DCIT CIR 1, MUMBAI V. PLATINUM PROPERTIES, NAVI MUMBAI

ITA 8765/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83820 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: HARI RAHEJA SHRI MANI JAIN
• Keywords: Unexplained expenditure; Income from undisclosed sources; Search and seizure; Document seized; Period of limitation; Reasonable cause; Retraction; Documents seized
• Section: 44AD; 133A; 131; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C B ENCH, MUMBAI , , ! '#$ , % & BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO. 2600/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR : 2008-09 M/S. PLATINUM PROPERTIES, SHOP NO.1, VRUDAVAN PARK, PLOT NO. 9, SECTOR-34, KAMOTHE, KHARGHAR, NEW MUMBAI / VS. THE DCIT, CENTRAL CIRCLE-1, MUMBAI ./I .T.A. NO. 8765/MUM/2010 ( ' ' ' ' / ASSESSMENT YEAR : 2008-09 THE DCIT, CENTRAL CIRCLE-1, MUMBAI / VS. M/S. PLATINUM PROPERTIES, SHOP NO.1, VRUDAVAN PARK, PLOT NO. 9, SECTOR-34, KAMOTHE, KHARGHAR, NEW MUMBAI ( % ./ ) ./ PAN/GIR NO. : AAIFP 4159N ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / ASSESSEE BY: SHRI HARI RAHEJA SHRI MANI JAIN +,(* . - / REVENUE BY: SHRI A.C. TEJPAL . /0% / DATE OF HEARING :09.09.2014 12' . /0% / DATE OF PRONOUNCEMENT :12.09.2014 3 / O R D E R PER N.K. BILLAIYA, AM: ITA NOS. 2600/M/12 & 8765/M/2010 2 THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-1, THANE DT.31. 8.2010 PERTAINING TO A.Y.2008-09. AS BOTH THESE APPEALS INVOLVED COMMON ISSUES, THEY WERE HEARD TOGETHER AND DISPOSE OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 1.1. THE ASSESSEES APPEAL IS BARRED BY LIMITATION BY 46 5 DAYS. THE ASSESSEE HAS FILED A LETTER REQUESTING FOR CONDONAT ION OF DELAY. IN SUPPORT, THE ASSESSEE HAS FILED AN AFFIDAVIT STATIN G THAT THE ORDER OF THE LD. CIT(A) WAS HANDED OVER TO THE OFFICE OF CHARTER ED ACCOUNTANT AND THE DELAY IS IN PARTICULAR ON THE PART OF THE ADMIN ISTRATIVE HEAD MS. MALATHY MADHUMOHAN PILLAI. AN AFFIDAVIT OF MS. MAL ATHY M. PILLAI IS ALSO PLACED ON RECORD WHO HAS ADMITTED THAT DUE TO SOME INADVERTENT OVERSIGHT, SHE FAILED TO MAKE AN ENTRY IN THE APPEA L REGISTER MAINTAINED BY HER AND THE SAME WAS REALIZED ON ENQUIRY MADE BY THE ASSESSEE AND BECAUSE OF THIS FACT, THERE HAS BEEN A DELAY IN FIL ING THE APPEAL BEFORE THE TRIBUNAL. 1.2. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY RESIST ED TO THE CONDONATION OF DELAY. IT IS THE SAY OF THE LD. DR THAT SUBSEQUENT NOTICES ISSUED BY THE AO SHOULD HAVE TRIGGERED THE ASSESSEE TO ENQUIRE ABOUT THE FILING OF THE APPEAL WHICH IT HAS GROSSLY FAILED. THEREFORE, THE ASSESSEE HAD NO BONAFIDE REASON FOR FILING THE APPEAL SO LAT E. 1.3. HAVING HEARD THE RIVAL SUBMISSIONS AND FACTS OF THE CASE, WE FIND THAT THE ASSESSEE HAS EXPLAINED A REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION AS THERE WAS AN INA DVERTENT MISTAKE AT THE OFFICE OF THE CHARTERED ACCOUNTANT. THE SAME IS FO UND TO BE SUPPORTED BY AN AFFIDAVIT OF THE ADMINISTRATIVE HEAD OF THE C HARTERED ACCOUNTANT FIRM. IN OUR CONSIDERED OPINION, BY NOT FILING THE APPEAL WITHIN THE PERIOD ITA NOS. 2600/M/12 & 8765/M/2010 3 OF LIMITATION, THE ASSESSEE CANNOT HAVE ANY ULTERIO R PURPOSE. NO PRUDENT PERSON WOULD ACT IN SUCH A MANNER THAT HIS ACTION C AN BE DETRIMENTAL TO HIS OWN INTEREST. BY NOT FILING THE APPEAL ON TIME , THE ASSESSEE COULD NOT HAVE DERIVED ANY BENEFIT. WHENEVER SUBSTANTIAL JUS TICE AND TECHNICAL CONSIDERATIONS ARE OPPOSED TO EACH OTHER, CASE OF S UBSTANTIAL JUSTICE HAS TO BE PREFERRED AND JUSTICE ORIENTED APPROACH HAS TO B E TAKEN WHILE DECIDING THE MATTER ON CONDONATION OF DELAY. WE FIND THAT T HE REASONS EXPLAINED BY THE ASSESSEE ARE NOT MALAFIDE AND THERE IS NOTHI NG ON RECORD TO INFER THAT BY FILING A BELATED APPEAL, THE ASSESSEE COULD HAVE ACHIEVED AN ULTERIOR PURPOSE. ACCORDINGLY, WE ARE SATISFIED WI TH THE REASONS EXPLAINED BY THE ASSESSEE THAT THE ASSESSEE WAS HAV ING SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMI TATION. HOWEVER, WE FEEL THAT THE ASSESSEE SHOULD PAY COST OF RS. 5,000/- TO THE DEPARTMENT. WE CONDONE THE DELAY WITH COST. ITA NO. 2600/M/2012 ASSESSEES APPEAL 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 6,01,51,589/- OUT O F THE ADDITION OF RS. 6,36,91,589/- MADE BY THE AO ON ACCOUNT OF ALLEGED UNACCOUNTED INCOME. 3. THE ASSESSEE IS A BUILDER AND DEVELOPER. SEARCH AND SEIZURE ACTION IN PATEL GROUP OF CASES WAS CONDUCTED ON 17.01.2008 . SURVEY PROCEEDINGS U/S. 133A OF THE ACT WERE ALSO CARRIED OUT SIMULTANEOUSLY IN BUSINESS PREMISES OF PATEL GROUP OF CASES. THE ASS ESSEE IS PART OF THE SAID GROUP. 3.1. THE ASSESSEE FILED RETURN OF INCOME ON 29.9.20 08 DECLARING TOTAL INCOME AT RS. 75,00,000/-. STATUTORY NOTICES WERE ISSUED AND SERVED UPON ITA NOS. 2600/M/12 & 8765/M/2010 4 THE ASSESSEE. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS GIVEN COPIES OF SEIZED/IMPOUNDED DOCUM ENTS AND WAS ALSO ALLOWED INSPECTION OF THE BOOKS. COPIES OF THE SWO RN STATEMENTS WERE ALSO MADE AVAILABLE TO THE ASSESSEE. THE ASSESSEE WAS CONFRONTED WITH ONE PARTICULAR STATEMENT WHEREIN THE ASSESSEE HAS D ECLARED A SUM OF RS. 5 CRORES. ON PERUSING THE RETURN OF INCOME, THE AO NO TICED THAT THE ASSESSEE HAS NOT HONOURED ITS ADMISSION MADE DURING THE SEAR CH PROCEEDINGS. THE ASSESSEE WAS ASKED TO JUSTIFY ITS STAND. THE ASSES SEE STATED THAT PROFIT ON UNACCOUNTED RECEIPTS HAS BEEN OFFERED FOR TAX IN TH E RETURN FILED. THE AO DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE AND PROCEEDED BY TAKING INTO CONSIDERATION THE UNACCOUNTED RECEIPTS REFLECT ED IN THE SEIZED DOCUMENTS. SUCH DETAILS ARE INCORPORATED BY THE AO AT PARA-8 OF HIS ORDER. 3.2. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY TH E UNACCOUNTED RECEIPTS AND EXPENDITURE SHOULD NOT BE TREATED AS A SSESSEES UNDISCLOSED INCOME. IN ITS REPLY DT. 21.12.2009 THE ASSESSEE CO NTENDED THAT THE ENTIRE UNDISCLOSED SALES/RECEIPTS CANNOT BE ADDED TO THE T OTAL INCOME OF THE ASSESSEE. THE ADDITION SHOULD BE LIMITED ONLY TO T HE EXTENT OF PROFITS EMBEDDED IN SALES/RECEIPTS. IT WAS EXPLAINED THAT TAKING A LEAF OUT OF THE PRINCIPLE LAID DOWN IN SEC. 44AD OF THE ACT, THE AS SESSEE HAS OFFERED NET PROFIT MARGIN OF 8%. THE AO DID NOT ACCEPT THIS CO NTENTION OF THE ASSESSEE. AFTER ALLOWING ALL THE UNACCOUNTED EXPEN DITURE EXCEPT RS. 34.50 LAKHS, THE AO PROCEEDED BY MAKING AN ADDITION OF UNACCOUNTED INCOME OF RS. 7,L1,91,589/-, REITERATING THE ADMISS ION OF THE ASSESSEE DURING THE COURSE OF THE SEARCH PROCEEDINGS DECLARI NG RS. 5 CRORES AS ITS UNACCOUNTED INCOME. ITA NOS. 2600/M/12 & 8765/M/2010 5 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND REITERATED ITS CLAIM THAT ONLY THE EMBEDDED PROFIT IN THE TOTAL UNACCOUNTED RECEIPTS SHOULD BE TAKEN INTO CONSIDERATION FOR EST IMATING THE PROFIT OF THE ASSESSEE. AFTER CONSIDERING THE FACTS AND THE SUBMI SSIONS, THE LD. CIT(A) WAS OF THE FIRM BELIEF THAT SINCE THE ASSESSEE ITSE LF HAS OFFERED RS. 5 CRORES DURING THE COURSE OF THE SEARCH PROCEEDINGS , IT CANNOT BE ALLOWED TO RETRACT THE STATEMENT. THE LD. CIT(A) UPHELD TH E ACTION OF THE AO, HOWEVER, DIRECTED THE AO TO ALLOW THE EXPENDITURE O F RS. 35.40 LAKHS FOUND REFLECTED IN THE SEIZED DOCUMENT. 5. AGGRIEVED BY THIS, THE ASSESSEE AND THE REVENUE BOTH ARE IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUBMIT TED THAT THE REVENUE AUTHORITIES HAVE GROSSLY ERRED IN TREATING THE ENTIRE UNACCOUNTED RECEIPTS AS ITS INCOME. IT IS THE SAY OF THE LD. C OUNSEL THAT CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE I.E. BEING A BUILDER AND A DEVELOPER, THE ON-MONEY RECEIVED BY THE ASSESSEE IS EMBEDDED W ITH THE PROFIT ELEMENT AND THEREFORE ONLY PROFIT SHOULD BE ESTIMAT ED ON THE UNACCOUNTED RECEIPTS. IN SUPPORT, THE LD. COUNSEL RELIED UPON THE DECISION OF THE TRIBUNAL MUMBAI BENCH IN THE CASE OF MRS. MEHROO N . IRANI VS ACIT IN ITA NO. 1140(BOM) OF 1989. THE LD. COUNSEL ALSO RE LIED UPON THE DECISIONS OF THE TRIBUNAL AHMEDABAD BENCH IN THE CA SE OF KISHORE MOHANLAL TELWALA VS ACIT IN ITA NO. 4712/AHD/1996 A ND TRIBUNAL PUNE BENCH IN THE CASE OF BALAJI CONSTRUCTION VS ACIT IN ITA NO. 145/PUNE/1996. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE AO. IT IS THE SAY OF THE LD. D R THAT ONCE THE ASSESSEE ITA NOS. 2600/M/12 & 8765/M/2010 6 HAS ACCEPTED THE UNDISCLOSED INCOME DURING THE COUR SE OF THE SEARCH PROCEEDINGS, THE SAME CANNOT BE RETRACTED. IN SUPP ORT, THE LD. DR RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF DEWAN BAHADUR SETH DAS MOHTA VS THE UNION OF INDIA & ORS 26 ITR 722. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE JUDICIAL DECISIONS RELIED UPON BY BOTH PARTIES. IT IS NOT IN DISPUTE THAT DURING THE COURSE OF THE SEARCH PROCEEDINGS, SHRI MAHESH NANJI PATEL ADMITTED UNDISCLOSED INCOME OF RS. 5 CRORES IN THE HANDS OF THE ASSESSEE BASED ON THE PAPERS FOUND AND SEIZED. THE RELEVANT PORTION OF THE STATEMENT U/S. 132(4) DT. 3.3.2008 IS REPRODUCED BE LOW: I AM SHOWING YOU THE STATEMENTS OF SHRI NANJI R. P ATEL, SHRI AMBAVI D. VAVIA AND SHRI DEVJI W. PATEL RECORD ED U/S. 132(4) ON 17.1.2008 AT THEIR RESPECTIVE RESIDENCES DURING THE COURSE OF SEARCH PROCEEDINGS AND ALSO THE STATEMENT OF SHRI D EVJI PATEL RECORDED U/S. 131 ON 20.02.08. PLEASE GO THROUGH T HESE STATEMENTS AND STATE WHAT YOU HAVE TO SAY REGARDING THE UNACCO UNTED CASH TRANSACTIONS IN RESPECT OF THE PROPERTY BUSINESS UN DERTAKEN BY M/S. PLATINUM PROPERTIES AND ADMITTED BY THE PERSONS ABO VE IN THEIR RESPECTIVE STATEMENTS, ON THE BASIS OF THE PAPERS S EIZED FROM THE RESPECTIVE PREMISES. YOU MAY GO THROUGH THE RESPE CTIVE SEIZED PAPERS ALSO INCLUDING THE PAPERS IMPOUNDED FROM THE OFFICE PREMISES OF M/S. PLATINUM PROPERTIES AT PLOT NO.4, SECTOR 20, ROAD PALI, KHARGAR TALOJA ROAD, KALAMBOLI, PANVEL? A) AFTER GOING THROUGH THE STATEMENTS OF SHRI NAN JI R. PATEL, SHRI AMBAVI D. VAVIA AND SHRI DEVJI W. PATEL RECORDED DU RING THE COURSE OF SEARCH PROCEEDINGS AT THEIR RESPECTIVE RE SIDENCES AND STATEMENT OF SHRI DEVJI PATEL RECORDED DURING POST SEARCH PROCEEDINGS AND ALSO GOING THROUGH THE RESPECTIVE S EIZED PAPERS AND THE PAPERS IMPOUNDED FROM THE OFFICE PREMISES O F M/S. PLATINUM PROPERTIES AT PLOT NO.4, SECTOR 20, ROAD, PALI, KHARGAR TALOJA ROAD, KALAMBOLI, PANVEL, I HEREBY DECLARE A SUM OF RS.500 LAKHS AS TOTAL ADDITIONAL INCOME (INCLUDING THE INC OME DECLARED BY SHRI AMBAVI VAVIA OF RS.200 LAKHS AND SHRI NANJI PA TEL OF RS.300 LAKHS APPROX. IN THEIR STATEMENTS RECORDED U/S. 132 (4) DURING THE COURSE OF SEARCH PROCEEDINGS) OVER AND ABOVE THE IN COME REFLECTED ITA NOS. 2600/M/12 & 8765/M/2010 7 IN THE BOOKS, BEING UNACCOUNTED INCOME GENERATED B Y M/S. PLATINUM PROPERTIES ON ACCOUNT OF TRANSACTIONS UNDE RTAKEN IN CASH. THIS DECLARATION IS BEING MADE TO COVER UP D ISCREPANCIES IN THE SEIZED MATERIAL, BOOKS OF ACCOUNTS, INVESTMENTS , ASSETS, EXPENSES ETC. THE ABOVE UNACCOUNTED INCOME HAS BEE N GENERATED FROM THE PROPERTY BUSINESS OF M/S. PLATINUM PROPERT IES. I SHALL SUBMIT THE YEAR-WISE BREAKUP SHORTLY. I ALSO UNDER TAKE TO PAY THE DUE TAXES ON THIS UNDISCLOSED INCOME IN DUE COURSE OF TIME. THE ABOVE DISCLOSURE IS BEING MADE BY ME WITH THE UNDER STANDING THAT NO PENAL PROCEEDINGS AND OTHER PROCEEDINGS UNDER I. T. ACT SHALL BE INITIATED AGAINST THE FIRM M/S. PLATINUM PROPERTIES AND ITS PARTNERS. 9. THE REVENUE AUTHORITIES HAVE STRONGLY RELIED UPO N THIS ADMISSION OF THE ASSESSEE WITHOUT CONSIDERING THE NATURE OF B USINESS OF THE ASSESSEE. HERE IT WOULD BE PERTINENT TO SEE THE ENTRIES IN TH E SEIZED MATERIAL. THE FOLLOWING ENTRIES PERTAINING TO THE ASSESSEE WERE F OUND UNACCOUNTED AND NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS. PARTY NO.AR-1, NANJI R. PATE, 401, ANAND SAGAR, PLO T NO.34, SECTOR - 17, VASHI . BUNDLE NO. PAGE NO. ASSESSMENT YEAR UNACCOUNTED RECEIPTS UNACCOUNTED EXPENDITURE. 1 24 2008-2009 - 22,300 1 33 2008-2009 200,000 - 1 34 2008-2009 1,900,000 - 1 35 2008-2009 2,200,000 - 2 9 2008-2009 3,200,000 - 2 10 2008-2009 2,169,000 - 2 11 2008-2009 2,864,405 - 5 1 2008-2009 - 235,200 6 1 2008-2009 11,424,380 - 6 2 TO 4 2008-2009 - 3,450,000 7 1 TO 4 2008-2009 5,400,000 - TOTAL 29,357,785 3,707,500 PARTY NO.AR-2: DEVJI WAGHJI PATE, 801, SAGAR DARSHA N,BUILDING NO.8, NERUL ITA NOS. 2600/M/12 & 8765/M/2010 8 BUNDLE NO. PAGE NO. ASSESSMENT YEAR UNACCOUNTED RECEIPTS UNACCOUNTED EXPENDITURE. 1 9 2008-09 2,194,650 - 1 12 2008-09 414,434 1 13A 2008-09 1,785,000 1 14 2008-09 1,000,000 1 16 2008-09 3,420,000 1 22 2008-09 7,330,000 1 26 2008-09 4,425,000 1 29,30,33 2008-09 22,944,500 1 36 2008-09 5,239,000 1 37 2008-09 14,423,500 1 39 2008-09 4000,000 1 43 2008-09 10,078,950 1 54,52,50 2008-09 10,223,500 1 53 2008-09 3,500,000 1 56 2008-09 3,323,500 1 57 2008-09 500,000 3 4 2008-09 24,500 TOTAL 91,202,034 24,500 PARTY NO. AS-3: PLATINUM PROPERTIES, PLOT NO. 4 SEC TOR 20, ROADPALI, KHARGHAR, TALOJA, KALAMBOLI BUNDLE NO. PAGE NO. ASSESSMENT YEAR UNACCOUNTED RECEIPTS UNACCOUNTED EXPENDITURE 3 2 2008-09 -- 36,105 3 4 2008-09 -- 35,000 3 5 2008-09 -- 22,300 3 7 2008-09 -- 60,000 3 8 2008-09 -- 200 3 10 2008-09 -- 57,000 4 2 2008-09 -- 14,157,375 4 4 2008-09 -- 6,060,375 4 6 2008-09 -- 14,215,500 4 8 2008-09 -- 4,719,125 4 10 2008-09 ` -- 9,438,250 4 130 2008-09 -- -- 4 131 2008-09 -- 285,000 TOTAL 49,086,230 ITA NOS. 2600/M/12 & 8765/M/2010 9 10. A PERUSAL OF THESE UNACCOUNTED ENTRIES SHOWS TH AT THE ASSESSEE WAS MAKING ENTRIES OF THE ON-MONEY RECEIVED BY IT DURIN G THE COURSE OF ITS BUSINESS. U/S. 153A, THE AO HAS THE POWER TO ASSES S OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SUCH ASSESSMENT YEAR IN CASE OF PERSON WHERE A SEARCH IS INITIATED U/S. 132 OF THE ACT. THUS, THE AO HAS THE POWER TO ASSESS OR REASSESS TH E TOTAL INCOME OF THE ASSESSEE. WHAT CAN BE TAXED IS THE UNDISCLOSED INC OME AND NOT THE UNDISCLOSED RECEIPTS, THIS MEANS THAT ONLY A REASON ABLE AMOUNT OF PROFIT WHICH THE ASSESSEE COULD HAVE EARNED CAN BE ADDED. SEIZED PAPER INDICATES ASSESSEE WAS RECEIVING ON-MONEY IN THE OR DINARY COURSE OF ITS BUSINESS. EVEN THE UNACCOUNTED EXPENDITURES ARE AL SO REFLECTED IN THE SEIZED PAPERS. 10.1. CONSIDERING THE FACTS IN TOTALITY, IN OUR CON SIDERED OPINION, A REASONABLE PROFIT SHOULD BE TAXED WHICH IS EMBEDDED IN THE TOTAL UNACCOUNTED GROSS RECEIPTS AND THEREFORE 8% SHOULD MEET THE END OF JUSTICE. WE, ACCORDINGLY, DIRECT THE AO TO RECOMPU TE THE UNDISCLOSED INCOME BY TAKING 8% AS NET PROFIT RATIO ON TOTAL UN ACCOUNTED RECEIPTS. SINCE WE HAVE DIRECTED TO ESTIMATE THE PROFIT AT 8% , ALL THE EXPENDITURES ARE DEEMED TO BE ALLOWED. 11. BEFORE PARTING, THE LD. CIT(A) AS WELL AS THE L D. DEPARTMENTAL REPRESENTATIVE HAS STRONGLY RELIED UPON THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF DEWAN BAHADUR SETH DAS MOHTA (SUPRA). IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAS DECLARED THE ENTIRE GROSS RECEIPTS DURING THE COURSE OF THE SEARCH PROCEEDIN GS THEREAFTER REALIZE THAT ONLY THE PROFIT ELEMENT SHOULD HAVE BEEN OFFER ED FOR TAXATION WHICH IT RIGHTLY DID IN THE RETURN OF INCOME. ANY OFFER MAD E ON THE WRONG ASSUMPTION OF FACT/LAW CANNOT BE MADE A GROUND FOR TAKING THE BENEFIT BY ITA NOS. 2600/M/12 & 8765/M/2010 10 THE REVENUE AUTHORITIES. THEREFORE, THE RETRACTION OF THE ASSESSEE IS NOT ON THE UNDISCLOSED GROSS RECEIPTS BUT ON THE WRONG ASSUMPTION OF FACT THAT THE ENTIRE UNDISCLOSED GROSS RECEIPTS ARE ITS INCOM E. THE ASSESSEE HAS OFFERED A PRESUMPTIVE RATE OF INCOME ON THE TOTAL U NACCOUNTED GROSS RECEIPTS WHICH WE HAVE DIRECTED TO BE TAKEN AT THE RATE OF 8% OF THE TOTAL GROSS RECEIPTS. THEREFORE, IN OUR CONSIDERED OPINI ON, THE DECISION RELIED UPON BY THE LD. DR IS MISPLACED. ON THE ESTIMATION OF THE PROFIT, ALL THE EXPENSES ARE DEEMED TO BE ALLOWED, THEREFORE, THE A SSESSEE WILL NOT GET ANY OTHER DEDUCTION. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO. 8765/M/2010- REVENUES APPEAL 13. IN ASSESSEES APPEAL IN ITA NO. 2600/M/12, WE H AVE DIRECTED THE AO TO RECOMPUTE THE PROFIT BY APPLYING NET PROFIT @ 8%, ALL THE EXPENSES ARE DEEMED TO BE ALLOWED. THEREFORE, THERE IS NO Q UESTION OF ALLOWING ANY DEDUCTION SEPARATELY. APPEAL FILED BY THE REVE NUE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THE CROSS APPEAL FILED BY THE REVENUE IS ALLOWED FOR ST ATISTICAL PURPOSE. ODER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2014 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) / JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 4 DATED : 12 TH SEPTEMBER, 2014 . . ./ RJ , SR. PS ITA NOS. 2600/M/12 & 8765/M/2010 11 3 3 3 3 . .. . +/ +/ +/ +/ 5 '/ 5 '/ 5 '/ 5 '/ / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 78 +/ , , / DR, ITAT, MUMBAI 6. 89 : / GUARD FILE. 3 3 3 3 / BY ORDER, ,/ +/ //TRUE COPY// ; ;; ; / < < < < (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI