INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Taxability under section 68 - On-money received from sale of flats constituting business receipts of assessee -

On-money receipts were received by assessee from sale of flats and name of the parties was duly mentioned by AO in the remand report. However, PAN was not mentioned and confirmation from those parties for making payment of on-money to assessee was not available, therefore, AO made addition under section 68. CIT(A) directed on-money receipts to be taxed only as business receipt of assessee. AO challenged this. Held: CIT(A) had, indeed, called for a remand report exclusively in respect of applicability of section 68 on the on-money receipt and since nature and source of credit being on-money receipt received from sale of flats was duly accepted by AO in the remand report, the same would construe only business receipt, and not cash credit under section 68 and, therefore, AO was directed to add only 1% of on-money receipts as undisclosed income of assessee being profit element embedded therein and once profit was sought to be taxed, there could not be any addition that could be made under section 68.

Followed:Bhalchandra Trading Pvt. Ltd., v. Dy. CIT ITA No. 2977 & 2978/Mum/2019 for assessment years 2013-14 and 2014-15, Order dated 25-2-2021 : 2021 TaxPub(DT) 1083 (Mum-Trib).

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2013-14 & 2014-15

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