JHUNJHUNWALA DISTRIBUTORS P.LTD, MUMBAI V. ACIT CEN CIR 11, MUMBAI

ITA 695/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4244 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 29-03-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 24-01-2011
• Court: TRIBUNAL
• Department Lawyers: BHUPENDRA KUMAR SINGH
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Documents seized
• Section: 40A(3); 142(1); 153A; 131; 132; 144; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUM BAI .. , , BEFORE SHRI R. C. SHARMA, AM AND SHRI MAHAVIR SINGH , JM ./ I.T.A. NOS. 695 TO 701/MUM/2011 ( / ASSESSMENT YEARS: 2002-03 TO 2008-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. FLAT NO. 41/42, 5 TH FLOOR, MEGHNA APARTMENT, S. V. ROAD, SANTACRUZ (W),MUMBAI - 400 054 / VS. ASST. CIT, CENTRAL CIRCLE-11, MUMBAI-400 020 ./ ./PAN/GIR NO. AAACJ 9152 D ( # /APPELLANT ) : ( $% # / RESPONDENT ) # & / APPELLANT BY : NONE $% #& / RESPONDENT BY : SHRI BHUPENDRA KUMAR SINGH ( ) &* + / DATE OF HEARING : 29.03.2016 ,-./ &* + / DATE OF PRONOUNCEMENT : 07.04.2016 / O R D E R PER MAHAVIR SINGH, JM: THIS IS A SET OF SEVEN APPEALS BY THE ASSESSEE ARE ARISING OUT OF COMMON ORDER OF CIT(A)-37/I.T-620-623 & 603-605/ACCC-11/09-10 AY 2002-03-2008-09 DATED 18.11.2010. ASSESSMENTS WERE FRAMED BY ACIT, CENTRA L CIRCLE-11, MUMBAI U/S. 144 R.W.S. 153A OF THE INCOME-TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2002-03 TO 2008-09 VIDE HIS SEPARA TE ORDERS ALL DATED 15.12.2009. 2. AT THE OUTSET, IT IS NOTICED FROM THE ORDER SHEE T ENTRIES, IN THESE SEVEN APPEALS OF ASSESSEE, THAT THE ASSESSEE HAS FILED THESE APPEALS ON 24.1.2011 AND THESE APPEALS 2 ITA NOS. 695 TO 701/M/11 (A.YS. 02-03 TO 08-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. VS. ASST. CIT CAME UP FOR HEARING FIRST ON 25.2.2013, WHEN THE BE NCH DID NOT FUNCTION. SUBSEQUENTLY, THE HEARINGS WERE FIXED ON VARIOUS DA TES, I.E., 19.8.2013, 08.5.2014, 03.12.2014, 20.1.2015 (ON THIS DATE THE ASSESSEE AS KED FOR ADJOURNMENT VIDE LETTER DATED 10.1.2015), 15.4.2015, 05.5.2015, 07.5.2015, 12.5.2015, 04.6.2015, 24.8.2015, 08.12.2015, 03.2.2016 AND FINALLY ON 29.3.2016. FRO M THE ORDER SHEET ENTRIES IT IS NOTICED THAT ON HEARING OF THE DATES; NEITHER THE A SSESSEE APPEARED NOR WAS REPRESENTED THROUGH HIS COUNSEL. IN SUCH CIRCUMSTANCES, WE HAVE BEEN LEFT WITH NO OTHER ALTERNATIVE EXCEPT TO DECIDE THIS APPEAL EX PARTE IN THE ABSENCE OF ASSESSEE AFTER PERUSING THE CASE RECORDS INCLUDING THE ASSESSMENT ORDER, ORDER OF CIT(A) AND ARGUMENTS OF LD. SR. DR. HENCE, WE PROCEEDED TO HEA R THIS MATTER AND DECIDE THE SAME. 3. WE FIND FROM THESE SEVEN APPEALS THAT THE GROUND S RAISED IN ALL THE SEVEN APPEALS ARE IDENTICALLY WORDED, EXCEPT THE AMOUNTS. ON MERITS THERE ARE TWO ISSUES IN ALL THE SEVEN