KALURAM MALI, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(4), MUMBAI

ITA 392/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7405 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMLATAHA
• Keywords: Income from undisclosed sources; Document seized; Documents seized
• Section: 132

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM & SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO . 392 /MUM/201 8 ( / ASSESSMENT YEAR: 2013 - 14 ) KALURAM MALI 94, 4 TH FLOOR, 22 - 24, ANANTWADI, BHULESHWAR, M UMBAI - 400002 / VS. DCIT CEN CIR 2(4 ), 1007, 10 TH FLOOR, PRATISTHANBHAVAN, M. K. ROAD, MUMBAI - 400020 ./ ./ PAN/GIR NO. AHTPM5888L ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : MS. N. HEMLATAHA , DR / DATE OF HEARING : 17 /0 4 /201 8 / DATE OF PRONOUNCEMENT : 01/05/2018 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 48 , MUMBAI, DATED 13.10.17 FOR AY 200 7 - 08 TO 2013 - 14. 2 I.T.A. NO. 392 /MUM/201 8 K ALURAM MALI 2 . AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF SEVERAL CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED . ON THE OTHER HAND L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. AS PER THE FACTS OF THE PRESENT CASE, A SEARCH & SEIZURE OPERATIONS U/S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED IN THE CASE OF SHRI SHIVRAM MALI (ALIAS BAHULAL MALI) ON 08 - 11 - 2012 BY ADIT (INV.), UNIT - V, MURNBAI IN CONNECTION WITH SEARCH & SEIZURE ACTION SIMULTANEOUSLY CARRIED OUT IN THE CASE OF M/S GOLD SUKH SAFETY VAULTS LIMITED. M/S GOLD SUKH SAFETY VAULTS LIMITED IS INVOLVED IN THE BUSINESS OF PROVIDING LOCKERS ON RENT. IT WAS FOUND THAT M/S GOLD SUKH SAFETY VAULTS LTD, WASPROVIDING LOC KERS WITHOUT VERIFICATION OF KYC DETAILS. USUALLY THE LOCKER WAS ASSIGNED IN THE NAME OF FIRST HOLDER AND HIS KYC DETAILS WERE KEPT ON RECORD BY THE COMPANY. HOWEVER, THE LOCKER COULD BE OPERATED BY THREE MORE PERSONS BY INCORPORATING THEIR NAMES ON THE AG REEMENT. NO KYC DETAILS 3 I.T.A. NO. 392 /MUM/201 8 K ALURAM MALI WERE SOUGHT FOR THESE ADDITIONAL OPERATORS OF THE LOCKER. IT WAS SUBSEQUENTLY OBSERVED THAT A NUMBER OF LOCKERS HAD BEEN GIVEN ON RENT TO HAWALA OPERATORS INVOLVED IN ILLEGAL TRANSFER OF CASH. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES DISMISSED THE APPEAL OF THE ASSESSEE. NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1 & 2 4 . SINCE BOTH THE GROUNDS RAISED BY THE ASSESSEE ARE INTER - CONNECTED AND INTER RELATED AND RELATES TO CHALLENGING THE ORDER OF LD. CI T(A) IN MAKING ADDITION OF RS. 8,42,421 ON ACCOUNT OF ALLEGED UNDISCLOSED COMMISSION INCOME, THEREFORE WE THOUGHT IT FIT TO DISPOSE OF THE SAME BY THIS COMMON ORDER. 5. WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. 4 I.T.A. NO. 392 /MUM/201 8 K ALURAM MALI BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROU NDS RAISE D BY THE ASSESSEE IN ITS DETAILED ORDER. THE OPERATIVE PORTION OF THE ORDER OF LD. CI T(A) IS CON T AINED IN PARA NO. (I) TO (IV) OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - GROUND NOS. I & 2: THESE GROUNDS ARE INTERLINKED AND ARE RELATED TO COMPUTATION OF TOTAL INCOME FOR DIFFERENT YEARS. FOR THE A.Y. 2013 - 14, ASSESSEE HAS AGITATED FOR ASSESSMENT OF INCOME AT RS.15,82,421/ - INSTEAD OF RS.9,94,167/ - . THUS, IN HIS GROUNDS OF APPEAL FOR A.Y. 2013 - 14, ASSESSEE HAS AGREED FOR TAXATION OF CASH FOUND OF RS.7,30,000/ - AND THERE IS NO OBJECTION IN INCLUDING THIS AMOUNT IN ASSESSED INCOME. RATHER, ASSESSEE HAS HIMSELF INCLUDED CASH FOUND OF RS.7,30,000/ - IN UNDISPUTED ASSESSE D INCOME. FOR THE ESTIMATED E XTRAPO LATION OF COMMISSION INCOME FOR F.Y. 2013 - 14 AND ALL EARLIER YEARS, ASSESSEE 'S GRIEVANCE IS THAT IT IS NOT BASED ON SEIZED MATERIAL. THUS, TO RE - STATE ASSESSEE HAS AGREED IN HIS GROUNDS OF APPEAL TO ADDITION OF RS.7,30,000/ - OF CASH FOUND IN SEARCH FOR A.Y. 2013 - 14. MY DECISION REGARDING ESTIMATION AND 5 I.T.A. NO. 392 /MUM/201 8 K ALURAM MALI EXTRAPOLATION FOR COMMISSION INCOME FOR A.Y. 2013 - 14 AND A.Y. 2007 - 08 TO A.Y. 2012 - 13 IS AS BELOW: ESTIMATION AND EXPOLATION FORAY.2013 - 14: I) THE ESTIMATION AND EXTRAPOL ATION BY A.O. IS NOT WITHOUT ANY BASIS. IT IS BASED ON CASHFOUND AND NOTINGS IN DIARY FOR A P.RT OF YEAR REGARDING COMMISSION INCOME. ASSESSEE HAS DULY OWNED UP CASH AND THE DIARY AND HAS ALSO EXPLAINED THE NOTINGS IN DIARY AND ITS CODE FIGURES HAVE BEEN DULY DISCIPLINED BY ASSESSEE. THERE IS NO DISPUTE/AGITATION ABOUT THIS BY ASSESSEE. ESTIMATION FOR THE FULL YEAR ON THE BASIS OF DETAILS FOUND FOR A PART OF YEAR IS VALID WAY OF COMPUTATION OF INCOME. IN SEARCH PROCEEDINGS, IT IS NOT NECESSARY THAT DETAILS OF UNDISCLOSED INCOME OF EACH DAY OF FINANCIAL YEAR IS UNEARTHED. IT IS ENOUGH IF DETAILS OF CERTAIN PART OF YEARARE DETECTED, WHICH CAN BE FAIRLY EXTRAPOLATED FOR THE ENTIRE PERIOD OF YEAR. RELIANCE ON CONTINENTAL WAREHOUSING IS SUCH MISPLACED AS FACTS ARE DIFFERENT. II) ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE HIS INCOME FROM SAREE BUSINESS. NOT ASINGLE DOCUMENT/PAPER, ETC. HAS BEEN PRODUCED. RELIANCE OF ASSESSEE AS THE CASE OF MADAN LAI BINANI MISPLACED AS FACTS ARE DIFFERENT AS APART FROM CASH NO OTHER PAPER/DOCUMENT/DIARY, ETC. WAS FOUND/SEIZED IN CASE OF MADAN LAI BINANI. HOWEVER, IN CASE OF ASSESSEE, 6 I.T.A. NO. 392 /MUM/201 8 K ALURAM MALI DETAILS OF UNACCOUNTED INCOME WERE UNEARTHED IN DIARY FOUND DURING SEARCH. III) ASSESSEES OBJECTION TO CALCULATION MADE BY AD ON THE BASIS OF SEIZED DOCUMENT ISREJECTED AS (A)CALCU LATIONS MADE BY AD ARE FAIR AND LOGICAL ESTIMATION AND NO DAY TO DAY COMPUTATION CONSIDERING HOLIDAYS, FESTIVALS, ETC. SHOULD BE CONSIDERED WHILE ATTEMPTING FAIR ESTIMATION. (B) ALSO NO BENEFIT OF PRESUMED EXPENSES CAN BE GIVEN AS CLAIMED BY ASSESSEE ARE E XPENSES ARE NOT REAL BUT ESTIMATED AND THERE IS NO PROOF OF THE SAME. ALSO, THE CALCULATION IS OF ESTIMATED NET INCOME OF ASSESSEE ON THE BASIS OF SEIZED DOCUMENTS. THEY ARE ONLY FAIR ESTIMATIONS. THERE IS NO CATEGORICAL PROOF THAT ADDITIONAL BUSINESS, OVE R AND ABOVE, THE FOUND/SEIZED DOCUMENTS, WAS NOT DONE BY ASSESSEE OR WHETHER THERE WAS NOT MORE TURNOVER ON CERTAIN OTHER DAYS. THE AD HAS ONLY FAIRLY ESTIMATED ON THE BASIS OF SEIZED DOCUMENTS. SEIZED DOCUMENTS ONLY INDICATE THAT ASSESSEE WAS DOING BUSINE SS WHICH WAS TOTALLY UNACCOUNTED AND THE FAIRLY ESTIMATE THE UNDISCLOSED INCOME, ENTRIES FOUND ONSEIZED DOCUMENTS WAS MADE BASIS BY AD. THERE IS NO SCOPE FOR FURTHER NETTING THIS ESTIMATION. HENCE, THESE PLEAS OF ASSESSEE ARE DISMISSED. 7 I.T.A. NO. 392 /MUM/201 8 K ALURAM MALI IV) CASE LAWS RELIE D UPON BY ASSESSEE ARE OF NO HELP AS THEY ARE ON DIFFERENT FACTS ASASSESSEE S CASE DOCUMENTS WERE FO UND REVEALING UNACCOUNTED BUSINESS. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIE S AND SUBMISSIONS MADE BY LD. DR, WE FIND THAT LD. CIT (A) HAS CORRECTLY DISMISSED THESE GROUND S OF APPEAL RAISED BY THE ASSESSEE BY UPHOLDING THE ORDER OF AO . LD. CIT( A) HAS CORRECTLY APPRECIATED IN ITS ORDER THAT THE AO HAD MADE ADDITION ON THE BASIS OF S EIZED DOCUMENTS AND ALSO, THE SEIZED DOCUMENTS INDICATED THAT ASSESSEE WAS DOING BUSINESS WHICH WAS TOTALLY UNACCOUNTED A ND THEREFORE, THE FAIR ESTIMATION OF UNDISCLOSED INCOME WERE BASED ON ENTRIES FOUND ON SEIZED DOCUMENTS. MOREOVER, N O NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD CIT (A) . THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD. CIT (A ). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE 8 I.T.A. NO. 392 /MUM/201 8 K ALURAM MALI JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND S RAISED BY THE ASSESSEE STANDS DISMISSED . 6 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST MAY , 2018. SD/ - SD/ - (R.C. SHARMA ) ( SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 01 . 0 5 .201 8 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI