PRAKASH N DOSHI, MUMBAI V. DCIT CEN CIR 37, MUMBAI

ITA 481/MUM/2012

• Counselvise Citation: 48119914 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Keywords: Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C , MUMBAI BEFORE SHRI RAJENDRA SINGH , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO S . 480 & 481/M/12 ASSESSMENT YEAR S : 2008 - 09 & 2009 - 10 SHRI PRAKASH N DOSHI 101, RUSHABH APARTMENT S, SARVODAYA NAGAR, NAHUR ROAD, MULUND (W) MUMBAI - 400080 PAN: A JWPD8346H VS. D.C.I.T. CENTRAL CIRCLE 37, 11, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI JAYANT R. BHATT REVENUE BY : SHRI JITENDRA YADAV , D.R. DATE OF HEARING : 24 .0 7 .20 13 DATE OF PRONOUNCEMENT : 21.08. 20 13 O R D E R PER SANJAY GARG , JM : BOTH THE ABOVE NOTED APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE O RDERS OF THE CIT(A) DATED 13.10.11. SINCE BOTH THE APPEALS ARE RELATED TO THE SAME ASSESSEE FOR DIFFERENT ASSESSMENT YEARS AND THE FACTS AND ISSUES INVOLVED ARE ALSO SIMILAR IN NATURE, HENCE BOTH THE APPEALS ARE DISPOSED OF F WITH THIS COMMON ORDER. FOR T HE SAKE OF CONVENIENCE, THE FACTS HAVE BEEN TAKEN FROM ITA NO.480/M/12 FOR THE ASSESSMENT YEAR 2008 - 09. ITA NO.480/M/12: THE GROUNDS OF APPEAL READ A S UNDER: GROUNDS OF APPEAL: THE CIT(A) HAS ERRED IN CONFIRMING AN ADDITION OF RS.3,60,000/ - OVER A ND ABOVE THE INCOME DECLARED BY THE APPELLANT WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAD ALREADY OFFERED SUCH INCOME TO TAX AND THEREFORE THERE WAS NO NEED TO MAKE FUR THER ADDITION ON ESTIMATE BASIS . ALTERNATIVELY, ADDITION MADE BY THE A.O. AND CONFIRMED BY THE CIT(A) SHOULD BE REDUCED TO THE EXTENT OF INCOME ALREADY OFFERED. ITA NOS.480 & 481/M/2012 SHRI HARSHAD DOSHI & SHRI PRAKASH N DOSHI 2 RELIEF CLAIMED: ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) OF RS.3,60,000/ - BE DELETED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT , AN INDIVIDUAL , HAS BEEN ENGAGED IN THE BUSINESS OF BROKERAGE AND COMMISSION AGENT. DURING THE COURSE OF HIS BUSINESS , HE ALONG WITH ONE MR. HARSHAD DOSHI HAD ARRANGED FOR CERTAIN ACCOMMODATION INVOICES FOR SOME OF THE GROUP COMPANIES OF RANGARA G ROUP AND HAD EARNED COM MISSION @ 0.10% OF SUCH INVOICE VALUE. A SEARCH ACTION TOOK PLACE ON THE RANGARA GROUP ON FEBRUARY 13, 2009 WHEN IT WAS FOUND THAT THEY WERE INDULGING IN TAKING ACCOMMODATION ENTRIES. THEY ALSO ADMITTED TO INFLATION OF PURCHASES THROUGH SUCH ENTITIES . THEY ALSO STATED THAT THE ENTRIES WERE GIVEN BY SHRI HARSHAD DOSHI AND SHRI PRAKASH N DOSHI (APPELLANT) FOR WHICH THEY WERE PAID COMMISSION. IN THE RETURN OF INCOME FILED BY THE APPELLANT, IT WAS FOUND THAT HE HAD NOT SHOWN THE INCOME FROM SUCH COMMISS ION IN THE RETURN FILED IN COMPLIANCE TO SECTION 153C. WHEN CONFRONTED WITH THE SAME, THE APPELLANT SUBMITTED A LETTER DATED DECEMBER 21, 2010 TO THE AO AND ADMITTED THAT SUCH INCOME WAS NOT DISCLOSED TO THE DEPARTMENT. HE ALSO WORKED OUT THE COMMISSION SO EARNED WHICH THE AO HAS MENTIONED ON PAGE 5 & 6 OF THE ASSESSMENT ORDER. THE APPELLANT QUANTIFIED THE UNDISCLOSED INCOME FOR ASSESSMENT YEAR 2008 - 09 AND ASSESSMENT YEAR 2009 - 10 AT RS.1,22,540/ - AND RS.1,91,360/ - RESPECTIVELY. HOWEVER, THIS INCOME WAS OFFERED NOT ON ANY VERIFIABLE EVIDENCE BUT ON THE BASIS OF HIS MEMORY. HENCE, THE AO ESTIMATED THE INCOME AT RS.3,60,000/ - FOR ASSESSMENT YEAR 2008 - 09 AND RS.3,30,000/ - FOR ASSESSMENT YEAR 2009 - 10. 3. BEFORE US, THE LD. A.R. HAS CONTENDED THAT THE A . O . HAS MADE THE ADDITION ONLY ON THE BASIS OF THE ESTIMATE AND HAS NOT GIVEN THE BENEFIT TO THE APPELLANT OF THE INCOME ALREADY OFFERED . ON THE OTHER HAND ONE LD. D.R. HAS MAINLY RELIED UPON THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RESPECTIVE SUB MISSIONS OF THE COUNSELS FOR THE PARTIES. ITA NOS.480 & 481/M/2012 SHRI HARSHAD DOSHI & SHRI PRAKASH N DOSHI 3 5 . AS OBSERVED BY THE AUTHORITIES BELOW, IT IS ALMOST AN ADMITTED CASE OF THE ASSESSEE THAT HE HAD EARNED COMMISSION INCOME BY PROVIDING ACCOMMODATION ENTRIES AND SUCH INCOME HAD NEVER BEEN DISCLOSED BY HIM IN H IS RETURN OF INCOME. AP ART FROM THE TRANSACTIONS WITH SHRI HARSHAD MEHTA HE HAD BEEN PROVIDING SUCH ACCOMMODATION ENTRIES INDEPENDENTLY ALSO TO VARIOUS OTHER PERSONS AND EARNING COMMISSION THERE UPON. ALONG WITH ADMISSION OF THE AFORESAID FACTS THE ASSESS EE ALSO QUANTIFIED HIS UNDISCLOSED INCOME FOR ASSESSMENT YEAR 2007 - 08 & 2008 - 09 AT RS.1,22,540/ - AND RS.1,91,360/ - RESPECTIVELY. THE A.O. WHILE MAKING ADDITION OBSERVED THAT THE ASSESSEE HAD NOT GIVEN ANY VERIFIABLE EVIDENCE TO CORRECTLY DETERMINE THE Q UANTUM OF ACCOMMODATION ENTRIES PROVIDED BY HIM TO VARIOUS PERSONS. HE HAS ADMITTEDLY GIVEN THESE FIGURES ONLY FROM HIS MEMORY. THE A.O. THUS C ONSIDERING THE FACTS AVAILABLE , SUBMISSIONS OF THE ASSESSEE, SEIZED MATERIAL, AND STATEMENT OF ALL RELATED PERS ONS SUCH AS SHRI HARSHAD C. DOSHI AND ADMISSION OF THE MAIN PERSON HANDLING THE AFFAIRS OF THE GROUP SHRI. AMIN RANGARA, ESTIMATE D THE INCOME OF THE ASSESSEE FROM PROVIDING ACCOMMODATION ENTRIES AT RS.30,000/ - PER MONTH. HOWEVER WHILE COMPUTING THE INCOME , HE FAILED TO DEDUCT THE INCOME WHICH WAS ALREADY OFFERED BY THE ASSESSE ARISING OUT AS COMMISSION FROM THE ABOVE SAID ACCOMMODATION ENTRIES. IT CAN ALSO BE OBSERVED THAT THOUGH , THE ASSESSEE HAD OFFERED INCOME RELYING UPON HIS MEMORY ONLY AND WITHOUT PR OVIDING ANY COGENT EVIDENCE, BUT AT THE SAME TIME IT CAN ALSO BE NOTICED THAT THE A.O. HAD ALSO MADE THE ADDITION ON ESTIMATION BASIS ONLY. THERE SEEMS FORCE IN THE CONTENTION OF THE LD. AR THAT SUCH AN ESTIMATION OF INCOME BY THE A.O. WAS ON HIGHER SIDE E SPECIALLY IN THE ABSENCE OF ANY EVIDENCE CONFRONTING THE QUANTUM OF INCOME OFFERED BY THE ASSESSEE HIMSELF. TAKING IN VIEW THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, THE COMPUTATION/ QUANTUM OF ADDITION MADE BY THE A.O. IS HEREBY SET ASIDE. HOWEVER WE THINK THAT IT WILL BE REASONABLE AND PROPER TO DIRECT THE A.O. TO QUANTIFY THE INCOME OF THE ASSESS E E BY ADDING @30% MORE TO THE INCOME ALREADY DECLARED BY THE ASSESS E E AS EARNED FROM COMMISSION THROUGH ACCOMMODATION ENTRIES. ORDERS ACCORDINGLY. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NOS.480 & 481/M/2012 SHRI HARSHAD DOSHI & SHRI PRAKASH N DOSHI 4 ITA NO. 481/M/12 FOR ASSESSMENT YEAR 2009 - 10 I N VIEW OF OUR FINDINGS GIVEN ABOVE , THE A.O. IS DIRECTED TO QUANTIFY/COMPUTE THE INCOME OF THE ASSESSEE IN TERMS OF OUR ORDER GIVEN ABOVE IN APPELLANT N O.480/M/12 FOR ASSESSMENT YEAR 2008 - 09 AND THIS APPEAL OF THE ASSESSEE IS ALSO HEREBY PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.08. 2013. SD/ - SD/ - ( RAJENDRA SINGH ) ( SANJAY GARG ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 21.08. 2013. * JK COPY TO: TH E APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.