APPEALS AGAINST THE ORDER OF CIT(A) C ONFIRMING THE ORDER OF A.O. IN MAKING THE DISALLOWANCE U/S. 40A(3) ON ACCOUNT OF U NACCOUNTED CASH PURCHASES AND ALSO MAKING AN ADDITION OF OUTSTANDING LIABILITY U/ S. 41(1) OF THE ACT. SINCE, THE GROUNDS RAISED ARE COMMON AND IDENTICALLY WORDED, H ENCE WE ARE REPRODUCING THE GROUNDS AS RAISED IN FIRST APPEAL AND ALSO DECIDE T HE ISSUE ON THE BASIS OF THE SAME , I.E., IN ITA NO. 695/MUM/2011 FOR A.Y. 2002-03. 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN DECIDING THE APPEAL EX- PARTE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN NOT MENTIONING AND CONSIDERING THE ADJOURNMENT SOUGHT BY SHRI SUSH IL S. JHUNJHUNWALA ON 18-11-2010, WHEN HE PERSONALLY ATTENDED BEFORE THE LD. COMMISSI ONER OF INCOME TAX (APPEALS). 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN PASSING THE EX-P ARTE ASSESSMENT ORDER UNDER SECTION 144 OF THE I. T. ACT, 1961. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN NOT APPRECIATING THE FACTS OF THE CASE AS TO WHY THE AP PELLANT COMPANY HAD NOT COMPLIED WITH THE VARIOUS SUMMONS AND NOTICES ISSUED TO THE APPELLANT COMPANY BY THE ASSESSING OFFICER. 3 ITA NOS. 695 TO 701/M/11 (A.YS. 02-03 TO 08-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. VS. ASST. CIT 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN NOT CONSIDERING THE FACT THAT IN SPITE OF REPEATED REMINDERS AND PE RSONAL REQUESTS MADE BY THE APPELLANT COMPANY FROM TIME TO TIME, THE ASSESSING OFFICER HA S NOT SUPPLIED ALL THE SEIZED MATERIALS AND DOCUMENTS AND DATA IN THE COMPUTER, C DS, CPU, ETC. 6. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN NOT DECIDING ON THE ACTION OF THE ASSESSING OFFICER IN NOT SUPPLYIN G THE PHOTOCOPIES OF THE SEIZED MATERIALS AND DOCUMENTS AND DATA IN THE COMPUTER, C DS, CPU, ETC. ON THE ONE HAND AND PASSING THE ASSESSMENT ORDER EX-PARTE UNDER SEC . 144 OF THE INCOME TAX ACT ON THE OTHER HAND BY ADOPTING THE TIME-BARRING LIMIT OF 31 -12-2009 WHEN THE ACTUAL TIME BARRING LIMIT FOR COMPLETING THE ASSESSMENT U/S. 15 3A OF THE I. T. ACT WAS 31-12-2010. 7. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN COMPUTING THE TO TAL INCOME OF THE APPELLANT COMPANY AT RS. 4,68,95,820/-. 8. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS. 2,73,32,513/- AS DISALLOWANCE U/S. 40A(3) AND OF RS.1,43,85,532/- AS UNACCOUNTED CASH, TOTALING TO RS.4,17,18,045/- TREATING THE SAME AS UNACCOUNTED INCOME. 9. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FUR THER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.51,12,565/- BEING OUTSTANDING LIABILITY UNDER THE HEAD CURRENT LIABILITIES AND PR OVISIONS IN THE BALANCE SHEET BY TREATING THE SAME AS INCOME UNDER SECTION 41 OF THE INCOME TAX ACT. 4. WE HAVE GONE THROUGH THE ASSESSMENT ORDER AND SE EN THAT THE ASSESSMENT WAS FRAMED EX PARTE U/S. 144/153A OF THE ACT IN ALL THESE SEVEN ASSESSM ENT YEARS. THE FACTS OF THE CASE ARE THAT THE SEARCH AND SEIZURE A CTION U/S. 132 OF THE ACT WAS CONDUCTED ON THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE AND ITS ASSOCIATE CONCERNS ON 13.3.2008. DURING THE COURSE OF SEARCH, CERTAIN DOCUMENTS WERE FOUND AND SEIZED ON THE BASIS OF WHICH THE AO FRAMED ASSE SSMENTS. WE FIND THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME IN RESP ONSE TO NOTICES ISSUED U/S. 153A OF THE ACT AS WELL AS NO COMPLIANCE WAS MADE TO THE NO TICES ISSUED U/S. 142(1) OF THE ACT. IN TERM OF THE ABOVE, THE A.O. BASED ON SEIZED MATERIAL ESTIMATED THE ADDITIONS U/S. 40A(3) OF THE ACT ON ACCOUNT OF CASH PURCHASES AND CURRENT LIABILITIES U/S. 41(1) OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A). 4 ITA NOS. 695 TO 701/M/11 (A.YS. 02-03 TO 08-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. VS. ASST. CIT 5. THE CIT(A) ALLOWED VARIOUS OPPORTUNITIES TO THE ASSESSEE BY ISSUING NOTICES FOR APPEARANCE BUT NONE REPRESENTED AND THE FACTS AS RE CORDED BY THE LD. CIT(A) FOR PASSING EX PARTE ORDER READS AS UNDER: 2.3.1 I HAVE CAREFULLY AND DISPASSIONATELY CONSIDE RED THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUND NOS. 1, 2, 3, 4 & 5 ARE GENERAL IN NATURE AND NO SPECIFIC ARGUMENTS HAVE BEEN MADE WITH REFERENCE TO THE AFORESAID GROU NDS OF APPEAL. HOWEVER, THESE GROUNDS OF APPEALS GROUND NOS. 1, 2, 3,4 & 5 ARE DE CIDED ALONG WITH THE MAIN GROUNDS OF APPEAL NOS. 6 & 7 AS DISCUSSED IN THE SUCCEEDING PARAGRAPHS. 2.3.2 GROUND NO. 6 INVOLVES ADDITION IN RESPECT OF PROFIT FROM UNACCO UNTED CASH SALES CALCULATED AT 10% OF THE UNACCOUNTED SALES AS RECORDED IN THE SEIZED MATERIAL AND ON THE BASIS OF REASONABLE PROJECTION MADE OUT OF THE ENTRIES RECORDED IN THE SEIZED ANNEXURE A-1 AND A-4 FOUND AND SEIZED BY THE INVESTIGATION WING FROM THE OFFICE PREMISES OF THE APPELLANT U/S. 132(1) OF THE ACT ON 14-03-2008. THE CASH SALES AS RECORDED IN THE AFORE SAID SEIZED MATERIAL CONSTITUTE PRIMARY EVIDENCE. THE APPELLANT HAS NOT BEEN ABLE T O REBUT THE AFORESAID PRIMARY EVIDENCES AS RECORDED IN THE SEIZED MATERIAL. THE A O HAS MADE A REASONABLE ADDITION @ 10% ONLY OF THE UNACCOUNTED SALES MADE BY THE APP ELLANT DURING THE TIME PERIOD 01- 04-2001 TO 13-03-2008 RELEVANT TO AYS.2002-03, 2003 -04, 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09. SECONDLY, THE AO HAS DISALLOWED 20% OF THE CASH PAYMENTS EXCEEDING RS.20,000/- IN RESPECT OF BUSINESS CARRIE D OUT BY IT. NO MATERIAL WAS FURNISHED, NEITHER BEFORE THE AO NOR BEFORE THE UND ERSIGNED TO REBUT THE EVIDENCES RECORDED IN THE SEIZED MATERIAL. IN THE ABSENCE OF ANY ARGUMENTS FROM THE LEARNED AR AND IN THE ABSENCE OF ANY WRITTEN SUBMISSIONS, THE AOS ARGUMENTS HAVE NOT BEEN CONTROVERTED. SINCE THE PROFITS & GAINS DERIVED FRO M UNACCOUNTED CASH SALES ARE LIABLE TO BE TAXED IN ACCORDANCE WITH THE PROVISIONS INCLU DING SEC. 40A(3) OF THE ACT, THE FACT THAT IT IS NOT PRACTICABLE TO COMPLY WITH THE PROVI SIONS OF SEC. 40A(3) BY MAKING PAYMENTS BY CROSSED CHEQUE OR BANK DRAFT IN RESPECT OF GREY MARKET TRANSACTIONS, WOULD NOT PREVENT OPERATION OF THE SAID SEC. 40A(3) OF TH E ACT. THE FACT THAT IT WAS NOT POSSIBLE TO ESTABLISH THE IDENTITY OF THE PARTIES FROM WHOM PURCHASES WERE MADE WOULD NOT EXEMPT THE APPELLANT FROM OBLIGATION TO ESTABLISH S UCH IDENTITY. [REF.: S. VENKATA SUBBARAO VS. CIT (1988) 173 ITR 340 (AP)]. IN THE C ASE OF CIT VS. HYNOUP FOOD & OIL IND. (P) LTD. (2005) 199 CTR (GUJ.) 350, IT WAS HEL D THAT WHERE INCOME FROM AN UNDISCLOSED BUSINESS IS CHARGED TO TAX, PROVISIONS OF SEC. 40A(3) SHALL BE ATTRACTED. EVIDENCE OF GENUINENESS OF THE PAYMENT AND THE IDEN TITY OF THE PAYEE ARE THE FIRST AND FOREMOST REQUIREMENT FOR THE APPLICABILITY OF RULE 6DD(J). WHEN THESE TWO FACTORS ARE ESTABLISHED, ONLY THEN THE QUESTION AS TO WHETHER T HE PAYMENT IN CASH WAS MADE IN EXCEPTIONAL OR UNAVOIDABLE CIRCUMSTANCES CAN BE EXA MINED. 2.3.3. IN THE APPEALS UNDER CONSIDERATION BEFORE TH E UNDERSIGNED, THE APPELLANT HAS NOT EVEN FURNISHED THE RETURNS OF INCOME WITH REFERENCE TO NOTICES U/S.153A OF THE ACT. NO WRITTEN SUBMISSIONS HAVE BEEN FURNISHED, NO ARGUMEN TS HAVE BEEN MADE ALTHOUGH SUFFICIENT OPPORTUNITIES WERE GRANTED TO THE APPELL ANT AS DISCUSSED IN PARA NO. 2.2.1 & 2.2.2 ABOVE. HAVING REGARD TO THE FACTS AND CIRCUMS TANCES OF THE CASE AND IN LAW, THE ADDITION @ 10% OF THE UNACCOUNTED CASH SALES MADE B Y THE APPELLANT AND DISALLOWANCE U/S. 40A(3) AS MADE BY THE AO IN RELEVANT AYS.2002- 03, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09 ARE CONFIRMED. GROUND NO . 6 IS DISMISSED FOR ALL ASSESSMENT YEARS UNDER APPEAL I.E. AYS. 2002-03, 20 03-04, 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09. 5 ITA NOS. 695 TO 701/M/11 (A.YS. 02-03 TO 08-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. VS. ASST. CIT 2.3.4 GROUND NO. 7: I HAVE CAREFULLY AND DISPASSION ATELY CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE. THE AO HAS GIVEN A FINDI NG OF THE FACT THAT THE APPELLANT HAS NOT FURNISHED RETURN OF INCOME WITH REFERENCE TO NO TICES U/S. 153A OF THE ACT. IT SEEMS THAT TILL DATE, RETURNS OF INCOME HAVE NOT BEEN FUR NISHED WITH REFERENCE TO NOTICES ISSUED U/S. 153A OF THE ACT FOR THE RELEVANT ASSESSMENT YE ARS UNDER APPEAL. THE AO HAS ADDED OUTSTANDING CURRENT LIABILITIES AND PROVISIONS AS F ERRETED OUT FROM THE OLD RETURNS OF INCOME. THE AO HAS ADDED THE AFORESAID OUTSTANDING LIABILITIES & PROVISIONS BECAUSE NO CONFIRMATION FROM SUCH CREDITORS WAS FURNISHED A ND THE GENUINENESS OF SUCH LIABILITIES WAS NOT PROVED BY THE APPELLANT TO THE SATISFACTION OF THE AO. NO MATERIAL WAS FURNISHED NOR WERE ANY EVIDENCES FURNISHED BEFORE T HE UNDERSIGNED TO PROVE THAT THE IMPUGNED OUTSTANDING LIABILITIES WERE GENUINE OR TH AT CONFIRMATIONS FROM SUCH CREDITORS WERE FURNISHED BEFORE THE AO. THE APPELLANT HAS NOT BEEN ABLE TO PROVE THE GENUINENESS OF THE AFORESAID LIABILITIES IN SPITE OF AVAILING S UFFICIENT OPPORTUNITIES. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, BOGUS LIAB ILITIES HAVE BEEN RIGHTLY CHARGED TO TAX BY THE AO. SUCH ADDITION MADE BY THE AO WITH RE FERENCE TO OUTSTANDING LIABILITIES ARE HEREBY CONFIRMED FOR AYS.2002-03, 2003-04, 2004 -05, 2005-06, 2006-07, 2007-08 & 2008-09. GROUND OF APPEAL NO. 7 IS DISMISSED FOR AYS. 2002-03, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09. AGGRIEVED AGAINST THE ACTION OF THE CIT(A), THE ASS ESSEE IS IN APPEALS BEFORE US. 6. THE FIRST COMMON ISSUE RAISED BY THE ASSESSEE IN ITS APPEALS IS AGAINST THE ACTION OF CIT(A) CONFIRMING THE ACTION OF AO PASSING EX PARTE ORDER U/S. 144 OF THE ACT AND ALSO NOT PROVIDING PHOTOCOPIES OF THE SEIZED MATERI ALS AND DOCUMENTS AND DATA IN THE COMPUTER, CDS, CPU, ETC. FOR THIS, THE ASSESSEE HAS RAISED GROUNDS 1 TO 6 (WHICH ARE ALREADY REPRODUCED ABOVE). 7. WE FIND FROM THE ASSESSMENT ORDER THAT THE A.O. HAS RECORDED THE FACT IN RESPECT OF THE SEIZED DOCUMENTS FOUND FROM THE PREMISES OF THE ASSESSEE IN RESPECT OF CASH SALES AND ESTIMATION OF THE SAME ON THE BASIS OF ST ATEMENT OF ONE OF THE EMPLOYEES OF DIRECTOR RECORDED U/S. 131 OF THE ACT DURING THE CO URSE OF POST SEARCH PROCEEDINGS ON 29.5.2008. HE RECORDED THE FOLLOWING FACTS IN PARA 5.1 AND FINALLY MADE DISALLOWANCE U/S. 40A(3) IN RESPECT OF CASH PAYMENTS FOR PURCHAS ES VIDE PARA 5.1 AS UNDER: 5.1. CASH TRANSACTIONS AS PER SEIZED REGISTERS: DURING THE COURSE OF SEARCH PROCEEDINGS, ANNEXURE A-1 (70 PAGES) AND ANNEXURE A-4 (15 PAGES) WERE SEIZED FROM THE PREMIS ES OF JHUNJHUNWALA DISTRIBUTORS P. LTD. AT F/20, ANSA INDUSTRIAL ESTATE, SAKI VIHAR RO AD, POWAI, MUMBAI - 72, ON 14/03/08. THE SALIENT FEATURES OF ABOVE TWO ANNEXURES ARE AS BELOW: 6 ITA NOS. 695 TO 701/M/11 (A.YS. 02-03 TO 08-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. VS. ASST. CIT ANNEXURE AL (70 PAGES) - JHUNIHUNWALA DISTRIBUTORS P. LTD. APPEARS TO BE A PAYMENT RECEIPT REGISTER, BASED ON DIFFERENT CHEQUE NOS. THE REGISTER TOTALS IS RS.19922429 FOR CHEQUE TRANS ACTIONS AND RS.11987944 FOR CASH TRANSACTIONS. THE PERIOD OF RECORDS IS 30/06/04 TO 02/08/04. THE CASH AMOUNT CAN BE EASILY DISTINGUISHED BY THE SEPARATE COLUMN TITLED AS 'CAS H AMT'. THERE IS A SEPARATE COLUMN WHICH SHOWS THE PERSON W HO HAS MADE THE COLLECTION. NAMES SUCH AS 'DIRECT', 'TIWARI', 'NITIN', 'PANDEY' ETC. FIND PLACE. ANNEXURE A4 (15 PAGES) - JHUNJHUNWALA DISTRIBUTORS P. LTD COLLECTION BOOK THE REGISTER TOTAL IS RS. 411750 FOR CHEQUE TRANSAC TIONS AND RS.1216617 FOR CASH TRANSACTIONS. THE RECORDS ARE MAINTAINED PARTY-WISE. THE COLLECTION BOOK PRIMARILY PERTAINS TO THE YEAR 2006, WITH FEW STRAY TRANSACTIONS FOR THE YEAR 2007. BILL-WISE RECORDS ARE KEPT. MANY OF THE CASH TRANSACTIONS EXCEED RS.20,000/- WHEN THE STATEMENT OF MR. RAMAKANT TIWARI, EMPLOYEE OF THE DIRECTOR (SHRI SUDHIRKUMAR JHUNJHUNWALA) WAS RECORDED U/S.131 OF THE ACT, ON 2 9/05/08, HE STATED AS FOLLOWS: Q.8. FROM WHOM ELSE HAVE YOU DEALT IN CASH ON BEHAL F OF MR. SUDHIR JHUNJHUNWALA? WHAT IS THE QUANTUM? ANS. I MOSTLY DEAL OVER TELEPHONE. I USED TO SEND O THER PEOPLE LIKE SHRIRAM TIWARI, AKSHAYLAL PANDEY, JAGDISH TO COLLECT CASH. THIS WAS DONE FROM CLOTH MERCHANTS AND PARTIES WITH WHOM MR. SUDHIR JHUN;HUN WALA HAD DONE CASH SALES. BUT ON FEW OCCASIONS, I HAVE ALSO GONE AND C OLLECTED CASH. THE AMOUNT OF CASH CANNOT BE SAID WITH CERTAINTY. IT RANGES FROM FEW THOUSAND RUPEES TO EVEN FEW LAKHS OF RUPEES. Q.9. HAVE YOU COLLECTED EVEN RS. 1 LAKH TO 2 LAKH I N CASH FOR GARMENT BUSINESS? ANS. YES, I HAVE DONE SO. I HAVE COLLECTED CASH OF RS. 1 - 2 LAKHS ALSO. A PRIMA-FACIE PERUSAL OF THE TALLY DATA IN THE COMP UTER BACKUP HAS SHOWN THAT THE CASH RECEIPTS HAVE NOT BEEN ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS . THE SUMMARY OF CHEQUE RECEIPTS VIS-A-VIS CASH RECEIPTS AS EVIDENCE D BY THESE 2 REGISTERS IS AS FOLLOWS : SR. NO. REGISTER NO. CHEQUE PAYMENT CASH PAYMENT TOTAL 1 A1 19922429 11987944 31910373 3 A4 411750 1216617 1628367 TOTAL (RS.) 20334179 13204561 33538740 TOTAL % 60.63% 39.37% 100% THUS, IT CAN BE SEEN THAT ABOUT 39.37% OF THE RECEI PTS ARE IN CASH. IT IS WELL KNOWN THAT IN VIEW OF THE PROVISIONS OF S.40A(3), NO PARTY WILL M AKE THE PAYMENTS IN CASH IN EXCESS OF RS.20,000/-. 7 ITA NOS. 695 TO 701/M/11 (A.YS. 02-03 TO 08-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. VS. ASST. CIT SIMILARLY, THE A.O. ALSO MADE DISALLOWANCE OF OUTST ANDING LIABILITIES VIDE PARA 5.2 AS UNDER: 5.2 CURRENT LIABILITIES AND PROVISIONS : FROM THE BALANCE SHEET FILED AS PER THE OLD RETURN, IT IS FOUND THAT AN AMOUNT OF RS.51,12,565/ - IS OUTSTANDING UNDER THE HEAD CURRENT LIABILITIES AND PROVISIONS. IN ABSENCE OF A NY VALID PROOF THAT THE ABOVE AMOUNT IS PAYABLE TO THE PARTIES CONCERNED; THE WHOLE AMOUNT IS TREATED AS BUSINESS PROFIT DURING THE YEAR U/S 41 OF IT ACT 1961. PENALTY PROCEEDINGS U/S. 271(1)(C) ARE INITIATED SEPARATELY. 8. THE CIT(A) HAS NOTED THE NON-COOPERATIVE ATTITUD E OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN PARA 2.1.1, WHE REIN THE ENTIRE FACTS AND FIGURES ARE DISCUSSED ALONG WITH THE DATES WHEN OPPORTUNITI ES WERE GIVEN TO THE ASSESSEE TO REPRESENT ITS CASE. WE FIND THAT THE ASSESSEE BEFOR E THE A.O. HAS NOT COMPLIED WITH THE NOTICE ISSUED FOR FILING OF THE RETURN U/S. 153A OF THE ACT AND ALSO NOT COMPLIED WITH THE NOTICE ISSUED U/S. 142(1) OF THE ACT FOR FILING OF THE DETAILS. EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS NONE ATTENDED THE PROCEED INGS AND THE A.O. HAS FRAMED BEST JUDGMENT ASSESSMENT U/S. 144 OF THE ACT. NOW B EFORE US, THE ASSESSEE HAS NEVER ATTENDED THE HEARING TO EXPLAIN HIS CASE THAT HOW T HE BEST JUDGMENT ASSESSMENT IS BAD IN LAW? EVEN BEFORE THE CIT(A), THE ASSESSEE HAS NO T ATTENDED AND AT LAST THE CIT(A) HAS TO PASS EX PARTE ORDER ON MERITS. 9. WE FIND FROM THE FACTS OF THE CASE THAT THE ASSE SSEE HAS ENTERED INTO CASH TRANSACTIONS AS PER SEIZED REGISTERS ANNEXURE A-1 C ONTAINING 70 PGS. AND ANNEXURE A- 4 CONTAINING 15 PAGES SEIZED FROM THE PREMISES OF T HE ASSESSEE WHICH CLEARLY REVEALED THAT THERE IS CASH TRANSACTION OF THE PURCHASES AND THE A.O. HAS MADE ESTIMATION FROM THESE SEIZED MATERIALS FOR ALL THESE SEVEN YEARS. W E FURTHER FIND THAT EVEN THE OUTSTANDING LIABILITIES AND THE PROVISIONS MADE ARE BASED ON SEIZED REGISTERS AND BALANCE-SHEET FILED BY THE ASSESSEE AS PER OLD RETU RNS. THE CIT(A) CONFIRMED THE COMPUTATION OF UNACCOUNTED CASH PURCHASES CALCULATE D AND ESTIMATION OF DISALLOWANCE BASED ON SEIZED MATERIAL AND ON THE BASIS OF THE RE ASONABLE PROJECTION MADE OUT OF THE ENTRIES RECORDED IN THE SEIZED ANNEXURE A1 AND A 4 FOUND DURING THE COURSE OF SEARCH U/S. 142(1) OF THE ACT ON THE PREMISES OF THE ASSES SEE ON 13.3.2008. FURTHER, THE 8 ITA NOS. 695 TO 701/M/11 (A.YS. 02-03 TO 08-09) JHUNJHUNWALA DISTRIBUTORS PVT. LTD. VS. ASST. CIT CIT(A) ALSO CONFIRMED THE OUTSTANDING LIABILITIES A ND PROVISION FOR THE REASON THAT NO CONFIRMATION FOR SUCH CREDITORS WAS FURNISHED BY TH E ASSESSEE AND GENUINENESS OF SUCH LIABILITIES WAS NOT PROVED TO THE SATISFACTION OF T HE A.O. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE FIND NO INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES AND HENCE, THE ORDER OF CIT(A) IS CONFIRMED. SIMILAR ARE THE FACTS IN OTHER YEARS AND ADDITIONS ARE ALSO ON IDENTICAL GROUNDS, HENCE TAKING A CONSISTENT VIEW, WE DISMISS ALL THES E SEVEN APPEALS OF THE ASSESSEE. 10. IN THE RESULT, ALL THE SEVEN APPEALS OF THE ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 07 TH , 2016 SD/- SD/- (R. C. SHARMA) (MAHAVIR SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( MUMBAI; 1) DATED : 07.04.2016 .)../ ROSHANI , SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT 3. ( 2* ( ) / THE CIT(A) 4. ( 2* / CIT CONCERNED 5. 56 7$*)89 , +89/ , ( / DR, ITAT, MUMBAI 6. 7 : ; / GUARD FILE ! / BY ORDER, / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI