SURENDRA NARYAN POOJARI, MUMBAI V. ITO WD 20(3)(3), MUMBAI

ITA 1911/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1018 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 20-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2012
• Court: TRIBUNAL
• Department Lawyers: DR A K NAYAK
• Assessee Lawyers: DINKLE HANYA
• Keywords: Business income; Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 1911 /MUM/20 12 (ASSESSMENT YEAR 20 08 - 09 ) MR. SURENDRA NARAYAN POOJARI 81, POOJARI HOUSE MACHHIMAR VERSOVA ANDHERI WEST MUMBAI - 400 061. VS. ITO 20(3)(3) ROOM NO. 521 PIRAMAL CHAMBERS LALGAUG MUMBAI - 400 012. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAEPP0206F ASSESSEE BY MISS DINKLE HANYA DEPARTMENT BY DR. A.K. NAYAK DATE OF HEARING 11 . 4 . 201 7 DATE OF PRONOUNCEMENT 05 . 5 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 13 - 01 - 2012 PASSED BY LD CIT(A) - 31, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2008 - 09. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONF IRMING THE ADDITION OF RS.29,41,423/ - RELATING TO THE BANK DEPOSITS. 2. THE FACTS RELATING TO THE ISSUE ARE DISCUSSED IN BRIEF. THE ASSESSEE IS A COMMISSION AGENT. THOUGH HE HAS PREPARED PROFIT AND LOSS ACCOUNT TO DETERMINE HIS NET PROFIT, YET IT WA S SUBMITTED THAT THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT. THE AO NOTICED THAT THE ASSESSEE HAS MADE DEPOSITS IN TWO BANK ACCOUNTS STANDING IN HIS NAME. WHEN QUESTIONED, THE ASSESSEE SUBMITTED THAT HE WAS ENGAGED IN THE BUSINESS BROKERAGE & PU RCHASE AND SALE OF SECOND HAND VEHICLES. ACCORDINGLY IT WAS SUBMITTED THAT THE DEPOSITS AND WITHDRAWALS MADE IN/FROM THOSE TWO BANK ACCOUNTS WERE RELATED TO THAT BUSINESS ACTIVITIES. THOUGH THE ASSESSEE FURNISHED CERTAIN STATEMENTS TO MR. SURENDRA NARAYAN POOJARI 2 SUPPORT HIS CLAIM, YET HE DID NOT FURNISH ANY DOCUMENTS TO SUBSTANTIATE THE STATEMENT AND HENCE THE AO TOOK THE VIEW THAT THE CREDITS FOUND IN THE BANK ACCOUNT REPRESENTS HIS INCOME FROM UNDISCLOSED SOURCES AND ACCORDINGLY ASSESSED THE ENTIRE DEPOSITS AGGREGATING TO RS.29,41 ,423/ - AS INCOME OF THE ASSESSEE. THE LD CIT(A) AGREED WITH THE VIEW TAKEN BY THE AO, BUT HELD THAT THE ENTIRE DEPOSITS REPRESENT COMMISSION/BROKERAGE RECEIPTS. ACCORDINGLY HE CONFIRMED THE ADDITION AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US . 3. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS FURNISHED CONFIRMATION LETTERS OBTAINED FROM CERTAIN PARTIES TO SUBSTANTIATE HIS CLAIM THAT HE IS ENGAGED IN THE BUSINESS OF BROKERAGE/DEALING IN SECOND HAND VEHICLES. SHE FURTHER SUBMITTED THAT THE AS SESSEE HAS FURNISHED THE DETAILS OF PURCHASE AND SALE OF VEHICLES BY SHOWING THE NAME OF THE PARTIES. HOWEVER, THE AO HAS REJECTED THE SAME WITHOUT EXAMINING THEM BY SIMPLY OBSERVING THAT THE INFORMATION PROVIDED BY THE ASSESSEE WAS INCOMPLETE. SHE SUBMIT TED THAT THE ASSESSEE HAD PROVIDED INFORMATION THAT WERE AVAILABLE WITH HIM AND ANY OTHER INFORMATION, THAT MAY BE REQUIRED BY THE AO, COULD HAVE BEEN FURNISHED, HAD THE AO ASKED SPECIFIC QUERIES. ACCORDINGLY THE LD A.R SUBMITTED THAT THE TAX AUTHORITIES HAVE MADE THE IMPUGNED ADDITION WITHOUT PROPERLY EXAMINING THE EVIDENCES FURNISHED BY THE ASSESSEE AND HENCE THE SAME IS LIABLE TO BE DELETED. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM WITH ANY CRE DIBLE EVIDENCE AND HENCE THE LD CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE AO. 5. WE HEARD THE PARTIES AND PERUSED THE RECORD. ON A PERUSAL OF THE PAPER BOOK FILED BY THE ASSESSEE, WE NOTICE THAT THE ASSESSEE HAS FURNISHED CONFIRMATION LE TTERS OBTAINED FROM CERTAIN PERSONS TO SUBSTANTIATE HIS CLAIM THAT HE IS ALSO ENGAGED IN THE BUSINESS OF BROKERAGE/DEALING IN SECOND HAND VEHICLES. MR. SURENDRA NARAYAN POOJARI 3 THE ASSESSEE HAS ALSO FURNISHED A STATEMENT SHOWING PURCHASE AND SALE OF VEHICLES. WE NOTICE THAT THE AO H AS REJECTED THOSE EVIDENCES BY OBSERVING THAT THEY WERE INCOMPLETE. WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT THE AO COULD HAVE ASKED THE ASSESSEE TO FURNISH FURTHER INFORMATION SO AS TO SATISFY HIM ABOUT THE CLAIM MADE BY THE ASSESSEE. SINCE THE EVIDENCES FILED BY THE ASSESSEE HAS NOT BEEN DISPROVED AND FURTHER SINCE THE ASSESSEE IS ALREADY ENGAGED IN THE AGENCY BUSINESS, IN OUR VIEW, THE CLAIM OF THE ASSESSEE COULD NOT HAVE BEEN REJECTED ALTOGETHER. AT THE SAME TIME, IT IS THE FACT THAT THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT. THE STATEMENT OF PURCHASE AND SALE OF VEHICLES ATTACHED AT PAGE 112 OF THE PAPER BOOK ONLY GIVES THE NAMES OF PARTIES WITHOUT VEHICLE NUMBERS AND THERE WERE NO SUPPORTING DOCUMENTS ALSO. IN THE CAR AGENCY BUS INESS, THE CAR NUMBER IS ONE OF THE IMPORTANT CRITERIA TO IDENTIFY THE VEHICLES. HENCE, IN OUR VIEW, IT CANNOT BE SAID THAT THE ASSESSEE HAS FULLY PROVED HIS CLAIM. UNDER THESE SET OF FACTS, IN OUR VIEW, THE STATEMENT OF COMMISSION INCOME FURNISHED BY TH E ASSESSEE COULD NOT BE RELIED UPON. 6. IN THE PRECEDING PARAGRAPH, WE HAVE HELD THAT THE CLAIM OF THE ASSESSEE THAT HE WAS CARRYING ON BROKERAGE/DEALING IN SECOND HAND VEHICLES COULD NOT BE REJECTED ALTOGETHER. HENCE WE ARE OF THE VIEW THAT ENTIRE DEPOSITS CANNOT BE CONSIDERED TO BE THE INCOME OF THE ASSESSEE. WE HAVE ALSO HELD THAT THE STATEMENT OF COMMISSION INCOME CANNOT BE RELIED UPON. HENCE THE INCOME DECLARED BY THE ASSESSEE CANNOT ALSO BE ACCEPTED. UNDER THESE SET OF FACTS, IN ORDER TO P UT THIS ISSUE AT REST, WE HAVE TO TAKE THE DEPOSITS AS ASSESSEES BUSINESS RECEIPTS AND ESTIMATE THE INCOME THEREON. IN OUR VIEW, THE INCOME THAT COULD HAVE BEEN EARNED BY THE ASSESSEE MAY BE ESTIMATED AT AN AVERAGE RATE OF 10% OF THE AGGREGATE AMOUNT OF DEPOSITS AND IN OUR VIEW, THE SAME WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ESTIMATE 10% OF THE AGGREGATE MR. SURENDRA NARAYAN POOJARI 4 AMOUNT OF DEPOSITS AS INCOME OF THE ASSESSEE FROM DEALING IN SECOND HAND VEHICLES. 7. THE ASSESSEE HAS ALSO RAISED MANY LEGAL GROUNDS. SINCE WE HAVE DISPOSED THE ISSUE URGED ON MERITS, WE DO NOT FIND IT NECESSARY TO ADDRESS THE LEGAL ISSUES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 5 .5 .201 7. SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 5 / 5 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI