On-Money not found Credited in Books of Account during Search proceedings can't be brought to Tax: ITAT

The Income Tax Appellate Tribunal (ITAT) Mumbai has ruled that On-money that is not found credited in the books of account during search proceedings but in loose sheets cannot be brought to tax.

The assessee company is engaged in the business of a builder and developer had filed its original return of income for A.Y. 2013-14 on 30.09.2013, declaring a total income of 16,53,43,100/-. The grievance of the revenue was that the Commissioner of Income Tax (Appeals) CIT(A) had erred in concluding that as the amount of on-money was not found credited in the books of account of the assessee but was found noted on some loose sheets and in the data retrieved from the mobile phones in the course of the search proceedings and therefore, it could not have been brought to tax u/s 68 of the Act.

Judicial member Ravish Sood and Accountant Member S. Rifaur Rahman while dismissing the appeal by the revenue in this multiple cross appeals held, “ As the facts and issue involved in the present appeal of the captioned assessee remains the same, therefore, our order passed in context of the issue in question while disposing off the revenue‟s appeal in the case of M/s Ekta Housing Pvt. Ltd. in ITA No. 2186/Mum/2018 in A.Y 2016-17 shall apply mutatis mutandis for disposing off the issue in hand. Accordingly, on the same terms and reasoning we uphold the order of the CIT(A) to the extent she had concluded that the impugned addition of on-money could not have been made u/s 68 of the Act.”

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