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185 orders · Page 2 of 4
The Tribunal held that the issue regarding the applicability of the amended provisions of section 115BBE, which increased the tax rate from 30% to 60%, is debatable and not a mistake apparent from the record. The Tribunal noted that judicial precedents, including decisions from the Madras High Court and ITAT benches, hold that the amendment is prospective and not applicable to Assessment Year 2017-18 for prior transactions.
The Tribunal noted that the disputed amount pertained to a property purchase, where the source of payment from both the assessee and his wife was explained. The confusion arose from incorrect reflection in the balance sheet, not from unexplained credit. Therefore, no addition was warranted.
The Tribunal held that the Assessing Officer failed to conduct proper verification, such as issuing notices under section 133(6) or verifying with other government authorities, before making the addition. The assessee had discharged its initial onus by providing customer details, and the AO had not adequately investigated the genuineness of the transactions.
The Tribunal held that the addition of Rs. 19,67,39,459/- made by the AO on account of alleged on-money received on sale of lands in Survey Nos. 340/1 and 341 was not correct. The CIT(A) had deleted this addition, finding that the seized material did not establish the receipt of brokerage and that the AO's assumptions were not supported by evidence. The Tribunal agreed with the CIT(A)'s finding that the seized material did not have the name of the assessee and that the AO had not established the correctness of the land deals through Shri Suresh R. Thakkar. Regarding the addition of Rs. 6,87,75,000/- for land in Survey No. 736/2, the Tribunal noted that the CIT(A) had sustained an addition of Rs. 1.08 crores against the AO's Rs. 6.87 crores. The Tribunal, referring to its decision in the case of Deepak Rambhai Mevada (IT[SS]A No.109/Ahd/2025), restricted the addition to Rs. 36,66,667/- on account of the cash component paid towards the purchase of land bearing Survey No. 736/2. The Tribunal dismissed the Revenue's ground regarding the admissibility of WhatsApp chat evidence, noting it was not argued seriously and was in support of earlier grounds. The addition of Rs. 16.50 crores on account of alleged undisclosed cash/capital contribution in Safalya Infralink LLP was deleted by the CIT(A) and the Tribunal found no reason to interfere, as the AO failed to provide corroborative evidence and reassessment proceedings in related cases were dropped. The ratio for the land in Survey No. 736/2 was applied to Anil Rambhai Mevada.
The Tribunal held that the assessee had provided documentary evidence, specifically a tax invoice and bank statements, proving the withdrawal of 150,000 AED from their UAE business account and its subsequent remittance to India. This established the source of the funds.
The Tribunal noted that the CIT(A) did not provide an opportunity for a hearing on merits. Therefore, the Tribunal set aside the CIT(A)'s order, directed the condonation of the delay in filing the appeal, and instructed the CIT(A) to decide the appeal on merits after providing the assessee with another opportunity to be heard.
The tribunal found that the CIT(A) failed to consider the assessee's submission and supporting documents, which was a violation of natural justice. Therefore, the matter was set aside to the CIT(A) for a fresh adjudication on merits after considering the submissions and obtaining a remand report from the AO.
The Tribunal held that the CIT(E) erred by rejecting the application solely based on the trust's constitution without a specific finding that the trust's income was actually applied for the benefit of a particular community. The matter was set aside and remanded to the CIT(E) to re-examine the application of income.
The Tribunal held that the addition of Rs. 19,67,39,459/- made by the AO on account of alleged on-money received on sale of lands in Survey Nos. 340/1 and 341 was not correct. The CIT(A) had deleted this addition, finding that the seized material did not establish the receipt of brokerage and that the AO's assumptions were not supported by evidence. The Tribunal agreed with the CIT(A)'s finding that the seized material did not have the name of the assessee and that the AO had not established the correctness of the land deals through Shri Suresh R. Thakkar. Regarding the addition of Rs. 6,87,75,000/- for land in Survey No. 736/2, the Tribunal noted that the CIT(A) had sustained an addition of Rs. 1.08 crores against the AO's Rs. 6.87 crores. The Tribunal, referring to its decision in the case of Deepak Rambhai Mevada (IT[SS]A No.109/Ahd/2025), restricted the addition to Rs. 36,66,667/- on account of the cash component paid towards the purchase of land bearing Survey No. 736/2. The Tribunal dismissed the Revenue's ground regarding the admissibility of WhatsApp chat evidence, noting it was not argued seriously and was in support of earlier grounds. The addition of Rs. 16.50 crores on account of alleged undisclosed cash/capital contribution in Safalya Infralink LLP was deleted by the CIT(A) and the Tribunal found no reason to interfere, as the AO failed to provide corroborative evidence and reassessment proceedings in related cases were dropped. The ratio for the land in Survey No. 736/2 was applied to Anil Rambhai Mevada.
The Tribunal held that the addition of Rs. 19,67,39,459/- made by the AO on account of alleged on-money received on sale of lands in Survey Nos. 340/1 and 341 was not correct. The CIT(A) had deleted this addition, finding that the seized material did not establish the receipt of brokerage and that the AO's assumptions were not supported by evidence. The Tribunal agreed with the CIT(A)'s finding that the seized material did not have the name of the assessee and that the AO had not established the correctness of the land deals through Shri Suresh R. Thakkar. Regarding the addition of Rs. 6,87,75,000/- for land in Survey No. 736/2, the Tribunal noted that the CIT(A) had sustained an addition of Rs. 1.08 crores against the AO's Rs. 6.87 crores. The Tribunal, referring to its decision in the case of Deepak Rambhai Mevada (IT[SS]A No.109/Ahd/2025), restricted the addition to Rs. 36,66,667/- on account of the cash component paid towards the purchase of land bearing Survey No. 736/2. The Tribunal dismissed the Revenue's ground regarding the admissibility of WhatsApp chat evidence, noting it was not argued seriously and was in support of earlier grounds. The addition of Rs. 16.50 crores on account of alleged undisclosed cash/capital contribution in Safalya Infralink LLP was deleted by the CIT(A) and the Tribunal found no reason to interfere, as the AO failed to provide corroborative evidence and reassessment proceedings in related cases were dropped. The ratio for the land in Survey No. 736/2 was applied to Anil Rambhai Mevada.
The Tribunal held that the reopening of assessment was invalid as it was based on a change of opinion without any fresh material. The Tribunal followed various High Court judgments stating that reopening is impermissible in such circumstances.
The Tribunal held that the reopening of assessment was invalid as it was based on a change of opinion without any fresh material. The Tribunal followed various High Court judgments stating that reopening is impermissible in such circumstances.
The Tribunal held that the reopening of assessment was invalid as it was based on a change of opinion without any fresh material. The Tribunal followed various High Court judgments stating that reopening is impermissible in such circumstances.
The Tribunal held that the assessee could not be treated as an assessee in default as it was bound by the interim directions of the Madras High Court, which prevented tax deduction. Therefore, the demand under Section 201(1) and interest under Section 201(1A) were deleted.
The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision. It found no prejudice in admitting official documents as additional evidence and agreed that the lands were agricultural and outside the scope of Section 194-IA, thus not requiring TDS deduction.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
The Tribunal dismissed the Revenue's appeals for all assessment years. The assessee's appeals for AY 2018-19 and 2021-22 were partly allowed, the appeal for AY 2020-21 was allowed, and the appeal for AY 2017-18 to 2019-20 regarding the validity of assessment was dismissed.
The Tribunal dismissed the Revenue's appeals for all assessment years. The assessee's appeals for AY 2018-19 and 2021-22 were partly allowed, the appeal for AY 2020-21 was allowed, and the appeal for AY 2017-18 to 2019-20 regarding the validity of assessment was dismissed.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
The Tribunal dismissed the Revenue's appeals for all assessment years. The assessee's appeals for AY 2018-19 and 2021-22 were partly allowed, the appeal for AY 2020-21 was allowed, and the appeal for AY 2017-18 to 2019-20 regarding the validity of assessment was dismissed.
On the issue of unsecured loans (Issue 1), the Tribunal noted that the Ld. CIT(A) had deleted the addition after examining lender-wise details, including confirmations, PAN, IT returns, and bank statements, and finding that loans were received through banking channels. The Revenue's grounds of appeal on this issue were dismissed. Regarding unexplained expenditure (Issue 2), the Tribunal observed that the Ld. CIT(A) had confirmed the addition on the ground that evidence was not provided to the Assessing Officer. In the interest of natural justice, the Tribunal set aside this issue to the Assessing Officer for verification of the notings against actual transactions recorded in the books of account, allowing the ground of appeal for statistical purposes. On the procedural issue of additional evidence (Issue 3), the Tribunal's decision on the unexplained expenditure implicitly addressed this by remanding the issue. For the legal ground challenging the validity of assessment under Section 153A (Issue 4), the Tribunal found that assessments were completed based on seized material and, relying on a previous ITAT decision, dismissed the assessee's appeal on this ground. The Revenue's appeals for AYs 2014-15 to 2021-22 were dismissed. Assessee's appeals for AYs 2018-19 and 2019-20 were partly allowed, for AY 2020-21 allowed, and for AY 2021-22 partly allowed for statistical purposes.
The Income Tax Appellate Tribunal condoned the delay in filing the appeal. Following a co-ordinate bench decision in a similar case (Harish Kumar vs. ITO), the Tribunal held that the compensation received under the BSNL VRS-2019 is exempt under Section 10(10B) of the Income-tax Act, 1961. Therefore, the assessee is eligible for tax exemption and refund of TDS.
The Income Tax Appellate Tribunal condoned the delay in filing the appeal. Following a co-ordinate bench decision in a similar case (Harish Kumar vs. ITO), the Tribunal held that the compensation received under the BSNL VRS-2019 is exempt under Section 10(10B) of the Income-tax Act, 1961. Therefore, the assessee is eligible for tax exemption and refund of TDS.
The Tribunal admitted additional evidence filed by the assessee. Since the Revenue had no opportunity to examine this evidence, the matter was remanded to the Assessing Officer for verification and a fresh order.
The Tribunal found that the assessee had already deducted and paid the TCS, and the respective parties involved in the transactions had also paid their taxes. Therefore, the Assessing Officer and CIT(A) were incorrect in imposing the demand and penalty.
The Tribunal, acknowledging the delay, condoned it and remanded the case to the CIT(A) for de novo adjudication in the interest of justice. The assessee was directed to cooperate fully by providing all necessary details and avoiding unnecessary adjournments.
The Tribunal, noting the assessee's non-compliance but also considering the counsel's request for a fresh opportunity, decided to remand the matter to the Assessing Officer for a de novo assessment. The assessee is directed to furnish all relevant documents and comply with notices without seeking unnecessary adjournments.
The Tribunal held that the addition made by the AO was not sustainable. The assessee had declared substantial agricultural income and provided supporting documents like sales bills, farm income details, and cash book. The Tribunal noted the continuous pattern of cash deposits in earlier years, which corroborated the assessee's claim.
The Tribunal held that the assessee deliberately used the old company name for filings, misrepresenting the transaction. The valuation of shares was not substantiated as per Rule 11UA, and the investor lacked the financial capacity for the investment. The Tribunal upheld the addition made by the AO.
The Tribunal held that the loose sheets lacked crucial details and were not corroborated by other evidence. The employee later clarified the sheets pertained to his personal dealings, which the AO accepted in his assessment.
The Tribunal held that the loose sheets lacked crucial details and were not corroborated by other evidence. The employee later clarified the sheets pertained to his personal dealings, which the AO accepted in his assessment.
The Tribunal held that the loose sheets lacked crucial details and were not corroborated by other evidence. The employee later clarified the sheets pertained to his personal dealings, which the AO accepted in his assessment.
The Tribunal upheld the CIT(A)'s decision, finding that the assessee failed to provide satisfactory evidence that the cash deposits did not belong to him. The Tribunal noted an abnormal increase in gross receipts and a decrease in profit margins, suggesting the deposits were indeed the assessee's income.
The Tribunal partly allowed the appeal. For Section 14A disallowance, it directed a disallowance of Rs.13 lakhs, considering the assessee's suo motu disallowance and precedents. The disallowance for late payment of PF/ESI was dismissed based on a Supreme Court ruling.
The Tribunal held that the lower authorities' ad-hoc disallowances were not justified as the assessee had furnished extensive details and evidence. The AO failed to point out specific discrepancies, making general and vague observations. Therefore, the disallowances were ordered to be deleted.
The Tribunal held that the reassessment proceedings were initiated on the basis of information indicating escaped income below the statutory threshold of Rs. 50 lakhs. Consequently, the assumption of jurisdiction under Section 148 was invalid.
The Tribunal allowed Ground No. 1, finding that the assessee had established its onus for claiming LTCG. Ground No. 2 was also allowed, as the commission income was admitted and taxes paid, and the AO could not make it an addition. Ground No. 3 was partly allowed, with a direction to the AO to re-examine the STCG reconciliation.
The Tribunal held that the loose sheets lacked crucial details and were not corroborated by other evidence. The employee later clarified the sheets pertained to his personal dealings, which the AO accepted in his assessment.
The Tribunal held that the interest income derived from deposits made from members' contributions was directly used for the maintenance and upliftment of the society, establishing a direct nexus between the expenses and income. Therefore, the addition made by the Assessing Officer was incorrect.
The Tribunal held that the entire on-money receipt cannot be considered as income; only the profit embedded therein is taxable, as per the decisions in PCIT vs. Anupam Organiser and DCIT vs. Panna Corporation (Guj). The CIT(A) had rightly held that only the profit embedded in the on-money receipt could be taxed and estimated profit at 17%. However, considering the nature of the project as ultra-luxurious and referring to various judicial pronouncements including Jay Builder v. Assistant Commissioner of Income-tax, [2013] 33 taxmann.com 62 (Gujarat) where 15% was upheld, the Tribunal deemed it appropriate to estimate the profit income out of the on-money received at the rate of 15%. Accordingly, the AO was directed to re-compute the business income by applying a profit rate of 15% on the on-money computed as per the CIT(A)'s directions. The assessee's ground was partly allowed, and the Revenue's ground was dismissed. The decision for A.Y. 2022-23 was applied mutatis mutandis to A.Y. 2021-22.
The Tribunal held that the entire on-money receipt cannot be considered as income; only the profit embedded therein is taxable, as per the decisions in PCIT vs. Anupam Organiser and DCIT vs. Panna Corporation (Guj). The CIT(A) had rightly held that only the profit embedded in the on-money receipt could be taxed and estimated profit at 17%. However, considering the nature of the project as ultra-luxurious and referring to various judicial pronouncements including Jay Builder v. Assistant Commissioner of Income-tax, [2013] 33 taxmann.com 62 (Gujarat) where 15% was upheld, the Tribunal deemed it appropriate to estimate the profit income out of the on-money received at the rate of 15%. Accordingly, the AO was directed to re-compute the business income by applying a profit rate of 15% on the on-money computed as per the CIT(A)'s directions. The assessee's ground was partly allowed, and the Revenue's ground was dismissed. The decision for A.Y. 2022-23 was applied mutatis mutandis to A.Y. 2021-22.
The Tribunal held that the penalty was not sustainable as the assessee made full disclosure and took a bona fide legal view on the taxability of the receipt. The issue was also found to be debatable, with a reference to a Special Bench in the assessee's own case.
The Tribunal held that the entire on-money receipt cannot be considered as income; only the profit embedded therein is taxable, as per the decisions in PCIT vs. Anupam Organiser and DCIT vs. Panna Corporation (Guj). The CIT(A) had rightly held that only the profit embedded in the on-money receipt could be taxed and estimated profit at 17%. However, considering the nature of the project as ultra-luxurious and referring to various judicial pronouncements including Jay Builder v. Assistant Commissioner of Income-tax, [2013] 33 taxmann.com 62 (Gujarat) where 15% was upheld, the Tribunal deemed it appropriate to estimate the profit income out of the on-money received at the rate of 15%. Accordingly, the AO was directed to re-compute the business income by applying a profit rate of 15% on the on-money computed as per the CIT(A)'s directions. The assessee's ground was partly allowed, and the Revenue's ground was dismissed. The decision for A.Y. 2022-23 was applied mutatis mutandis to A.Y. 2021-22.
The Tribunal held that the entire on-money receipt cannot be considered as income; only the profit embedded therein is taxable, as per the decisions in PCIT vs. Anupam Organiser and DCIT vs. Panna Corporation (Guj). The CIT(A) had rightly held that only the profit embedded in the on-money receipt could be taxed and estimated profit at 17%. However, considering the nature of the project as ultra-luxurious and referring to various judicial pronouncements including Jay Builder v. Assistant Commissioner of Income-tax, [2013] 33 taxmann.com 62 (Gujarat) where 15% was upheld, the Tribunal deemed it appropriate to estimate the profit income out of the on-money received at the rate of 15%. Accordingly, the AO was directed to re-compute the business income by applying a profit rate of 15% on the on-money computed as per the CIT(A)'s directions. The assessee's ground was partly allowed, and the Revenue's ground was dismissed. The decision for A.Y. 2022-23 was applied mutatis mutandis to A.Y. 2021-22.