Arun Ganpat Shendge, Pune V. ACIT, Pune

ITA 936/PUN/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0461 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Keywords: Reopening of assessment; Search and seizure; Document seized; Principle of natural justice; Cost of acquisition; Bad and doubtful debts; Reason to believe; Documents seized
• Section: 143(3); 153A; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO S . 932 TO 93 9 /PN/20 1 2 / ASSESSMENT YEAR S : 20 0 1 - 02 TO 200 8 - 0 9 ARUN GANPAT SHENDGE ARUN GANPAT SHENDGE 410, GANESH PETH, GURUNANAK ROAD, PUNE 41 1002 . / APPELLANT PAN: A DWPS8937R VS. THE ASST. COMMISSIONER OF INCOME TAX , CENTRAL CIR CLE 1(2), PUNE . / RESPONDENT / APPELLANT BY : S MT. DEEPA KHARE / RESPOND ENT BY : SHRI ANIL CHAWARE / DATE OF HEARING : 23 . 08 .201 6 / DATE OF PRONOUNCEMEN T: 21 . 1 1 .201 6 / / ORDER PER SUSHMA CHOWLA, JM: T HIS BUNCH OF APPEAL S FILED BY THE ASSESSEE ARE AGAINST SEPARATE ORDER S OF CIT( A ) - CENTRAL , PUNE , ALL DATED 2 9 . 02 .201 2 RELATING TO ASSESSMENT YEAR S 2001 - 02 TO 2008 - 09 AGAINST RESPECTIVE OR DER S PASSED UNDER SECTION S 143(3) R.W.S. 147 , 143(3) R.W.S. 153A AND 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . 143(3) R.W.S. 153A AND 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 2 2. THIS BUNCH OF APPEALS RELATING TO THE SAME ASSESSEE ON IDENTICAL ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ITA NO. 932 /PN/201 2 TO ADJUDICATE THE ISSUE. 3 . THE ASSESSEE IN ITA NO. 932 /PN/201 2 , RELATING TO ASSESSMENT YEAR 2001 - 02 HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN REOPENING THE ASSESSMENT BY ISSUING NOTICE U / S 148 IN ABSENCE OF ANY MATERIAL INDICATING ANY ESCAPEMENT OF INCOME FOR THE YEAR UNDER CONSIDERATION 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION ON ACCOUNT OF ESTIMATION OF COMMISSION EARNED WHEN NO MATERIAL WAS FOUND DURIN G THE COURSE OF SEARCH ACTION CARRIED OUT U / S 132 FOR THE YEAR UNDER CONSIDERATION. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONF IRMING ADDITION OF RS . 9,83,550 / - ON ACCOUNT OF ESTIMATION OF COMMISSION AT AN AVERAGE PROFIT WORKED OUT BY THE LEARNED AO AT R S. 7023/ - WHICH IS NOT AS PER THE SEIZED DAIRY FOUND DURING THE SEARCH AND FAILED TO APPRECIATE THAT THE ACTUAL AVERAGE PROFIT AS PER SEIZED DIARY IS LESS THAN THAT ESTIMATED BY LEARNED AO. 4. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN ALLOWING RS.2809/ - TOWARDS EXPENSES UNDER THE HEAD 'FIRST CATEGORY PER RICKSHAW' AS AGAINST RS .3900/ - WHICH IS AS PER THE SEIZED DIARY WHILE WO RKING OUT COMMISSION PER RICKSHA W . 5. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF BAD - DEBTS OR LOSS OF RS NIL INCURRED BY THE APPELLANT AS GUARANTOR OR SURETY. 4. THE GROUNDS OF APPEAL NO.1 AND 2 RAISED BY THE ASSESSEE AGA INST REOPENING OF ASSESSMENT AND ESTIMATION OF COMMISSION INCOME IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH ACTION, WERE NOT PRESSED AND HENCE, ARE DISMISSED AS NOT PRESSED. THE ASSESSEE FURTHER RAISED THE ISSUE OF ESTIMATION OF COMM ISSION INCOME IN THE HANDS OF ASSESSEE BY WAY OF GROUNDS OF APPEAL NO.3 TO 5. 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS A MEMBER OF SHENDGE GROUP, WHEREIN SEARCH AND SEIZURE ACTION WERE CARRIED OUT UNDER SECTION 132 OF ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 3 THE ACT ON 04.07.2007. THE ASSESSING OFFICER THEREAFTER, HAD REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AND CONSEQUENTLY, REASONS WERE RECORDED FOR REOPENING THE ASSESSMENT AND NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT. IN REPLY, THE ASSESS EE FILED THE RETURN OF INCOME AND THE CASE OF ASSESSEE WAS TAKEN UP FOR SCRUTINY. THE ASSESSEE WAS WORKING AS COMMISSION AGENT FOR ARRANGING LOANS FOR PURCHASE OF AUTO RIKSHAWS BY DIFFERENT BUYERS THROUGH M/S. SAGAR AUTO WHICH WAS A PROPRIETARY CONCERN OF THE ASSESSEE. THE ASSESSEE CLAIMED RECEIPT OF GROSS COMMISSION OF RS. 1,68,259/ - DURING THE INSTANT ASSESSMENT YEAR, IN THE RETURN OF INCOME. WHEREAS, IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE DECLARED GROSS COM MISSION OF RS.1,75,301/ - . THE ASSESSING OFFICER FROM THE SEIZED RECORDS NOTED THAT THE ASSESSEE HAD ARRANGED LOANS FOR 275 AUTOS THROUGH MAHESH SAHAKARI BANK, KARVE NAGAR BRANCH, KARVE NAGAR, PUNE. THE ASSESSING OFFICER FURTHER NOTED THAT DURING THE COUR SE OF SEARCH AND POST SEARCH ENQUIRIES REVEALED THAT THE ASSESSEE HAD EARNED COMMISSION OF AT LEAST RS.7,023/ - PER VEHICLE. THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN AS TO WHY THE SAID COMMISSION AMOUNT PER VEHICLE SHOULD NOT BE CONSIDERED TO ARRIVE AT THE TOTAL COMMISSION EARNED FOR THE YEAR UNDER CONSIDERATION . THE ASSESSEE VIDE WRITTEN SUBMISSIONS EXPLAINED AS UNDER: - I ) THE EXPENDITURES MENTIONED ON THE STATEMENT OF ASSESSEE DATED 05 - 07 - 2007 ARE GENUINE AND COMPULSORILY INCURRED IN ANY PROPOSAL AND HENCE, 2007 ARE GENUINE AND COMPULSORILY INCURRED IN ANY PROPOSAL AND HENCE, THEY SHOULD BE CONSIDERED WHILE ARRIVING AT THE NET COMMISSION EARNED IN EVERY PROPOSAL . II ) DURING THE COURSE OF SEARCH AND POST - SEARCH INQUIRIES, THE ASSESSEE HAD STATED THE EXPENSES WHICH WERE REQUIRED TO BE INCURRED IN THE BUSINESS AND IF SUCH EXPENS ES ARE CONSIDERED , THE COMMISSION WOULD BE COMMENSURATE WITH WHAT HAS BEEN ACTUALLY CLAIMED TO HAVE RECEIVED IN THE RETURNS OF INCOME. III ) THE MARKET FORCES LIKE DEMAND AND SUPPLY AND OVERALL ECONOMIC CLIMATE HAVE GREAT INFLUENCE ON THE COMMISSION RECEIVED. IN F . Y . 2000 - 2001 , THE AUTO MARK E T W AS NOT IN FULL SWING AND HENCE , ESTIMATE OF TOTAL COMMISSION ON TH E B AS IS OF DOCUMENTS S EIZED DURING THE COURSE OF SEARCH WOULD NOT BE FAIR AND JUSTIFIED. FAIR AND JUSTIFIED. ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 4 6. THE ASSESSING OFFICER FURTHER TOOK NOTE OF THE STATEMENT R ECORDED DURING THE COURSE OF SEARCH ON 05.07.2007, WHEREIN THE ASSESSEE MENTIONED THAT FOR THE AUTO HE HAD TO INCUR EXPENSES ON PURCHASE OF AUTO, RTO, INSURANCE AND METER. HOWEVER, DURING POST SEARCH ENQUIRIES, THE ASSESSEE SUBMITTED THAT HE INCURRED CERT AIN ADDITIONAL EXPENSES AS UNDER: - I) METER PASSING AND PETROL - RS . 450 II) HOOD FITTING , NA V AR P A TTI , S ID E PL Y WOO D - R S . 650 III) A / R FITTING , BAR CUTTING , S ID E B A R , FRA ME, GLA S S FITTING - R S. 75 0 IV) YELLOW COLOR , RADIUM PATTI - RS . 5 5 0 V) ASSIGNMENT CHARG ES / COMMISSION - RS. 1500 TO RS . 3500 7. THE ASSESSEE WAS ASKED TO PRODUCE DOCUMENTARY EVIDENCE AND ALSO PRODUCE THE PERSON TO WHOM HE CLAIMED TO HAVE PAID THESE EXPENSES. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE SAME. SINCE THE ASSESSEE WAS NOT MAINTAINI NG REGULAR BOOKS OF ACCOUNT, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD CLAIMED BOGUS EXPENDITURE. FURTHER, STATEMENT OF THE ASSESSEE WAS RECORDED ON 21.09.2007 AND THE RELEVANT PORTION OF THE SAME ARE REPRODUCED WAS RECORDED ON 21.09.2007 AND THE RELEVANT PORTION OF THE SAME ARE REPRODUCED BY THE ASSESSING OFFICER UNDER PARA 6 AND AFTER CONSIDERING THE SAME, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD TRIED TO INFLATE EXPENSES. IN ORDER TO ASCERTAIN THE PROFIT EARNED BY THE ASSESSEE FROM SALE OF AUTOS, THE ASSESSING OFFICER ALLOWED CERTAIN EXPENSES OTHER THAN THE PURCHASE COST OF AUTO AS PER PARA 7, WHICH ARE AS UNDER: - I ) RTO - RS.1650 II ) METER - RS.1850 III ) INSURANCE - RS.2044 IV ) BANK CHARGES - RS.2205 8. THE ASSESSING OFFICER THUS, DETERMINED THE PROFIT EARNED BY THE ASSESSEE FROM S ALE OF AUTOS BY ARRANGING LOANS TH ROUGH BANKS ON THE BASIS OF INFORMATION RECEIVED FROM THE BANKS AND SEIZED DOCUMENTS AND YEARWISE PROFIT WORKED OUT AS UNDER: - UNDER: - ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 5 A.Y. NUMBER OF PROPOSALS ARRANGED TOTAL PROFIT AVERAGE PROFIT PER VEHICLE 2003 - 04 26 RS.1,82,600/ - RS.7,023/ - 2004 - 05 15 RS.1 ,07,415/ - RS.7,161/ - 2005 - 06 37 RS. 3,54,162/ - RS.9,571/ - 2006 - 07 133 RS.11,82,191/ - RS.8,888/ - 9. THE ASSESSING OFFICER THUS, HELD THAT THE ASSESSEE HAD EARNED AN AVERAGE PROFIT OF RS. 7,023/ - PER RIKSHAW AS NET COMMISSION. THUS, THE TOTAL INCOME FOR T HE YEAR UNDER APPEAL FROM THE SAID BUSINESS WAS WORKED OUT AT RS. 19,31,325/ - I.E. RS.7,023/ - X 275 . AS AGAINST THE SAME, THE ASSESSEE HAD ONLY DECLARED INCOME OF RS. 1,75,300/ - . T HE ASSESSING OFFICER THUS, HELD THAT THE ASSESSEE HAD SUPPRESSED COMMISSION OF INCOME OF RS. 17,56,025/ - , WHICH WAS ADDED AS TOTAL INCOME OF THE ASSESSEE. FURTHER, ADDITION WAS MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF INTEREST INCOME. 10. THE CIT(A) UPHELD THE REOPENING OF ASSESSMENT IN THE HANDS OF ASSESSEE. IN RESPECT OF AD DITION ON ACCOUNT OF SUPPRESSION OF COMMISSION, THE CIT(A) OBSERVED THAT THE FACTS AND CIRCUMSTANCES RELATING TO THE SAID ADDITION IN ASSESSMENT YEAR 2001 - 02 WERE SUBSTANTIALLY IDENTICAL WITH THE FACTS AND CIRCUMSTANCES OF THE SAME ADDITION IN THE CASE OF ASSESSEE FOR ASSESSMENT YEARS 2002 - 03 TO 2008 - 09. REFERENCE WAS MADE TO THE ORDER PASSED BY THE CIT(A) IN ASSESSMENT YEAR 2004 - 05 AND APPLYING THE SAID PROPOSITION, THE ADDITION MADE IN ASSESSMENT YEAR 2001 - 02 WAS UPHELD. 11. THE PERUSAL OF APPELLATE ORD ER FOR ASSESSMENT YEAR 2004 - 05 REFLECTS THAT THE ASSESSEE HAD URGED BEFORE HIM THAT THE ASSESSING OFFICER HAD APPLIED THE AVERAGE PROFIT, CALCULATED ON THE BASIS OF 15 LOAN PROPOSALS, TO THE TOTAL NUMBER OF VEHICLES IN RESPECT OF WHICH SERVICES WERE RENDER ED BY THE ASSESSEE . A CCORDING TO THE ASSESSEE, THE ESTIMATED PROFIT / COMMISSION FROM THE SERVICES WAS NOT ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 6 CORRECTLY CALCULATED. THE RELEVANT PORTION OF SUBMISSIONS OF ASSESSEE IS REPRODUCED AT PAGES 3 TO 6 OF THE APPELLATE ORDER. THE CIT(A) NOTED THAT THE ASSESSING OFFICER HAD EXAMINED THE SEIZED DOCUMENTS AND OTHER MATERIAL ON RECORD AND HAD FOUND THAT THE ASSESSEE WAS NOT MAINTAINING REGULAR BOOKS OF ACCOUNT. ON THE DETAILED EXAMINATION OF SEIZED DOCUMENTS AND OTHER MATERIAL, HE HAD COME TO THE CONCL USION THAT THE ASSESSEE WAS SUPPRESSING COMMISSION FROM THE BUSINESS OF AUTO COMMISSION AGENT. THE CIT(A) VIDE PARA 3.3 SUMMARIZED THE SUBMISSIONS OF ASSESSEE AND OBSERVED THAT THE SAID SUBMISSIONS MADE DURING THE COURSE OF APPELLATE PROCEEDINGS WERE SUBS TANTIALLY IDENTICAL WITH THOSE MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE MAIN OBJECTION TAKEN BY THE ASSESSEE WAS IN RESPECT OF ESTIMATION OF COMMISSION AND ITS EXTRAPOLATION. THE ASSESSEE RELIED ON CERTAIN CASE LAWS IN THIS REGARD AND ALSO C ONTENDED THAT SINCE NO CORRESPONDING ASSETS WERE FOUND DURING THE COURSE OF SEARCH ACTION, NO ADDITION WAS WARRANTED. THE OTHER OBJECTIONS RAISED BY THE ASSESSEE WERE IN RESPECT OF NON - ALLOWANCE OF DEDUCTION ON ACCOUNT OF CERTAIN EXPENSES. FIRST OF ALL, THE CIT(A) DEALT WITH RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND FOUND THAT THE SAID CASE LAWS WERE GIVEN IN DIFFERENT CONTEXT AND WERE WITH REFERENCE TO DIFFERENT SET OF FACTS. THE NEXT CONTENTION OF ASSESSEE THAT INCOME COULD NOT BE COMPUTED ON ESTIMATE BASIS ON PRESUMPTION AND ASSUMPTION, WAS ALSO BRUSHED ASIDE AS THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNT AND P OST JUDGMENT ASSESSMENT HAD TO BE COMPLETED ON THE BASIS OF CERTAIN DEGREE OF GUESS WORK. ANOTHE R CONTENTION OF ASSESSEE THAT THE PROFIT / INCOME COULD NOT BE ESTIMATED ON THE BASIS OF DOCUMENTS / INFORMATION OF PART OF THE YEAR WAS ALSO NOT FOUND TO BE JUSTIFIED AS IN VARIOUS JUDICIAL RULINGS , EXTRAPOLATION ON THE BASIS OF DOCUMENTS FOUND FOR PART P ERIOD HAD BEEN UPHELD. RELIANCE IN THIS REGARD WAS PLACED ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN KHOPADE KISANRAO MANIKRAO KISANRAO REPORTED 74 ITD 25 . THE CIT(A) ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 7 OBSERVED THAT EVEN THOUGH THE SAID DECISION RELATED TO CHARGING OF ON - MONE Y IN A TRANSACTION RELATING TO IMMOVABLE PROPERTY, THE SAID PRINCIPLE WAS EQUALLY APPLICABLE TO THE CASE OF ASSESSEE. WHERE IT WAS FOUND ON THE BASIS OF EVIDENCE THAT THE ASSESSEE HAD RECEIVED ON - MONEY IN RESPECT OF ONE UNIT SOLD, WHICH WAS NOT RECORDED I N THE BOOKS OF ACCOUNT, THEN IT WAS FOR THE ASSESSEE TO ESTABLISH THAT NO ON - MONEY WAS RECEIVED IN RESPECT OF SALE OF OTHER UNITS IN THE SAME PROJECT. SO, THE CIT(A) CONCLUDED BY HOLDING THAT WHERE THE EVIDENCE WAS FOUND TO THE FACT THAT THE ASSESSEE HAD NOT RECORDED TRUE AND FULL AMOUNT OF COMMISSION RECEIVED BY HIM IN RESPECT OF HIS BUSINESS AS AUTO COMMISSION AGENT, THEN IT WAS PERMISSIBLE FOR THE ASSESSING OFFICER TO MAKE ESTIMATE OF COMMISSION IN RESPECT OF ALL VEHICLES ARRANGED BY HIM. RELIANCE IN T HIS REGARD WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF H.M. ESUFALI H.M. ABDULALI REPORTED IN 90 ITR 271 (SC). IN THE FACTS OF THE CASE BEFORE THE HONBLE SUPREME COURT, THE ASSESSING OFFICER HAD DETECTED SALES FOR 19 DAY S AS NOT HAVING BEEN ENTERED IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER ESTIMATED THE TURNOVER FOR THE ENTIRE YEAR BASED ON THE UNDISCLOSED SALES FOR THE PERIOD OF 19 DAYS. THE HONBLE SUPREME COURT UPHELD THE ESTIMATION OF INCOME BY THE ASSESSING OF FICER. FURTHER, RELIANCE WAS PLACED ON ANOTHER DECISION OF MUMBAI BENCH OF TRIBUNAL IN THE CASE OF OVERSEAS CHINESE CUISINE. THEREFORE, THE CIT(A) HELD THAT THUS, THE BASIS FOR ESTIMATING THE COMMISSION BY THE A.O. IN RESPECT OF OTHER VEHICLES HAS NEXUS WITH FACTS DISCOVERED IN CASE OF COMMISSION OF SOME OTHER VEHICLES. THEREFORE, BY NO STRETCH OF IMAGINATION IT CAN BE SAID THAT THE ESTIMATE IN CASE OF THE APPELLANT IS ARBITRARY OR WITHOUT BASIS AND CANNOT BE MADE. THE NEXT CONTENTION OF ASSESSEE THAT I F COMMISSION TO THE EXTENT RECORDED IN THE SEIZED DOCUMENTS WAS RECEIVED, THEN THE EVIDENCE OF RECEIPT OF SUBSTANTIAL CASH OR OTHER UNDISCLOSED INVESTMENT SHOULD HAVE BEEN FOUND DURING THE COURSE OF SEARCH OPERATION , SINCE NO SUCH ASSETS OR OTHER EVIDENCES WERE FOUND AND HENCE, THERE ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 8 WAS NO BASIS FOR THE AFORESAID ADDITION. THIS ARGUMENT WAS ALSO REJECTED BY THE CIT(A) OBSERVING THAT IN THE ABSENCE OF EVIDENCE FOUND DURING THE COURSE OF SEARCH, IT COULD NOT BE SAID THAT THE ASSESSEE HAD NOT RECEIVED HIGHER COMMISSION. WHERE THE EVIDENCE WAS FOUND FOR RECEIPT OF HIGHER COMMISSION IN RESPECT OF SOME OF THE VEHICLES, THE ONUS WAS ON THE ASSESSEE TO PROVE THAT HE DID NOT RECEIVE HIGHER COMMISSION IN RESPECT OF OTHER VEHICLES. SINCE THE ASSESSEE HAD NOT FURNIS HED ANY CREDIBLE EVIDENCE IN THIS REGARD, THE CONTENTION OF ASSESSEE WAS REJECTED. 12. THE NEXT OBJECTION OF ASSESSEE BEFORE THE CIT(A) RELATED TO NON - ALLOWANCE OF DEDUCTION OF EXPENSES WHICH AS PER THE CIT(A), COULD BE BROA DLY DIVIDED INTO TWO CATEGORIES , WHICH READ AS UNDER: - I) THESE EXPENSES WHICH ARE RELATED TO THE FOLLOWING ITEMS WILL BE REFERRED TO AS EXPENSES OF FIRST CATEGORY HEREINAFTERWARDS. I . METER PASSING AND PETROL, II . HOOD FITTING, NAVAR PATTI, SIDE PLYWOOD, II . HOOD FITTING, NAVAR PATTI, SIDE PLYWOOD, III . A/R FITTING, BAR CUTTING, SIDE BAR , FRAME, GLASS FITTING, IV . YELLOW COLOUR, RADIUM PATTI, V . ASSIGNMENT CHARGES / COMMISSION II) THE OTHER DEDUCTIONS WHICH INCLUDED LOSSES SUFFERED IN SOME DEALS, COMMISSION TO AGENTS / SUB - AGENTS / OTHER PARTIES AND OTHER EXPENSES WILL BE REFERRED TO AS OTHER EXPENSES HEREIN AFTERWARDS. 13. IN RESPECT OF FIRST CATEGORY OF EXPENSES, THE ASSESSEE CONTENDED THAT THE DOCUMENTARY EVIDENCE IN RESPECT OF THE SAME WERE FOUND FOR ASSESSMENT YEARS 2004 - 05 TO 2008 - 09 DURING THE COURSE OF SEARCH OPERATION . RS.3,900/ - W AS CLAIMED TO HAVE BEEN INCURRED IN RESPECT OF THESE EXPENSES. THE ASSESSEE MENTIONED THAT THE SAID FACT WAS BROUGHT TO THE NOTICE OF ASSESSING OFFICER, HOWEVER, THE ASSESSING OFFICER ALLOWED THE EXPENSES IN RESPECT OF 120 VEHICLES FOR ASSESSMENT YEAR 200 6 - 07 ONLY. THE CIT(A) NOTED THAT THE ASSESSEE HAD BROUGHT THESE FACTS TO THE NOTICE OF ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAD CONSIDERED THE SAID ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 9 SUBMISSIONS BUT HAD ALLOWED EXPENSES ONLY IN RESPECT OF 120 VEHICLES IN ASSESSMENT YEAR 2006 - 07 . REFERENCE WAS MADE TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER WHICH IS REPRODUCED UNDER PARA 3.9.3 AT PAGES 23 AND 24 OF THE APPELLATE ORDER. BEFORE THE CIT(A), THE ASSESSEE PRODUCED THE COPIES OF SEIZED DOCU MENTS WHICH SHOW THAT THE EXPENSES WERE INCURRED IN THE PERIOD RELEVANT FOR ASSESSMENT YEARS 2006 - 07 AND 2008 - 09 ALSO. THE CIT(A) IN THIS REGARD OBSERVED THAT THE CONTENTION OF ASSESSEE THAT DOCUMENTARY EVIDENCE IN RESPECT OF EXPENSES INCURRED WERE AVAILA BLE IN RESPECT OF ASSESSMENT YEARS 2006 - 07 AND 2008 - 09 WERE CORRECT . WHERE THE ASSESSING OFFICER HAD ACCEPTED THE EXISTENCE OF DOCUMENTARY EVIDENCE OF THESE EXPENSES IN RESPECT OF SOME OF RIKSHAWS IN THE PERIOD RELEVANT TO ASSESSMENT YEAR 2006 - 07 IN THE A SSESSMENT ORDER AND WHERE DOCUMENTARY EVIDENCE RELATING TO OTHER RIKSHAWS WERE AVAILABLE AS PART OF THE DOCUMENTS SEIZED AT SERIAL NO.1 OF ANNEXURE - A OF PANCHANAMA DATED 05.07.2007 , THE CIT(A) NOTED THAT THE DOCUMENTS CLEARLY INDICATE THE FACT THAT THE ASS ESSEE HAD INCURRED EXPENSES OF RS.3,900/ - PER VEHICLE I.E. RIKSHAW IN THE RELEVANT PERIOD. THE ASSESSEE HAD FURTHER FURNISHED CERTAIN DOCUMENTS IN RESPECT OF THE SAID EXPENSES FOR THE PERIOD RELEVANT TO ASSESSMENT YEARS 2004 - 05 TO 2005 - 06 ALSO. HOWEVER, THE ASSESSEE COULD NOT GIVE REFERENCE OF THE PANCHANAMA THROUGH WHICH THE SAID DOCUMENTS WERE SEIZED. UNDER THE CIRCUMSTANCES, THE CIT(A) HELD THAT THE ASSESSEE COULD NOT GET MUCH SUPPORT FROM THE SAID DOCUMENTS. THE CIT(A) IN VIEW OF THE SAID EVIDENCE F OUND OBSERVED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF ASSESSEE IN RESPECT OF OTHER EXPENSES OF FIRST CATEGORY MERELY ON THE GROUND THAT THE EVIDENCES WERE NOT FOUND RELATING TO SAID EXPENSES IN RESPECT OF OTHER RIKSHAWS. UND ER THE CIRCUMSTANCES, THE CIT(A) HELD THAT THE DEDUCTION IN RESPECT OF FIRST CATEGORY HAD TO BE ALLOWED I N RESPECT OF ALL RIKSHAWS . T HE CIT(A) HELD THAT THE EXPENSES @ RS.3,900/ - PER RIKSHAW HAD TO BE ALLOWED IN RESPECT OF ALL RIKSHAWS IN THE ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 10 ASSESSMENT Y EARS 2006 - 07 AND 2008 - 09 WHEREIN THE EVIDENCES WERE FOUND . S I NCE ASSESSMENT YEAR 2007 - 08 FALLS IN BETWEEN THE SAME , T HE FIGURE OF EXPENSES OF FIRST CATEGORY OF RS.3,900/ - PER RIKSHAW WAS ALLOWED I N RESPECT OF ALL RIKSHAWS IN ASSESSMENT YEAR 2007 - 08 . W HER E THE FIGURE OF COMMISSION IN ASSESSMENT YEAR 2005 - 06 WAS IN THE VICINITY OF THIS FIGURE OF COMMISSION IN ASSESSMENT YEAR 2006 - 07, THE CIT(A) HELD THAT THE FIGURE OF EXPENSES OF FIRST CATEGORY COULD BE TAKEN @ RS.3,900/ - PER RIKSHAW IN ASSESSMENT YEAR 2005 - 06 . HE FURTHER ALLOWED 40% OF THE AMOUNT OF COMMISSION FOR ASSESSMENT YEARS 2001 - 02 TO 2004 - 05 . THE CIT(A) THUS, RE - WORKED THE COMMISSION INCOME IN THE HANDS OF ASSESSEE ON ACCOUNT OF EXPENSES TO BE ALLOWED OF FIRST CATEGORY PER RIKSHAW. THE TABULATE D DETAILS OF RELIEF ON ACCOUNT OF SAID EXPENSES OF FIRST CATEGORY FOR VARIOUS ASSESSMENT YEARS ARE TABULATED AT PAGE 27 OF THE APPELLATE ORDER. 14. THEN, COMING TO THE OTHER EXPENSES, WHICH INCLUDED NON - ALLOWANCE OF LOSSES SUFFERED BY THE ASSESSEE IN SOME OF THE DEALS, NON - ALLOWANCE OF OTHER LOSSES SUFFERED BY THE ASSESSEE IN SOME OF THE DEALS, NON - ALLOWANCE OF OTHER EXPENSES AND PAYMENT OF COMMISSION TO AGENTS / SUB - AGENTS / OTHER PARTIES , THE CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAD DEALT WITH THE SAID OBJECTIONS EFFECTIVELY. IN RESPECT OF NON - ALLOWANCE OF LOSSES, THE ASSE SSING OFFICER HAS STATED THAT NO COMMISSION AGENT WOULD SUFFER LOSSES. IN RESPECT OF VARIOUS OTHER EXPENSES, THE ASSESSEE WAS ASKED TO PRODUCE THE DOCUMENTARY EVIDENCE IN RESPECT OF THE SAME AND ALSO TO PRODUCE THE PERSONS TO WHOM THE PAYMENTS IN RESPECT OF THE SAID EXPENSES WERE MADE. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE DOCUMENTARY EVIDENCE NOR THE PARTIES TO WHOM THE PAYMENTS WERE MADE. THE CIT(A) UNDER THE CIRCUMSTANCES HELD THAT THE ASSESSING OFFICER HAD CORRECTLY NOT ALLOWED THE DEDUCTION ON ACCOUNT OF SAID EXPENSES. SIMILARLY, THE ASSESSING OFFICER WAS HELD TO BE JUSTIFIED IN NOT GIVING DEDUCTION IN RESPECT OF COMMISSION PAYMENT TO THE SAID AGENTS / OTHER PARTIES IN THE ABSENCE OF ANY ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 11 EVIDENCE OR THE ASSESSEE NOT PRODUCING THE PERSONS TO WH OM THE PAYMENTS WERE MADE. THE CIT(A) THUS, UPHELD THE ORDER OF ASSESSING OFFICER IN RESPECT OF NON - ALLOWANCE OF DEDUCTION ON ACCOUNT OF OTHER EXPENSES FOR VARIOUS ASSESSMENT YEARS. 15. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) . 16. THE LE ARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT DIARIES WERE FOUND WHICH RELATED TO ASSESSMENT YEARS 2003 - 04 TO 2008 - 09. HOWEVER, THE SAID DIARIES WERE NOT MAINTAINED IN ANY METHODOLOGICAL MANNER AND NO REGULAR CASH ENTRIES WERE MADE IN THE SAID DIARIES. ADMITTEDLY, THERE WAS NO CASH BOOK FOUND AND THE ASSESSEE ALSO HAD NOT MADE ANY DECLARATION UNDER SECTION 132(4) OF THE ACT . DURING THE COURSE OF SEARCH, CASH OF RS.2 LAKHS AND JEWELLERY OF 900 GRAMS WAS FOUND. THE ASSESSING OFFICER MA DE ENQUIRIES FROM THE BANK FROM WHOM LOANS WERE TAKEN FOR FINANCING OF AUTOS AND THE NUMBER OF LOANS BANK FROM WHOM LOANS WERE TAKEN FOR FINANCING OF AUTOS AND THE NUMBER OF LOANS SANCTIONED WERE WORKED OUT BY THE ASSESSING OFFICER. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STATED THAT THERE WAS NO DISPUTE ON NUMBER OF RIKSHAWS AGAINST WHICH LOANS WERE SANCTIONED. SH E FURTHER STATED THAT THE ORIGINAL RETURN OF INCOME WAS NOT ON THE BASIS OF REGULAR BOOKS OF ACCOUNT AS NO BOOKS OF ACCOUNT WERE MAINTAINED EXCEPT FOR ASSESSMENT YEAR 2008 - 09. SHE FURTHER STATED THAT THE IN COME OF ASSESSEE WAS COMMISSION INCOME AND WHILE ASSESSING THE INCOME IN THE HANDS OF ASSESSEE GROSS C OMMISSION COULD NOT BE ASSESSED, T HE EXPENSES HAD TO BE ALLOWED AND SHE STRESSED THAT ESTIMATION WAS ARBITRARY. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE DID NOT PRESS GROUND OF APPEAL NO.5 WHICH WAS IN RESPECT OF DISALLOWANCE OF BAD DEBTS OR LOSSES INCURRED BY THE ASSESSEE AS GUARANTOR OR SURETY. SHE FURTHER POINTED OUT THAT THE ISSUE RAISED IN ALL THE APPEALS WAS SAME I.E. THE FIRST ISSUE O F REOPENING OF ASSESSMENT AND THE SECOND ISSUE OF ESTIMATION OF INCOME. SHE FAIRLY POINTED OUT ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 12 THAT THE ISSUE RAISED ON RE - ASSESSMENT IS NOT PRESSED IN ANY OF THE YEAR BUT THE ISSUE OF ESTIMATION OF INCOME IS STRONGLY PRESSED IN ALL THE YEARS. 17. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACING RELIANCE ON THE ORDERS PASSED BY THE AUTHORITIES BELOW POINTED OUT THAT THE STATEMENT OF ASSESSEE WAS RECORDED DURING THE COURSE OF SEARCH AND THE ASSESSEE HAD GIVEN BREAK - UP OF EXPENSES ON WHICH BASIS THE ASSESSING OFFICER WORKED OUT THE NET COMMISSION IN THE HANDS OF ASSESSEE. THEN BEFORE THE ASSESSING OFFICER AND THE CIT(A), THE LIST OF ADDITIONAL EXPENSES WAS GIVEN AND IN THE ABSENCE OF ANY BOOKS OF ACCOUNT, THE CLAIM MADE BY THE ASSESSEE WAS REJECTED. HE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN CIT VS. CHETAN DAS LACHMAN DAS (2012) 25 TAXMANN.COM 227 (DELHI) , WHEREIN IT WAS HELD THAT WHERE THE ASSESSMENT IS TO BE MADE PURSUANT TO SEARCH AND SEIZURE OPERATIONS AT THE PREMISES OF ASSESSEE FOR THE ASSESSMENT YEARS COVERED UNDER SECTION 153A OF THE ACT, THEN THERE WAS NO CONDITION IN SECTION 153A OF THE ACT THAT THE ADDITION THE ACT, THEN THERE WAS NO CONDITION IN SECTION 153A OF THE ACT THAT THE ADDITION SHOULD STRICTLY BE MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF SEARCH AND POST SEA RCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER, WHICH COULD BE RELATED TO THE EVIDENCE FOUND. THE HONBLE HIGH COURT FURTHER HELD THAT THE SEIZED MATERIAL COULD ALSO BE RELIED ON TO DRAW INFERENCE THAT THERE COULD BE SIMILAR TRANSACTIONS THROUGHOUT THE PERIOD OF SIX YEARS COVERED BY SECTION 153A OF THE ACT. APPLYING THE SAID PROPOSITION, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT THE ADDITION MADE IN THE HANDS OF ASSESSEE IS JUSTIFIED. 18. WE HAVE HEARD THE RI VAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN SOLE PROPRIETARY BUSINESS OF PROVIDING SERVICES TO THE PROSPECTIVE BUYERS OF AUTO RIKSHAWS, WHEREIN THE SERVICES OF ASSESSEE INCLUDED SECURING LOANS FROM THE BANK AGAINST PURCHASE OF RIKSH AWS AND ALSO INSURANCE, ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 13 DELIVERY OF SAID RIKSHAWS TO THE INDIVIDUAL PURCHASERS AFTER INCURRING CERTAIN ITEMS OF EXPENDITURE. SEARCH AND SEIZURE OPERATIONS UNDER SECTION 132 OF THE ACT WERE CARRIED OUT AT THE PREMISES OF SHENDGE GROUP CASES ON 04.07.2007. CERTAIN DIARIES AND OTHER DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH AND THE ASSESSING OFFICER ON THE BASIS OF SAID EVIDENCE ESTIMATED THE COMMISSION INCOME AT RS.7,023/ - PER VEHICLE. THE ASSESSEE EXPLAINED THAT IT HAD INCURRED TWO TYPES OF EXPENDI TURE I.E. FIRST CATEGORY OF EXPENDITURE WHICH TOTALED TO RS.3,900/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED THAT CERTAIN ADDITIONAL EXPENSES WERE ALSO INCURRED. THE ASSESSEE ADMITS THAT NUMBER OF VEHICLES WORKED OUT BY THE ASSE SSING OFFICER ON THE BASIS OF INFORMATION SUPPLIED BY THE BANK AND OTHER DOCUMENTARY EVIDENCE WAS CORRECT. HENCE THE SAME IS TO BE APPLIED IN ORDER TO WORK OUT THE COMMISSION IN THE HANDS OF ASSESSEE. THE ASSESSEE WAS NOT MAINTAINING REGULAR BOOKS OF ACC OUNT EXCEPT FOR MAINTAINING A DIARY IN WHICH CERTAIN EXPENSES WERE WRITTEN. THE QUESTION WHICH ARISES FOR ADJUDICATION BEFORE US IS THE ESTIMATION OF INCOME IN THE HANDS OF ASSESSEE , W HERE THE NUMBER OF VEHICLES PROCESSED BY THE ASSESSEE FOR THE PURPOSE O F OBTAINING LOAN IS ACCEPTED AS SUCH . 19. T HE NEXT STEP IS THE EXPENDITURE TO BE ALLOWED IN THE HANDS OF ASSESSEE. DURING THE COURSE OF SEARCH, CERTAIN EVIDENCES WERE FOUND ON ACCOUNT OF EXPENDITURE INCURRED BY THE ASSESSEE WHICH RELATED TO ASSESSMENT YEARS 2006 - 07 AND 2008 - 09 . ON THE BASIS OF THE SAID EVIDENCE FOUND, THE ASSESSING OFFICER HAD ALLOWED THE EXPENSES ONLY TO THE EXTENT OF EVIDENCE FOUND. HOWEVER, THE CIT(A) IN RESPECT OF FIRST CATEGORY OF EXPENSES ALLOWED THE CLAIM OF ASSESSEE @ RS.3,900 / - PER RIKSHAW. THE SAID EXPENSES WERE ALLOWED IN THE HANDS OF ASSESSEE FOR ASSESSMENT YEARS 2005 - 06 TO 2008 - 09 . FOR THE EARLIER YEARS 2001 - 02 TO 2004 - 05 , EXPENDITURE @ 40% OF COMMISSION INCOME WAS ALLOWED WHICH ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 14 WORKED OUT TO RS.2,809/ - IN ASSESSMENT YEA RS 2001 - 02 TO 2003 - 04 AND RS.2,864/ - FOR ASSESSMENT YEAR 2004 - 05. THE SECOND CLAIM OF ASSESSEE WAS IN RESPECT OF OTHER EXPENSES I.E. NON - ALLOWANCE OF LOSSES SUFFERED BY THE ASSESSEE IN SOME OF DEALS, NON - ALLOWANCE OF OTHER EXPENSES AND PAYMENTS TO COMMISS ION AGENTS. IN THE FIRST INSTANCE, THE ASSESSEE BY WAY OF GROUND OF APPEAL NO.5 HAD RAISED THE ISSUE AGAINST DISALLOWANCE OF BAD DEBTS OR LOSSES INCURRED BY THE ASSESSEE AS GUARANTOR OR SURETY. THE ASSESSEE HAS NOT PRESSED THE SAID GROUND OF APPEAL AND H ENCE, THE SAME IS DISMISSED AS NOT PRESSED. 20. THE LIMITED PLEA BEFORE US WAS THAT THE NET AVERAGE PROFIT TO BE ASSESSED IN THE HANDS OF ASSESSEE BY ALLOWING OTHER EXPENSES SHOULD BE RE - COMPUTED. AFTER THE ORDER OF CIT(A) AND ALLOWING OF DEDUCTION ON ACCOUNT OF FIRST CATEGORY OF EXPENSES, THE AVERAGE PROFIT FOR THE RESPECTIVE YEARS WORKS OUT AS UNDER : - NO. OF RICKS AS NO. OF RICKS AS AVERAGE PROFIT AS DEDUCTIONS ALLOWED BY AVERAGE PROFIT AFTER INCOM E AFTER A Y RICKS AS PER BANK RICKS AS PER SEIZED MATERIAL PROFIT AS PER AO ALLOWED BY CIT(A) PROFIT AFTER CIT(A) AFTER CIT(A) ORDER A Y 2001 - 02 275 0 7023/ - 2809/ - 4214/ - 11,11,670/ - 2002 - 03 119 0 7023/ - 2809/ - 4214/ - 4,89,980/ - 2003 - 04 271 26 7023/ - 2809/ - 4214/ - 12,14,340/ - 2004 - 05 215 15 7161/ - 2864/ - 4297/ - 9,57,332/ - 2005 - 06 240 37 9571/ - 3900/ - 56 71/ - 13,51,773/ - 2006 - 07 479 133 8888/ - 3900/ - 4988/ - 21,22,682/ - 2007 - 08 498 411 10564/ - 3900/ - 6664/ - 27,27,162/ - 2008 - 09 350 12 13524/ - 3900/ - 9624/ - 23,64,223/ - 2 1 . THE ASSESSEE STATES THAT AS AGAINST THE INCOME DECLARED IN RETURN S OF INCOME OF R S.32,32,963/ - FOR THE CAPTIONED ASSESSMENT YEARS I.E. 2001 - 02 TO 2008 - 09, THE NET INCOME AFTER THE ORDER OF CIT(A) WORKS OUT TO RS. 1,23,39,160/ - WHICH ESTIMATION IS VERY HIGH IN THE HANDS OF ASSESSEE. THE FIRST OBJECTION RAISED BY THE ASSESSEE IS AGAINST THE ESTIMATION OF COMM ISSION INCOME ON AVERAGE PROFIT, AS PER THE ASSESSING OFFICER AT RS.7,023/ - FOR THE INSTANT ASSESSMENT YEAR. THE ASSESSEE POINTED OUT THAT THE SAID ESTIMATION EVEN ON THE BASIS OF SEIZED DIARY ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 15 FOUND DURING THE COURSE OF SEARCH WAS HI GHER SINCE THE SEIZED DIARY ITSELF REVEAL S THAT THE SAME WAS LESS THAN THE ESTIMATION MADE BY THE ASSESSING OFFICER. THE SECOND CLAIM MADE BY THE ASSESSEE WAS IN NOT ALLOWING RS.3,900/ - AS DEDUCTION FOR EARLIER YEARS AND IN RESTRICTING THE SAME TO RS.2,80 9/ - AND RS.2,864/ - . THE ISSUE BY WAY OF GROUND OF APPEAL NO.5 I.E. DISALLOWANCE OF BAD DEBTS OR LOSSES INCURRED BY THE ASSESSEE AS GUARANTOR OR SURETY AT NIL WAS NOT PRESSED AND HENCE, THE CLAIM OF ASSESSEE OF OTHER EXPENSES DOES NOT SURVIVE. THE BASIS F OR ADOPTING AVERAGE PROFIT PER VEHICLE AT RS.7,023/ - BY THE ASSESSING OFFICER WAS ON THE BASIS OF ENTRIES IN THE DIARIES / SEIZED DOCUMENTS FOR ASSESSMENT YEAR 2003 - 04 . THE ASSESSING OFFICER HAD RECEIVED INFORMATION IN RESPECT OF 26 PROPOSALS ARRANGED WHE REIN THE TOTAL PROFIT WORKED OUT TO RS. 1,82,600/ - AND THE AVERAGE PROFIT PER VEHICLE WAS DETERMINED AT RS.7,023/ - . FURTHER, IN ASSESSMENT YEAR 2004 - 05 ON THE BASIS OF SIMILAR EVIDENCE, THE AVERAGE PROFIT WAS TAKEN AT RS. 7,161/ - , IN ASSESSMENT YEAR 2005 - 06 , AVERAGE PROFIT AT RS. 9,571/ - , IN ASSESSMENT YEAR 2006 - 07 OF RS. 8,888/ - WAS APPLIED. THE AVERAGE PROFIT DETERMINED FOR ASSESSMENT YEAR 2003 - 04 WAS APPLIED FOR ASSESSMENT YEARS 2001 - 02 AND 2002 - 03 ALSO. THE ASSESSING OFFICER COMPUTED THE INCOME BY APPLYI NG THE AVERAGE PROFIT PER RIKSHAW AS NET COMMISSION AND NO FURTHER EXPENSES WERE ALLOWED IN THE HANDS OF ASSESSEE. HOWEVER, THE CIT(A) ALLOWED THE DEDUCTION ON ACCOUNT OF FIRST CATEGORY OF EXPENSES AND NO DEDUCTION WAS ALLOWED ON ACCOUNT OF SECOND CATEGOR Y OF EXPENSES. THE ESTIMATION OF EARNINGS BY THE ASSESSEE IS BASED ON THE MATERIAL FOUND FROM THE POSSESSION OF ASSESSEE IN ASSESSMENT YEAR 2003 - 04 FOR SOME OF THE VEHICLES AND IN VIEW OF THE EVIDENCE FOUND DURING THE COURSE OF SEARCH, THE ESTIMATION WORK ED OUT BY THE ASSESSING OFFICER MERITS TO BE APPLIED. HOWEVER, TO MEET THE ENDS OF JUSTICE AND KEEPING IN MIND THE FACT THAT ON THE BASIS OF DOCUMENTS SEIZED, THE ESTIMATION FOR ASSESSMENT YEAR 2006 - 07 AT RS.8,888/ - IS LOWER THAN THE ESTIMATION FOR ASSESS MENT YEAR 2005 - 06 AT RS. 9,571/ - WHICH IS NOT ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 16 POSSIBLE. KEEPING IN MIND THE PRINCIPLES OF NATURAL JUSTICE, WE DIRECT THE ASSESSING OFFICER TO ADOPT THE AVERAGE PROFIT PER RIKSHAW IN THE HANDS OF ASSESSEE IN ASSESSMENT YEARS 2001 - 02 TO 2003 - 04 @ RS.6000/ - , FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 , THE SAME MAY BE ADOPTED @ RS.6,500/ - AND FOR ASSESSMENT YEARS 2006 - 07 TO 2008 - 09 @ RS.7,000/ - PER VEHICLE. 2 2 . COMING TO THE DEDUCTION TO BE ALLOWED ON ACCOUNT OF FIRST CATEGORY EXPENSES, THE SAME MAY BE ALLOWED @ RS.3,200/ - IN ASSESSMENT YEARS 2001 - 02 TO 2004 - 05 AND THEREAFTER @ RS.3,900/ - AS ALLOWED BY THE CIT(A). THUS, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE INCOME IN THE HANDS OF ASSESSEE. THE GROUNDS OF APPEAL NO.3 AND 4 RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED AND THE GROUND OF APPEAL NO.5 IS DISMISSED AS NOT PRESSED. 2 3 . IN ASSESSMENT YEAR 2002 - 03 , THE GROUND S OF APPEAL NO.1 AND 4 RAISED BY THE ASSESSEE ARE NOT PRESSED. THE GROUND S OF APPEAL NO.2 AND 3 ARE AGAINST THE THE ASSESSEE ARE NOT PRESSED. THE GROUND S OF APPEAL NO.2 AND 3 ARE AGAINST THE ESTIMATION OF CO MMISSION @ 7,023/ - PER VEHICLE AND IN RESTRICTING THE FIRST CATEGORY OF EXPENSES AT RS.2,809/ - . THE ISSUE RAISED IN ITA NO.933/PN/2012 IS IDENTICAL TO THE ISSUE IN ITA NO.932/PN/2012 VIDE GROUNDS OF APPEAL NO.3 AND 4 AND FOLLOWING THE SAME, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE INCOME. 2 4 . IN ASSESSMENT YEAR S 2003 - 04 AND 2004 - 05, THE GROUNDS OF APPEAL NO.1 AND 2 ARE IDENTICAL TO THE GROUNDS OF APPEAL NO.3 AND 4 IN ITA NO.932/PN/2012 AND FOLLOWING THE SAME PARITY OF REASONING, THE ASSESSING O FFICER IS DIRECTED TO RE - COMPUTE THE INCOME IN THE HANDS OF ASSESSEE . THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 17 2 5 . COMING TO ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 , THE GROUND OF APPEAL NO.2 RAISED IS NOT PRESSED AND HENCE THE SAME ARE DISMISSED AS NOT PRESSED. THE GROUND OF APPEAL NO.1 IS AGAINST THE ESTIMATION OF COMMISSION INCOME AT RS.9,571/ - WHICH IS IDENTICAL TO THE GROUND OF APPEAL NO.3 IN ITA NO.932/PN/2012 AND FOLLOWING THE SAME PARITY OF REASONING, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE INCOME IN THE HANDS OF ASSESSEE. 2 6 . IN ASSESSMENT YEAR 2007 - 08 , THE GROUNDS OF APPEAL NO.1 AND 2 ARE AGAIN ST ESTIMATION OF COMMISSION AT AN AVERAGE PROFIT IS IDENTICAL TO THE ISSUE VIDE GROUND OF APPEAL NO.3 IN ITA NO.932/PN/2012 AND FOLLOWING THE SAME PARITY OF REASONING, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE INCOME IN THE HANDS OF ASSESSEE. TH E GROUND OF APPEAL NO.3 IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 2 7 . IN ASSESSMENT YEAR 2008 - 09, THE ISSUE VIDE GROUND OF APPEAL NO.1 IS IDENTICAL TO THE GROUND OF APPEAL NO.3 IN ITA NO.932/PN/2012 AND FOLLOWING THE SAME PARITY OF R EASONING, THE ASSESSING OFFICER IS DIRECTED TO RE - COMPUTE THE INCOME IN THE HANDS OF ASSESSEE. THE GROUND OF APPEAL NO. 2 IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 2 8 . BEFORE PARTING, WE MAY ALSO REFER TO THE RELIANCE PLACED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, WHEREIN THE HONBLE DELHI HIGH COURT HAS HELD THAT THE ADDITION COULD BE MADE ON THE BASIS OF EVIDENCE FOUND DURING THE COURSE OF SEARCH TO DRAW INFERENCE THAT SIMILAR TRANSACTION HAD TAKEN PLACE THR OUGHOUT THE PERIOD OF SIX YEARS COVERED BY SECTION 153A OF THE ACT. IN VIEW OF OUR UPHOLDING THE ESTIMATION OF INCOME IN THE HANDS OF ASSESSEE IN ALL ITA NO S . 932 TO 939 / PN /201 2 ARUN G ANPAT SHENDGE 18 THE YEARS UNDER APPEAL, THE SAID RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IS RELIED ON TO ADJUDICA TE THE ISSUE. WE FIND SUPPORT FROM THE SAME. 2 9 . IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 21 ST DAY OF NOVEMBER , 201 6 . SD/ - SD/ - ( R.K. PANDA ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 21 ST NOVEMBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 2. / THE RESPONDENT; 3. ( ) / THE C I T (A) - CENTRAL , PUNE ; 4. / THE C I T , CENTRAL , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE