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“on-money”

Cash Credits & Unexplained ItemsSection 69BSection 69B1,574 judgments

The decision most relied on for on-money is CIT v. President Industries (258 ITR 654), cited in 471 judgments on BharatTax.

Leading authorities on on-money

CIT v. President Industries
258 ITR 654 · 2002 · High Court
471
citing judgments

When books of account are rejected and unaccounted sales or receipts are discovered, the income addition is restricted to the net profit element embedded in these undisclosed transactions, not the entire sale proceeds or receipts, especially if corresponding purchases are not proven to be outside the books.

CIT v. Balchand Ajit Kumar
263 ITR 610 · 2003 · High Court
212
citing judgments

When making an addition for unaccounted receipts, on-money, or non-genuine purchases/sales, the addition should be restricted to the estimated profit element embedded in such transactions, rather than the entire gross amount, particularly when evidence of corresponding expenditure is incomplete. This estimation often involves applying a net profit rate.

CIT v. Girish Chaudhary
296 ITR 619 · 2008 · High Court
175
citing judgments

Additions to income cannot be made solely based on "dumb documents" or vague loose papers seized during a search that merely indicate rates without specific corroborative material linking them to the assessee's unaccounted transactions. The presumption under Section 292C may not apply to such documents.

Principal Commissioner Income Tax, Central-2 v. Umesh Ishrani
108 Taxmann.com 437 · 2019 · High Court
168
citing judgments

An addition to income cannot be made solely based on entries in loose papers found during a search without conducting any independent inquiry or verification from the alleged seller or developer. Reliance solely on digital records without corroborative evidence is insufficient for an addition.

CIT v. Maulikkumar K. Shah
307 ITR 137 · 2008 · High Court
166
citing judgments

Additions on account of on-money receipts cannot be justified solely based on loose papers or 'sauda-chithis' without evidence of actual payment or a clear indication of a completed transaction within those documents.

CIT v. Gurubachhan Singh J. Juneja
302 ITR 63 · 2008 · High Court
147
citing judgments

When unaccounted receipts or suppressed sales are detected and books of account are rejected under Section 145(3), additions to income must be restricted to the profit element embedded in such transactions, not the entire transaction value. This profit element is to be estimated by considering the assessee's regular profit ratio as per books of account.

CIT v. Shivakami Co. (P.) Ltd.
159 ITR 71 · 1986 · Supreme Court
133
citing judgments

The burden of proving an understatement of consideration or the receipt of 'on-money' lies solely with the Revenue, which must provide cogent evidence of actual receipt of higher consideration, beyond mere estimates or suspicion. Additions cannot be made based on assumptions like differences from circle rates without such evidence.

Man Mohan Sadani v. CIT
304 ITR 52 · 2008 · High Court
132
citing judgments

When assessing income from undisclosed or unrecorded sales, the entire sale proceeds cannot be added to the assessee's income; instead, only the net profit embedded in such unaccounted sales, determined by applying the assessee's net profit rate, should be taxed.

Judgments citing on-money

Rajagopal Saravanan, Chennai vs. ACIT, Central Circle 1(3), Chennai

The appeal stand allowed in terms of our above order

ITA 119/CHNY/2024[2021-22]Status: DisposedITAT Chennai10 Jul 2024AY 2021-22

Bench: Hon’Ble Shri Aby T. Varkey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.119/Chny/2024 (िनधा*रणवष* / Assessment Year: 2021-22) Shri Rajagopal Saravanan Acit बनाम/ C/O. Shri T.N.Seetharaman (Advocate) Central Circle-1(3), 384 (Old No.196) Lloyds Road, Chennai. Vs. Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Amlps-0030-P (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri T.N.Seetharaman (Advocate)-Ld. Ar " थ"कीओरसे/Respondent By : Shri P. Sajit Kumar(Jcit) -Ld. Sr .Dr सुनवाईकीतारीख/Date Of Hearing : 24-06-2024 घोषणाकीतारीख /Date Of Pronouncement : 10-07-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri T.N.Seetharaman (Advocate)-Ld. ARFor Respondent: Shri P. Sajit Kumar(JCIT) -Ld. Sr .DR
Section 143(3)

Assessing Officer [AO] u/s.143(3) of the Act on 23-12-2022. The sole grievance of the assessee is confirmation of addition of alleged on-money of Rs.5 Crores on sale of certain property. The grounds of appeal read as under: - 1. The order of the Commissioner of Income ... involved in the transaction. As is evident, the sole issue that fall for our consideration is to deal with the addition of alleged on-money for Rs.5 Crores on sale of certain property. 2. The Ld. AR advanced arguments and submitted that the additions have been made merely