the order of CIT(A) giving relief to the assessee. Since the facts are identical, we are of the view that our decision in AY 2022-23 is mutatis mutandis applicable to AY 2020-21 also. Further the revenue did not bring anything on record for the year under consideration to controvert the findings of coordinate bench in earlier years. Accordingly we see no reason to interfere with the decision of the coordinate bench. This ground of the revenue is dismissed.

In result the appeal of the revenue is dismissed and the appeal of the assessee is allowed.

The revenue raised the following grounds of appeal:

The appellant craves to leave, to add, to amend and/or to alter any of the ground of appeal

We heard the parties and perused the material on record. The ld AR submitted that the coordinate bench while considering a similar issue in the case of another group entity DCIT vs M/S.GNP Realty LLP (ITA No.3105/2023 dated 29.05.2024) has held that – 9. Though the Revenue Department has claimed in the grounds of appeal that offer of additional income by M/s. GNP Consultancy & Solutions Pvt. Ltd. was not accepted by the AO and corresponding amount was reduced while passing the assessment order in the case of M/s. GNP Consultancy & Solutions Pvt. Ltd. for the A.Y. 2021-22 as evident from the computation of income. Further, the said income of Rs.2.75 crores was not accepted by the AO in the case of M/s. GNP Consultancy & Solutions Pvt. Ltd. and therefore the addition was made in the case of assessee. However, before us no such facts and/or documents were produced or demonstrated to strengthen this contention. As per Article 265 of the Constitution of India “no tax shall be levied or collected except by authority of law”. It is also the mandate of the law that the income offered cannot be taxed twice. As in this case, the income of Rs.2.75 crores may be rightly or wrongly by the sister concern of the assessee, has already been offered and even has also been considered and accepted by the Revenue Department as verified by the Ld. Commissioner as observed in impugned order, therefore the addition under challenge, if sustained, will amount to double taxation, which is not permissible at all. Even considering the peculiar facts and circumstances of the case in totality and the specific findings of the Ld. Commissioner, we do not find any infirmity, impropriety and/or illegality in the decision arrived at by the Ld. Commissioner in deleting the addition of Rs.2.75 crores which is under consideration. Hence, the decision of the Ld. Commissioner for deleting of the addition under consideration is affirmed and the grounds raised by the Revenue Department pertaining to the issue under consideration stand dismissed/rejected.

In result appeal of the revenue is dismissed.

In result, appeals filed by Revenue for AY 2018-19, AY 2020-21 & AY 2022-23 are dismissed. The appeal of the assessee for AY 2020-21 is allowed and appeal of the assessee for AY 2022-23 is dismissed.