Shri Madanlal L.Chandak(Shah), Sabarkantha V. The ACIT.,Cent.Circle-1(1), Ahmedabad

CO 205/AHD/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9516 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Section: 145

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) IT(SS)A NO.423 TO 425/AHD/2012 WITH CO NO.205 TO 207/AHD/2012 [ASSTT.YEAR : 2007-2008, 2008-2009 AND 2009-2010] ACIT, CENT.CIR.1(1) AHMEDABAD. /VS. MADANLAL L. CHANDAK (SHAH) 3248, SHANTINAGAR SOCIETY MODASA ROAD, DIST. SABARKANTHA, TALOD 382 215. PAN : AABCM 0644 E ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI O.P. VAISHNAV, CIT-DR 4& 1 2 )/ ASSESSEE BY : NONE 5 1 &(*/ DATE OF HEARING : 1 ST APRIL, 2014 678 1 &(*/ DATE OF PRONOUNCEMENT : 02-05-2014 )9 / O R D E R PER BENCH: THESE THREE APPEALS BY THE REVENUE AND THREE COS. B Y THE ASSESSEE FOR THE ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10 ARE DIRECTED AGAINST THE ORDER OF THE CIT(A). THESE ARE BEING D ISPOSED WITH THIS CONSOLIDATED ORDER. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE, NOR APPLICATION FOR SEEKING ADJOURNMENT OF THE CASE WAS FILED. ON THE EARLIER DATE OF HEARING ON 12/2/2014 ALSO NONE APPEARED ON BEHALF O F THE ASSESSEE. IN THESE IT(SS)A NO.423 TO 425/AHD/2012 WITH 3 COS. -2- CIRCUMSTANCES, WE PROCEED TO DECIDE THE APPEALS PRE FERRED BY THE REVENUE AND THE COS. PREFERRED BY THE ASSESSEE EXPARTE QUA THE ASSESSEE ON MERIT, AFTER HEARING THE LEARNED DR. 3. THE IDENTICAL GROUNDS OF THESE THREE APPEALS OF THE REVENUE ARE AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,06,852/- (A.Y.2007-08), RS.33,89,890 (A.Y.2 008-09) AND RS.3,69,815 (A.Y.2009-10) MADE ON ACCOUNT OF COMMIS SION INCOME FOR ARRANGING BOGUS BILLS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ENTIRE ADDITION OF RS.8,13,705/- (A.Y.2007-08), RS.67,79,781/- (A.Y.2008-09) AND RS. 7,39,631/- (A.Y.2009-10) IDENTICAL GROUNDS OF THE COS. OF THE ASSESSEE FOR THREE ASSESSMENT YEARS ARE AS UNDER: 1. THE LD.AO HAS GROSSLY ERRED IN ESTIMATING COMMI SSION INCOME OF RS.8,13,705/- (A.Y.2007-08), RS.67,79,781/- (A.Y.20 08-09) AND RS.7,39,631/- (A.Y.2009-10) WITHOUT ADDUCING ANY EV IDENCE ON RECORD AND LEARNED CIT(A) HAS GROSSLY ERRED IN OVERLOOKING THE FACT THAT THERE ARE NO EVIDENCE THAT CAN JUSTIFY ANY ADDITION TO RE TURNED INCOME OF THE ASSESSEE. 2. THE LD.AO HAS GROSSLY ERRED IN REJECTING BOOK RE SULTS OF ASSESSEE WITHOUT INVOKING PROVISIONS OF SECTION 145 OF THE A CT. LD. CIT(A) HAS ERRED IN REJECTING BOOK RESULT AND ESTIMATING INCOM E OF RS.4,06,852/- (A.Y.2007-08), RS.33,89,890/- (A.Y.2008-09) AND RS .3,69,815/- (A.Y.2009-10) MUST BE DELETED. 4. THE LEARNED CIT-DR SUBMITTED THAT THE ASSESSEE W AS IN THE ACTIVITY OF ARRANGING BOGUS BILLS, AND THAT WAS DETECTED AS A R ESULT OF SEARCH AT THE PREMISES OF ONE M/S.VISHAL TRADERS (PROPRIETOR SHRI DHARME NDRA PANDYA). THE ASSESSEE HAS ADMITTED IN HIS STATEMENT THAT HE HAD INTRODUCED VARIOUS PARTIES TO VISHAL TRADERS AND THE PROPRIETOR OF VISHAL TRADERS HAS ALSO GIVEN STATEMENT IMPLICATING THE ASSESSEE IN BOGUS BILLING. THE ASS ESSEE WAS IN THE BUSINESS OF EARNING COMMISSION INCOME ON ARRANGING BOGUS BILLS AND WAS NOT DOING ANY IT(SS)A NO.423 TO 425/AHD/2012 WITH 3 COS. -3- CHARITY IN ARRANGING THE BOGUS BILLS FOR OTHER PART IES, AND THE AO WAS JUSTIFIED IN ESTIMATING THE COMMISSION INCOME AT 2% OF THE BILL AMOUNT. HE SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE ADD ITION ON ACCOUNT OF COMMISSION INCOME AT 1% OF THE TOTAL AMOUNT AGAINST 2% ESTIMATED BY THE AO. HE RELIED ON THE ORDER OF THE AO. 5. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND HAVE PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSEE WAS IN THE ACTIVITY OF ARRANGING BOGUS BILLS FOR CERTAIN PARTIES, AND H E HAS ALSO ADMITTED THIS FACT IN HIS STATEMENT GIVEN TO THE DEPARTMENT. IT IS FURTH ER CORROBORATED WITH THE STATEMENT RECORDED BY THE DEPARTMENT OF SHRI DHARME NDRA PANDYA, PROPRIETOR OF VISHAL TRADERS. THE ASSESSEE IS AN INDIVIDUAL A ND WAS NOT FILING ANY RETURN OF INCOME CLAIMING THAT HE HAS NO TAXABLE INCOME. THE CLAIM OF THE ASSESSEE BEFORE THE REVENUE AUTHORITIES WAS THAT NO INCRIMIN ATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE ASSESSEE HAS ALSO CLAIMED THAT NO INVESTMENT IN MOVABLE AND IMMOVABLE PROPERTIES WAS FOUND BY THE D EPARTMENT, AS A RESULT OF SEARCH. THE ASSESSEE CLAIMED THAT HE HAS NOT ISSUE D ANY BOGUS BILLS TO ANY PARTY AND NO CASH WAS FOUND OR SEIZED AT THE TIME OF SEAR CH, AND THAT NO BANK ACCOUNT WAS MAINTAINED BY THE ASSESSEE, AND NOTHING WAS FOU ND DURING THE COURSE OF SEARCH. HOWEVER, WE FIND THAT THE CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE HAS INTRODUCED SHRI DHARMENDRA PANDYA, PROPRIETOR O F VISHAL TRADERS TO VARIOUS PARTIES. WE FIND FORCE IN THE FINDINGS OF THE CIT( A) THAT THE ASSESSEE WAS IN THE BUSINESS OF EARNING COMMISSION INCOME AND THE ASSES SEE MUST HAVE EARNED COMMISSION FROM M/S.VISHAL TRADERS ALSO. ACCORDING LY, WE FIND THAT THE DEPARTMENT WAS JUSTIFIED IN ASSUMING THAT THE ASSES SEE MUST HAVE EARNED CERTAIN COMMISSION INCOME FROM HIS BUSINESS OF ARRANGING BO GUS BILLS. HOWEVER, IN OUR OPINION, NO INCRIMINATING MATERIAL WAS FOUND EV EN AFTER THE CONDUCT OF THE SEARCH OPERATION AT THE PREMISES OF THE ASSESSEE IN THE FORM OF BILLS OR BANK ACCOUNT, OR PROPERTY DOCUMENTS OR INVESTMENT IN MOV ABLE AND IMMOVABLE PROPERTIES, EITHER ON HIS OWN NAME OR IN THE NAME O F ANY HIS FAMILY MEMBERS, AND ONCE THE DEPARTMENT COULD NOT PLACE ANY MATERIA L ON RECORD, EVEN AFTER THE IT(SS)A NO.423 TO 425/AHD/2012 WITH 3 COS. -4- COMPLETION OF SEARCH OPERATION, SUGGESTING ANY MOVA BLE OR IMMOVABLE ASSETS OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE ENDS OF J USTICE SHALL BE MET, IF THE ADDITION IS RESTRICTED TO RS.2,00,000 (RS.TWO LAKHS ) AGAINST RS.4,06,852/- SUSTAINED BY THE CIT(A) FOR ASSTT.YEAR 2007-08, RS. 17,00,000/- (RUPEES SEVENTEEN LAKHS) AGAINST RS.33,89,891/- SUSTAINED B Y THE CIT(A) FOR ASSTT.YEAR 2008-09 AND RS.2,00,000/- (RUPEES TWO LAKHS) AS AGA INST RS.3,69,815/- SUSTAINED BY THE CIT(A) FOR THE ASSTT.YEAR 2009-10, AND ACCORDINGLY, THE GROUNDS OF THE APPEAL OF THE REVENUE BEING WITHOUT ANY MERIT ARE DISMISSED, AND THE GROUNDS OF THE COS OF THE ASSESSEE ARE PART LY ALLOWED. 6. IN THE RESULT, THREE APPEALS OF THE REVENUE ARE DISMISSED AND THREE COS. PREFERRED BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD