Sh. Sanjay Pandey, Farrukhabad V. I.T.O., Ward-2, Farrukhabad

ITA 363/AGR/2011

• Counselvise Citation: 36320314 RSA 2011
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-06-2012
• Assessment Year: misc
• Appeal Filed On: 22-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUHAIL AKHTAR
• Assessee Lawyers: KAMAL KUMAR GUPTA
• Keywords: Business income; Period of limitation
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 351/AGRA/2011 ASSTT. YEAR : 2004-05 INCOME-TAX OFFICER, VS. SHRI SANJAY PANDEY, WARD 2(2) FARRUKHABAD. S/O SHRI SURESH CHAND PA NDEY, 6A/249, AAS VIKAS COLONY, FARRUKHABAD. (PAN : AKYPP 7484 M) ITA NO. 363/AGRA/2011 ASSTT. YEAR : 2004-05 SHRI SANJAY PANDEY, VS. INCOME-TAX OFFICER, S/O SHRI SURESH CHAND PANDEY, WARD 2(2) FARRUKHA BAD. 6A/249, AAS VIKAS COLONY, FARRUKHABAD. (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI SUHAIL AKHTAR, JR. D.R. ASSESSEE BY : SHRI KAMAL KUMAR GUPTA, C.A. DATE OF HEARING : 20.06.2012 DATE OF PRONOUNCEMENT OF ORDER : 22.06.2012 ORDER PER BHAVNESH SAINI, J.M.: BOTH THE CROSS APPEALS BY THE REVENUE AND THE ASSE SSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), GHAZIABAD DATED 20.06.2011 FOR THE ASSESSMENT YEAR 2004- 05. ITA NO. 351 & 363/AGRA/2011 2 2. THE DEPARTMENT HAS FILED THE APPEAL ON THE FOLLO WING GROUNDS : 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.7,51,81 2/- WHILE ACCEPTING THE OTHER OBSERVATIONS OF THE A.O., BUT RESTRICTED THE NET PROFIT TO RS.3,00,000/- STATING THAT ADDITION MADE BY THE A.O . AT RS.10,51,812/- WHILE ACCEPTING THE OTHER OBSERVATIONS OF THE A.O., BUT RESTRICTED THE NET PROFIT TO RS.3,00,000/- STATING THAT ADDITION M ADE BY THE A.O. AT RS.10,51,812/- IS EXCESSIVE AND RESTRICTED TO RS.3, 000/-. HOWEVER, LD. CIT(A) HAS NOT GIVEN ANY LOGICAL EXPLANATION ABOUT RESTRICTING THE NET PROFIT TO RS.3,00,000/-. 2.1 THE ASSESSEE PREFERRED THE APPEAL ON THE FOLLOW ING GROUNDS : 1. THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF T HE CASE THE CIT(A) HAD GROSSLY ERRED IN NOT APPRECIATING THE FA CT THAT M/S. SANJAY PANDEY AND RAJEEV PANDEY ARE SEPARATE AND DISTINCT ENTITIES THAT FROM THE APPELLANT, HAVING SEPARATE PAN NUMBERS, FILING INCOME TAX RETURNS SEPARATELY AND ACCORDINGLY HAD GROSSLY ERRE D IN NOT CANCELING THE ACTION OF THE AO IN CLUBBING THE PURC HASES OF BOTH THE ENTITIES IN THE HANDS OF THE APPELLANT ESTIMATING T HE SALES OF BOTH THE ENTITIES IN THE HANDS OF THE APPELLANT. SUCH ACTION OF THE CIT(A) IN UPHOLDING THE ACTION OF THE AO IS BAD IN LAW, ILLEG AL AND AB INITIO VOID AND IS SUBJECTED TO BE CANCELLED / QUASHED/SET ASID E. 2. WITHOUT PREJUDICE TO THE VALIDITY AND THE LEGAL ITY OF THE ACTION OF THE CIT(A), AS REFERRED TO IN GROUND NO. 1 ABOVE , THE CIT(A) HAD GROSSLY ERRED IN RESTRICTING THE NET PROFIT AT RS.3 ,00,000/- ON MERE SURMISE, CONJECTURES ASSUMPTIONS AND PRESUMPTION. E VEN OTHERWISE AND WITHOUT PREJUDICE, THE SAID ADDITION OF RS.3,00 ,000/- IS HIGHLY EXCESSIVE AND WHOLLY UNREASONABLE. 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. SINCE THE ABOVE GR OUNDS ARE CONNECTED, THEREFORE, THE SAME ARE DECIDED TOGETHER FOR THE PURPOSE OF DI SPOSAL OF BOTH THE APPEALS. THE APPEAL OF THE ASSESSEE IS TIME BARED BY 3 DAYS. THE APPLICATION OF CONDONATION OF ITA NO. 351 & 363/AGRA/2011 3 DELAY IS FILED STATING THEREIN THAT THE COUNSEL FOR THE ASSESSEE MET WITH AN ACCIDENT ON 15.08.2011 AND REMAINED CONFINED TO BED FOR 8 WE EKS I.E., UPTO 15.10.2011. THEREFORE, THE APPEAL COULD NOT BE PREFERRED WITHIN TIME. THE LD. DR HAS NO OBJECTION FOR CONDONING THE NOMINAL DELAY IN FILING THE APPEAL. CONSIDERING THE EXPLANATION OF THE ASSESSEE AND THAT THE LD. DR HAS NO OBJECTION FOR CONDONING THE NOMINAL DELAY, WE ARE SATISFIED THAT THE ASSESSEE H AD A SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. THEREFORE, THE DELAY IN FILING THE APPEAL OF 3 DAYS IS CONDONED. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D RETURN OF INCOME AT RS.95,000/- IN THE STATUS OF INDIVIDUAL. THE CASE W AS SELECTED FOR SCRUTINY AND ACCORDING TO THE OBSERVATIONS IN THE ASSESSMENT ORD ER, THE ASSESSEE DID NOT CO- OPERATE WITH THE AO AT THE INITIAL STAGE OF ASSESSM ENT. THEREFORE, SUMMONS U/S. 131 WAS ISSUED AND IN REPLY THERETO, THE COUNSEL FO R THE ASSESSEE APPEARED AND HE WAS REQUIRED TO FILE EXPLANATION AND DETAILS OF PUR CHASES AND SALES, BILLS/VOUCHERS OF EXPENSES, HOUSEHOLD WITHDRAWALS, DETAILS REGARDI NG LICENSE FEES AND SOURCE OF INVESTMENT THEREOF AND THE DETAILS OF UCO BANK. AGA IN ON THE DATE OF HEARING NOBODY ATTENDED THE PROCEEDINGS BEFORE THE AO AND O N FURTHER NOTICE, THE COUNSEL FOR THE ASSESSEE APPEARED AND HE WAS REQUIRED TO FU RNISH THE RELEVANT DETAILS OF SALES (QUANTITY AND AMOUNT), LICENSE FEES AS PER CE RTIFICATE ISSUED BY THE ITA NO. 351 & 363/AGRA/2011 4 GOVERNMENT AND THE BANK ACCOUNT, DETAILS OF EXPENSE S AND DETAILS OF HOUSEHOLD EXPENSES. AGAIN ON THE DATE FIXED, NOTICE WAS NOT C OMPLIED WITH AND THE ABOVE DETAILS WERE NOT FURNISHED. IN THE MEANTIME SUMMONS U/S. 131 OF THE ACT WERE ISSUED TO M/S. JAISWAL WINE, KANPUR AND M/S. DEEP W INES & AGENCIES PVT. LTD. FOR OBTAINING THE FOLLOWING DETAILS : (I). THE DETAILS OF SALES MADE TO SRI SANJAY PANDE Y DURING F.Y. 2003-04 (II). RATE LIST / MRP FOR F.Y. 2003-04 THE ABOVE PARTIES FURNISHED THE DETAILS OF PURCHASE S WHICH ARE AS UNDER : (I). M/S. DEEP WINES, KANPUR FOR AVAS VIKAS SHOP 1 5,91,565 FOR LAL DARWAJA SHOP 15,94,459 31,86,024 (II). M/S. JAISWAL WINE, KANPUR FOR AVAS VIKAS SHO P 17,55,310 FOR LAL DARWAJA SHOP 18,43,470 35,98,780 4.1 THUS, TOTAL PURCHASES MADE BY THE ASSESSEE FROM THE ABOVE PARTIES COME TO RS.67,84,804/-. FURTHER, STATUTORY NOTICES WERE ISS UED TO THE ASSESSEE AND THE COUNSEL FOR THE ASSESSEE FILED REPLY ALONG WITH PUR CHASE BILLS OF WINE AND COPY OF THE INSURANCE RECEIPTS AND HE WAS FURTHER REQUIRED TO PRODUCE THE DETAILS AS REQUIRED EARLIER. BUT THE ASSESSEE DID NOT AGAIN PRODUCE THE REQUIRED DETAILS. THE AO, THEREFORE, NOTED THAT THE ASSESSEE HAS SHOWN SALES OF RS.39,51,312/- AS AGAINST PURCHASE OF RS.31,31,384/- IN HIS TRADING ACCOUNT. THUS, THE ASSESSEE HAS SHOWN PURCHASE OF RS.31,31,384/- INSTEAD OF PURCHASE OF R S.67,84,804/-. THE LETTER WAS WRITTEN TO THE ASSESSEE TO CLARIFY THE ABOVE POSITI ON AND THE ASSESSEE WAS REQUIRED ITA NO. 351 & 363/AGRA/2011 5 TO GIVE THE EXPLANATION ON THE SAME DETAILS FURNISH ED BY THE ABOVE TWO PARTIES FOR PURCHASES MADE BY THE ASSESSEE AND FURTHER EXPLANAT ION WAS CALLED FOR AS TO WHY THE ASSESSEE HAS NOT SHOWN FULL PURCHASE IN THE TRA DING ACCOUNT AND AS TO WHY RECASTED TRADING ACCOUNT SHOULD NOT BE PREPARED IN THE CASE OF ASSESSEE. NO COMPLIANCE WAS MADE AND FATHER OF THE ASSESSEE MOVE D ADJOURNMENT APPLICATION, WHICH WAS REJECTED BEING IT WAS A TIME BARRING CASE . THE AO ON THE BASIS OF THE DETAILS OF PURCHASES MADE BY THE ASSESSEE FROM THE ABOVE TWO PARTIES, RECASTED THE TRADING ACCOUNT BY TAKING THE PURCHASES AT RS.67,84 ,804/- AND ESTIMATED THE PROPORTIONATE SALES AT RS.85,61,544/- AND BY ALLOWI NG THE EXPENSES ESTIMATED THE NET PROFIT AT RS.10,51,810/-.THE DETAILS OF RECASTE D TRADING AND PROFIT AND LOSS ACCOUNT IS MENTIONED AT PAGE 4 OF THE ASSESSMENT OR DER. ACCORDINGLY, THE INCOME OF THE ASSESSEE WAS COMPUTED AT RS.10,51,810/-. 4.2 THE ASSESSMENT ORDER WAS CHALLENGED BEFORE THE LD. CIT(A) AND WRITTEN SUBMISSIONS OF THE ASSESSEE IS REPRODUCED IN THE AP PELLATE ORDER AND THE GIST OF THE SUBMISSIONS OF THE ASSESSEE BEFORE THE LD. CIT(A) H AD BEEN THAT THE AO HAS WRONGLY CLUBBED THE PURCHASES OF ASSESSEE AND SEPAR ATE LICENSEES M/S. SANJAY PANDEY AND RAJEEV KUMAR PANDEY, WHO WERE DOING THE SAME BUSINESS IN THE PREMISES AT AVAS VIKAS COLONY. IT WAS STATED THAT T HE ASSESSEE IS DOING BUSINESS ONLY AT LAL DARWAJA, FARRUKHABAD. THEREFORE, THE PU RCHASES OF BOTH THE PERSONS ITA NO. 351 & 363/AGRA/2011 6 SHOULD NOT BE TAKEN TOGETHER AND, THEREFORE, ESTIMA TE OF SALES IS UNJUSTIFIED. IT WAS SUBMITTED THAT THE ASSESSEE IS DOING PROPRIETARY BU SINESS AND M/S. SANJAY PANDEY AND RAJEEV KUMAR PANDEY ARE DOING BUSINESS AS AOP A ND THE ASSESSEE IS ONE OF THE MEMBER OF AOP. IT WAS EXPLAINED THAT THE DETAIL S COULD NOT BE FURNISHED BEFORE THE AO DUE TO NON-APPEARANCE OF ASSESSEES COUNSEL ON SEVERAL HEARING BECAUSE OF THE SERIOUS ILLNESS OF THE ASSESSEE. THE ASSESSEE I N ORDER TO PROVE THAT HE WAS DOING BUSINESS ONLY AT LAL DARWAJA SHOP, FURNISHED COPY O F THE ALLOTMENT LETTER ISSUED BY THE DISTRICT MAGISTRATE, FARRUKHABAD, APPLICATION F OR PAYMENT OF LICENSE FEE, RENEWAL OF LICENSE AND COPY OF INSURANCE POLICY OF THE SHOP SITUATED AT LAL DARWAJA, FARRUKHABAD. IN RESPECT OF THE SHOP OF AOP AT AVAS VIKAS COLONY, THE ASSESSEE FURNISHED COPY OF PAYMENT OF LICENSE FEES, PAN, CERTIFICATE FROM THE BANK SHOWING BANK ACCOUNT MAINTAINED BY AOP AND INSURANC E POLICY. IT WAS, THEREFORE, SUBMITTED THAT THE PURCHASE OF TWO CONCERNS OF INDI VIDUAL AND AOP SHOULD NOT BE TAKEN TOGETHER. COPY OF ACKNOWLEDGEMENT OF FILING O F RETURN OF AOP FOR SUBSEQUENT ASSESSMENT YEAR 2005-06 WAS ALSO FILED. THE ASSESSEE, THEREFORE, PRAYED THAT THE ESTIMATE ON THE BASIS OF PURCHASE OF AOP S HOULD BE EXCLUDED FOR ESTIMATING THE PROFIT. THE MATTER WAS REMANDED BY T HE LD. CIT(A) TO THE AO WHO SUBMITTED HIS REPORT DATED 19.02.2008, WHICH IS ALS O INCORPORATED IN THE APPELLATE ORDER, IN WHICH THE AO REITERATED THE STAND TAKEN I N THE ASSESSMENT ORDER AND IT WAS FURTHER EXPLAINED THAT INFORMATION OF U.P. EXCISE I NSPECTOR, FARRUKHABAD IN RESPECT ITA NO. 351 & 363/AGRA/2011 7 OF THE LICENSE FEE PAID BY THE ASSESSEE WAS ALSO CA LLED FOR. THE INSPECTORS REPORT WAS PLACED ON RECORD. AS PER REPLY, THE ASSESSEE HA S PAID RS.3,00,000/- EACH AS LICENSE FEES FOR AVAS VIKAS SHOP AND LAL DARWAJA SH OP RESPECTIVELY FOR THE F.Y. 2003-04 RELEVANT TO THE ASSESSMENT YEAR UNDER APPEA L. IT WAS MENTIONED IN THE REMAND REPORT THAT THE ASSESSEE HAS ALSO CLAIMED TH E LICENSE FEES OF RS.6,00,300/- IN THE PROFIT AND LOSS ACCOUNT SUBMITTED BEFORE ARR IVING AT THE PROFIT OF RS.10,51,812/-. IT WAS, THEREFORE, MADE CLEAR THAT THE ASSESSEE WAS OWNER OF BOTH THE SHOPS, I.E., AVAS VIKAS COLONY SHOP AND LAL DAR WAJA SHOP. THEREFORE, THE PURCHASES OF BOTH THE CONCERNS HAVE BEEN RIGHTLY TA KEN INTO CONSIDERATION IN THE CASE OF THE ASSESSEE. THE AO HAS ALSO EMPHASIZED TH AT DURING THE ASSESSMENT PROCEEDINGS, NOWHERE, THE ASSESSEE HAS CLAIMED THAT HE WAS OWNER OF LAL DARWAJA SHOP ONLY IN THE STATUS OF INDIVIDUAL. IT WAS FURTH ER EXPLAINED IN THE REMAND REPORT THAT REPLY OF THE ASSESSEE THAT HE WAS MEMBER OF AO P ONLY IS AFTER THOUGHT BECAUSE THE RETURN OF AOP WAS FILED FOR THE FIRST TIME FOR SUBSEQUENT ASSESSMENT YEAR 2005- 06 ON 31.01.2007 AFTER COMPLETION OF ASSESSMENT IN THE CASE OF THE ASSESSEE. IT WAS, THEREFORE, SUBMITTED BY THE AO THAT PURCHASES OF BO TH THE CONCERNS HAVE BEEN RIGHTLY TAKEN INTO CONSIDERATION IN THE CASE OF ASS ESSEE. THE ASSESSEE FILED REJOINDER TO THE REMAND REPORT OF THE AO, BUT AS REGARDS PARA 2 OF PAGE 1 OF THE REMAND REPORT, THE ASSESSEE DID NOT SAY ANYTHING BECAUSE I T WAS A MATTER OF RECORD OF THE AO. THE ASSESSEE REITERATED THE SAME FACTS IN RESPE CT OF AOP IN THE REJOINDER AND ITA NO. 351 & 363/AGRA/2011 8 PRAYED THAT THERE IS A MISTAKE IN TAKING TOTAL PURC HASES OF BOTH THE CONCERNS AND THAT EXPENSES OF AOP SHOULD BE ALLOWED AS DEDUCTION . 4.3 THE LD. CIT(A), CONSIDERING THE EXPLANATION OF THE ASSESSEE IN THE LIGHT OF THE REMAND REPORT OF THE AO AND THE MATERIAL ON REC ORD, RESTRICTED THE COMPUTATION OF INCOME AT RS.3,00,000/- AND GRANTED RELIEF TO TH E ASSESSEE IN A SUM OF RS.7,51,812/-. THE FINDINGS OF THE LD. CIT(A) IN TH E IMPUGNED ORDER IN PARA 6 TO 7 ARE REPRODUCED AS UNDER : 6. AFTER HAVING CAREFULLY CONSIDERED APPELLANT'S S UBMISSIONS AND ALSO THE FACTS BROUGHT OUT BY THE AO IN THE ASS ESSMENT ORDER AS WELL AS IN THE REMAND REPORT, MY CONCLUSIONS/OBSERV ATIONS ARE AS UNDER: 6.1. I FIND THAT ALL THE ISSUES RAISED BY VARIOUS G ROUNDS OF APPEAL ARE INTERRELATED, AND, HENCE, ALL THE GROUND S OF APPEAL ARE BEING ADJUDICATED TOGETHER. 6.2. WHETHER THERE ARE TWO SEPARATE ENTITIES?: ON THIS ISSUE, THE APPELLANT IS FOUND TO BE ON A WE AK FOOTING. THE APPELLANT'S CONTENTION THAT BUSINESS AT AWAS VI KAS COLONY IS A SEPARATE ENTITY, NAMELY M/S. SANJAY PANDEY AND RAJE EV KUMAR PANDEY AOP; IS AN AFTER-THOUGHT. THIS IS BECAUSE WH EN I ASKED THE COUNSEL TO FURNISH THE ALLOTMENT LETTER OF DM IN RE SPECT OF BUSINESS AT LAL DARWAJA (AS THERE IS A SIMILAR ALLOTMENT LETTER FOR SHOP AT AWAS VIKAS COLONY), THE APPELLANT WAS UNABLE TO DO SO. T HE APPELLANT MERELY FURNISHED A COPY OF ALLEGED APPLICATION FORM FOR SUCH BUSINESS; BUT, IT IS IMPORTANT TO NOTE, THAT EVEN T HE ORIGINAL OF SUCH ALLEGED APPLICATION FORM COULD NOT BE FURNISHED. ITA NO. 351 & 363/AGRA/2011 9 CONCLUSION IS OBVIOUS. ALTHOUGH THERE MAY BE A TAX ENTITY IN NAME OF SANJAY PANDEY AND RAJIV KUMAR PANDEY (HAVIN G PAN, INSURANCE & EVEN I.T. RETURN); ALL THESE WERE CONCO CTED AND TRIED-TO- BE-CORRELATED, ONLY AFTER APPELLANT WAS CAUGHT ON W RONG FOOT DURING ASSESSMENT PROCEEDINGS. THESE EVIDENCES ARE DATED A FTER THE ASSESSMENT WAS FINALIZED. SO, I HOLD THAT APPELLANT WAS RUNNING BUSINESS AT L AL DARWAJA, IN HIS PROPRIETARY CAPACITY, BUT TRIED TO HIDE IT T ILL ENQUIRY U/S 133(6) REVEALED THE TRUTH. NEITHER THERE IS ONLY APPLICATI ON IN NAME OF SUCH AOP, NOR ANY FINAL ALLOTMENT LETTER OF DM IS THERE, AS TO SHOW THAT ALLOTMENT WAS MADE, NOT TO APPELLANT INDIVIDUAL, BU T TO AN AOP, HAVING APPELLANT AS A PARTNER/CO-OWNER. 6.3. IS AO CORRECT IN ADDING AND ESTIMATING THE BUS INESS OF TWO SHOPS? CONSIDERING THAT BOTH THE SHOPS WERE OPERATED/OWNED BY ASSESSEE, AND CONSIDERING THAT APPELLANT FAILED TO FURNISH RELEVANT DETAILS, AS REQUIRED BY AO. THUS, IN PRINCIPAL, AO WAS FULLY JUSTIFIED IN ESTIMATING AND ADDING THE TWO SHOPS BUSINESS AC TIVITIES AND PROFITS. 6.4. BUT IS ESTIMATION JUSTIFIED ? HOWEVER, I DO FIND LOT OF SUBSTANCE IN APPELLANTS CONTENTION THAT (A) THERE ARE CERTAIN TYPING ERRORS IN SALE FIGURES RS. 15,94,459 (PAGE 2 OF ASSESSMENT ORDER) VERSUS RS. 10,03,606/-(PAGE 3 OF ASSESSMENT ORDER) FOR LAL DARWAJA SHOP; (B) THE REPLY LETTER OF M/S DEEP WINES, KANPUR GIVE A SALE FIGURE OR RS. 15,18,908/-, IN PLACE OF RS. 15,91,564/- FOR AW AS VIKAS SHOP; (C) THE PROPORTIONATE EXTRAPOLATION OF PURCHASE-TO- SALE FIGURE (RS. 67,84,800/- TO RS. 85,61,544/-) IS NOT VERY RATIONA L. (D) NO DEDUCTION FOR EXPENSES FOR AWAS VIKAS SHOP ( EXCEPT FOR RS. 3 LAKH OF LICENSE FEE) WAS GIVEN BY AO. ITA NO. 351 & 363/AGRA/2011 10 6.5 THUS, I FIND THAT ALTHOUGH APPELLANT FAILED IN PRODUCING BOOKS/ACCOUNTS FOR AWAS VIKAS SHOP; STILL AO SHOULD HAVE ALLOWED A REASONABLE DEDUCTION FOR EXPENSES, ON ESTIMATE BASI S, FOR AWAS VIKAS SHOP ALSO. IN FACT, IN SUCH A CASE, AO SHOULD HAVE SIMPLY, AFT ER REJECTING BOOK RESULTS; ESTIMATED AND APPLIED A REASONABLE N. P. TO THE KNOWN FIGURE OF PURCHASES. N.P FOR LAL DARWAJA SHOP WAS DECLARED, AND ACCEPTED ALSO BY AO, AT RS. 95,000/- ON PURCHASE OF RS. 31,31,384/- ON PROPORTIONATE BASIS, N.P. ON PURCHASES FOR TWO SHOPS, WORKED OUT BY AO AT RS. 67,84,804/- WOULD BE RS. 2,05,837/- BUT CONSIDERING THAT APPELLANT HAS FAILED IN PRODUC ING ACCOUNTS OF AWAS VIKAS SHOP; RATHER APPELLANT WAS TRYING TO HIDE IT ALTOGETHER; I HOLD THAT A REASONABLE ESTIMATE OF TOTAL N.P WOUL D BE RS. 3,00,000/-. THUS, ESTIMATED ADDITION, MADE BY AO AT RS, 10,51,8 12/- IS CONSIDERED EXCESSIVE, AND IS RESTRICTED/REDUCED TO RS. 3,00,000/-. (RELIEF RS.7,51,812/-) THE ABOVE TAKES CARE OF ALL GROUNDS OF APPEAL. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. 4.4 BOTH THE PARTIES ARE IN APPEALS ON THE ABOVE GR OUNDS WHEREBY THE REVENUE CHALLENGED THE REDUCTION OF BUSINESS INCOME AND THE ASSESSEE SEEKS DELETION OF ADDITION ON ACCOUNT OF ESTIMATION OF PROFIT. 5. THE LD. DR RELIED UPON THE ORDER OF THE AO. ON T HE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT AOP WAS ASSESSED BY REVENU E DEPARTMENT SEPARATELY. ITA NO. 351 & 363/AGRA/2011 11 THEREFORE, CLUBBING OF PURCHASES OF BOTH THE CONCER NS IN THE HANDS OF THE ASSESSEE IS UNJUSTIFIED AND THE ADDITIONS SHOULD BE DELETED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT THE AS SESSEE DID NOT COMPLY WITH THE STATUTORY NOTICES BEFORE THE AO ON SEVERAL OCCASION S. THE ASSESSEE DID NOT FURNISH COMPLETE DETAILS OF PURCHASE AND SALES AND OTHER DE TAILS CALLED FOR BY THE AO. THE AO, THEREFORE, CALLED FOR THE DETAILS OF THE PURCHA SES MADE BY THE ASSESSEE FROM TWO PARTIES, M/S. DEEP WINES AND JAISWAL WINES KANP UR AND THEY HAVE AFFIRMED THAT THE ASSESSEE MADE PURCHASES FROM THEM IN A SUM OF RS.67,84,804/- DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR. COM PLETE DETAILS WERE CALLED FOR FROM THE ASSESSEE BY CONFRONTING THE DETAILS OBTAIN ED FROM THESE PARTIES, BUT THE ASSESSEE DID NOT MAKE ANY COMPLIANCE TO THE STATUTO RY NOTICES. HOWEVER, IT WAS FOUND THAT THERE WAS A MISTAKE IN TOTAL PURCHASE BE CAUSE THE TOTAL PURCHASES ARE IN A SUM OF RS.61,93,951/- INSTEAD OF RS.67,84,804/-. TH E AO, ACCORDINGLY, PROPORTIONATELY ESTIMATED THE SALES BY RECASTING TH E TRADING AND PROFIT AND LOSS ACCOUNT. THE ASSESSEE CLAIMED IN THE PROFIT AND LOS S ACCOUNT, PAYMENT OF LICENSE FEES OF RS.6,00,000/- WHICH WAS PAID FOR BOTH THE C ONCERNS. THE REPORT OF THE EXCISE INSPECTOR WAS ALSO OBTAINED TO THE SAME EFFE CT, IN WHICH IT WAS CONFIRMED THAT THE ASSESSEE HAS PAID RS.3,00,000/- EACH AS LI CENSE FEES FOR AVAS VIKAS SHOP ITA NO. 351 & 363/AGRA/2011 12 AND LAL DARWAJA SHOP FOR THE ASSESSMENT YEAR UNDER APPEALS. THE ASSESSEE ALSO CLAIMED DEDUCTION OF TOTAL LICENSE FEES OF BOTH THE CONCERNS IN THE PROFIT AND LOSS ACCOUNT. THEREFORE, FROM THE CONDUCT OF THE ASSESSE E, IT WAS CLEAR THAT THE ASSESSEE HAS SHOWN OWNERSHIP ON BOTH THE SHOPS IN QUESTION. WHEN THE ASSESSEE WAS CONFRONTED OF THE FACT AND WAS CALLED UPON TO FILE REJOINDER TO THE REMAND REPORT, THE ASSESSEE DID NOT SAY ANYTHING AND STATED THAT I T IS A MATTER OF RECORD OF THE AO. THE ASSESSEE FURTHER CLAIMED THAT M/S. SANJAY DUBEY AND RAJEEV KUMAR DUBEY AOP IS ASSESSED SEPARATELY BY THE REVENUE DEPARTMEN T. IT WAS FOUND AFTERTHOUGHT BECAUSE NO RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL WAS FILED FOR AOP. THE RETURN OF AOP WAS FILED FOR THE FIRST TIME FOR SUBSEQUENT ASSESSMENT YEAR 2005-06 ON 31.01.2007 AFTER COMPLETION OF ASSE SSMENT IN THE CASE OF ASSESSEE ON 28.12.2006. THUS, NO RELIANCE CAN BE PLACED IN T HE ASSESSMENT YEAR UNDER APPEAL THAT ANY VALID AOP EXISTS AS CLAIMED BY THE ASSESSE E. WHEN THE ABOVE FACTS WERE CONFRONTED TO THE ASSESSEE AT THE ASSESSMENT STAGE, THE ASSESSEE DID NOT SAY ANYTHING. EVEN NOTHING WAS STATED AT THE APPELLATE STAGE. THE LD. CIT(A) CALLED FOR THE ALLOTMENT LETTER OF D.M. IN RESPECT OF BUSINESS AT LAL DARWAJA. THE SAME WAS FILED, BUT THE ALLOTMENT LETTER OF D.M. IN RESPECT OF SHOP AT AVAS VIKAS COLONY WAS NOT FILED. SAME IS THE POSITION BEFORE US, AS THE ASSESSEE DID NOT FILE ANY PAPER BOOK BEFORE US AND NO DOCUMENTARY EVIDENCE HAS BEEN FILED IN SUPPORT OF ANY OF THE CONTENTIONS. THE LD. CIT(A) WAS, THEREFORE, JUS TIFIED IN UPHOLDING AND ITA NO. 351 & 363/AGRA/2011 13 CONFIRMING THE ORDER OF THE AO THAT BOTH THE SHOPS WERE OPERATED AND OWNED BY THE ASSESSEE AND AS SUCH, ESTIMATE OF PROFIT OF BOT H THE CONCERNS IN THE HANDS OF THE ASSESSEE WAS JUSTIFIED. THE LD. CIT(A) HAS ALREADY TAKEN CARE OF TYPING ERROR IN TAKING THE FIGURE OF PURCHASES. THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER RECORDS OF AVAS VIKAS COLON SHOP. THEREFO RE, ESTIMATE OF INCOME WAS JUSTIFIED IN THE MATTER. THE LD. CIT(A), CONSIDERIN G THE TOTALITY OF FACTS AND CIRCUMSTANCES, RIGHTLY ESTIMATED THE FIGURE OF NET PROFIT AT RS.3,00,000/-, WHICH WAS IN PROPORTION TO THE INCOME DECLARED BY THE ASS ESSEE IN THE RETURN OF INCOME ON THE BASIS OF DECLARED PURCHASES. SINCE NO RECORDS O F AVAS VIKAS COLONY SHOP WAS PRODUCED, THEREFORE, ESTIMATE OF INCOME AT RS.3,00, 000/- IS JUSTIFIED IN THE MATTER EVEN IF THERE WAS A TYPING MISTAKE IN TAKING THE VA LUE OF PURCHASES. HONBLE SUPREME COURT IN THE CASE OF CIT VS SHRI DURGA PRAS AD MORE 82 ITR 540 AND IN THE CASE OF SMT. SUMATI DAYAL VS CIT 214 ITR 801 HE LD HELD THAT THE COURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCES BEFORE THEM B Y APPLYING THE TEST OF HUMAN PROBABILITIES AFTER CONSIDERING THE SURROUNDING CIR CUMSTANCES. CONSIDERING THE FACTS AND CIRCUMSTANCES AND THE MATERIAL BROUGHT ON RECORD BY THE AO, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A), PARTICULARLY WHEN THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE EI THER BEFORE THE AUTHORITIES BELOW OR BEFORE THE TRIBUNAL. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN PROPORT IONATELY ESTIMATING THE BUSINESS ITA NO. 351 & 363/AGRA/2011 14 INCOME OF THE ASSESSEE. AS A RESULT, BOTH THE APPEA LS HAVE NO MERITS AND ARE, ACCORDINGLY, DISMISSED. 7. IN THE RESULT, BOTH THE CROSS-APPEALS OF THE REV ENUE AND ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY