Ashish Shivkumar Goyal, Pune V. Deputy Commissioner of Income-tax, Circle - 5, Pune

ITSSA 01/PUN/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3885 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 01-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PAVAN KUMAR CHAKRAPANI
• Keywords: Unexplained investment; Income from undisclosed sources; Loose papers; Peak credit
• Section: 143(3); 153A; 234B; 145

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / IT(SS) NOS.01 TO 04/PUN/2018 / ASSESSMENT YEARS :2012-13 TO 2015-16 SHRI ASHISH SHIVKUMAR GOYAL, S.NO.17/2A, NEW ERA SOCIETY, MARKET YARD, PUNE 411 037. PAN : AMDPG7263J. . / APPELLANT V/S DY. COMMISSIONER OF INCOME TAX, CIRCLE 5, PUNE. . / RESPONDENT ASSESSEE BY : SHRI PAVAN KUMAR CHAKRAPANI REVENUE BY : SHRI ACHAL SHARMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THESE FOUR APPEALS FILED BY THE ASSESSEE ARE EMANAT ING OUT OF SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) 4, PUNE DT.14.07.2017 FOR A.YS. 2012-13 TO 2015-16. 2. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THOUGH THE APPEALS OF THE ASSESSEE ARE AGAINST THE ORDERS OF COMMIS SIONER OF INCOME TAX (A)-4, PUNE FOR DIFFERENT ASSESSMENT YEARS BU T THE ISSUES INVOLVED IN THE ASSESSMENT YEARS 2012-13 AND 2013-14 A RE IDENTICAL EXCEPT FOR THE AMOUNTS INCLUDED IN EACH OF THE YEARS, TH EREFORE, HIS ARGUMENTS WILL ALSO BE COMMON FOR BOTH THE APPEALS. LD. D .R. DID NOT / DATE OF HEARING : 07.06.2018 / DATE OF PRONOUNCEMENT: 03.08.2018 2 OBJECT TO THE AFORESAID SUBMISSION OF LD.A.R. IN VIEW OF THE AFORESAID CONTENTION, THE APPEALS FOR A.YS. 2012-13 AND 2013-14 AR E TAKEN UP TOGETHER. BUT HOWEVER, FOR THE SAKE OF CONVENIENCE, W E PROCEED WITH NARRATING THE FACTS FROM A.Y. 2012-13. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- THE ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN TH E TRADING OF GROCERY, SPICES AND DRY FRUITS AND HAVING INCOME FROM OT HER SOURCES. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2012-13 ON 26.09 .2012 DECLARING TOTAL INCOME OF RS.7,15,784/-. AO HAS NOTED THAT ON 06.04.2014 A HYUNDAI VERNA VEHICLE WAS INTERCEPTED BY THE POLICE AUTHORITIES AND IT FOUND CASH OF RS.50,21,340/-, THREE DIARIES AND CERTAIN LOOSE PAPERS IN THE VEHICLE. AS NO SATISFACTORY EX PLANATION WAS FORTHCOMING FROM THE DRIVER OF THE VEHICLE, THE CASH WAS SE IZED BY THE POLICE AUTHORITIES. THE INCHARGE OF BIBWEWADI POLICE STATION, P UNE, INFORMED THE INCOME TAX AUTHORITIES ABOUT THE SEIZURE OF CASH. DURING THE COURSE OF PRELIMINARY INQUIRY, IT WAS NOTED THAT THE VEHICLE BELONGED TO THE ASSESSEE, WHO IS A PROPRIETOR OF M/S. SHANTI SALE S CORPORATION. STATEMENT OF ASSESSEE WAS RECORDED ON 07.04.2014 WHERE IN HE ADMITTED THAT THE CASH, DIARIES AND LOOSE PAPERS BELONGED TO HIS P ROPRIETARY CONCERN I.E., M/S. SHANTI SALES CORPORATION. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION ABOUT THE SOURCE OF CASH, DIARIES AND LOOSE PAPERS WERE SEIZED BY THE DEPARTMENT. THEREAFTER, NOTIC E U/S 153A OF THE ACT WAS ISSUED TO ASSESSEE ON 20.01.2015 AND IN RE SPONSE TO AFORESAID NOTICE ASSESSEE FILED RETURN OF INCOME ON 12.03.20 15 DECLARING TOTAL INCOME OF RS.8,87,041/-. THEREAFTER, THE CASE WAS TA KEN UP FOR SCRUTINY AND ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 153 A OF THE ACT VIDE ORDER DT.30.12.2016 AND THE TOTAL INCOME WAS DETERMIN ED AT 3 RS.40,16,830/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CA RRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.14.07.2017 (IN APPE AL NO.PN/CIT(A)-4/DCIT, CIRCLE-5, PUNE/412/2016-17) DISMISSED T HE APPEAL OF ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), THE A SSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1.THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROB ABILITIES AND THE FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESS ED FOR AN AMOUNT BEING RS. 40,16,834/-, AS AGAINST THE RETURNED INCOME OF AN AMOUNT BEING RS. 8,87,041/-, UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE. 3. WHETHER THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN MAKING AN ADDITION OF AIL AMOUNT BEING RS. 31,29,793/-, AS UNACCOUNTED INVESTMENT IN PURCHASES AND UNACCOUNTED SEED CAPITAL, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. WHETHER THE AUTHORITIES BELOW OUGHT TO HAVE APPR ECIATED THE FACT, THAT AMOUNT BEING RS. 31,29,793/-, IS THE DIFFERENCE BETWEEN THE UNACCOUNTED SALES AND COLLECTIONS, THE SALES RECEIPTS WERE ALRE ADY INCORPORATED IN THE SALES SHOWN IN THE PROFIT AND LOSS ACCOUNTS AND GRO SS PROFIT ARRIVED ON TOTAL SALES, NOW ADDING THE AMOUNT OF RS. 31,29,793/-, IS DOUBLE ADDITION, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WHETHER THE AUTHORITIES BELOW ARE CORRECT IN MAK ING AN ADDITION OF RS. 31,29,793/-, EVEN WHEN THE GROSS PROFIT OF RS. 1,71 ,257/-, IS INCLUDED IN THE TOTAL INCOME OF RS. 8,87,041/-,, DECLARED IN TH E RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT, U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT, ONLY GROSS PROFIT ON THE SALES OF RS. 37,34,941/-, HAVE TO CON SIDERED AS INCOME, WHEN THE AUTHORITIES BELOW HAVE AGREED THAT THE AMOUNT O F RS. 37,34,941/-, ARE UNACCOUNTED SALES, UNDER THE FACTS AND CIRCUMSTANCE S OF THE CASE. 7. WHETHER THE AUTHORITIES BELOW ARE JUSTIFIED IN R EJECTING THE BOOKS OF ACCOUNTS WHEN THERE IS NO DEFECT IN THE BOOKS OF AC COUNTS AS PER THE PROVISION OF SECTION 145 OF THE ACT, UNDER THE FACT S AND CIRCUMSTANCES OF THE CASE. 8. WHETHER THE AUTHORITIES BELOW ARE JUSTIFIED IN S TATING THAT THE ACCOUNTED AND UNACCOUNTED BUSINESS ACTIVITIES ARE SEPARATE, E VEN WHEN THE APPELLANT HAS ADMITTED THAT THE TRANSACTIONS PERTAI N TO THE PROPRIETARY BUSINESS OF THE APPELLANT, UNDER THE FACTS AND CIRC UMSTANCES OF THE CASE. 9. WITHOUT PREJUDICE TO THE ABOVE, WHETHER THE AUTH ORITIES BELOW ARE JUSTIFIED IN NOT CONSIDERING THE CASH BALANCE OF RS . 24,75,894/-, APPEARING IN THE BOOKS OF ACCOUNTS OF THE APPELLANT, UNDER TH E FACTS AND CIRCUMSTANCES OF THE CASE. 10. THE LEARNED AUTHORITIES BELOW FAILED TO CONSIDE R THE CIRCULAR NO. 14, DATED 11.04.1955 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 11. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER A S PER THE PARITY OF REASONING OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR 4 SINGH 349 ITR 692, THE APPELLANT DENIES ITSELF LIABLE TO BE C HARGED TO INTEREST UNDER SECTION 234A, 234B & 234C OF THE INC OME TAX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. WITHOUT PREJUDICE THE PROVISIONS OF SECTION 234 B [3] OF THE ACT IS APPLICABLE AS PER WHICH INTEREST UNDER SECTION 234 B OF THE ACT CAN BE CALCULATED ONLY FROM THE DATE OF 143[1] OR FROM THE DATE OF ORDER OF ASSESSMENT. IN THE INSTANT CASE THERE WAS AN INTIMA TION UNDER SECTION 143[1] OF THE ACT ON 26/03/2010, ONLY FROM SUCH DAT E IF AT ALL ANY INTEREST TO BE CALCULATED TO BE RECKONED. 13. WITHOUT PREJUDICE THE LEVY OF INTEREST UNDER SE CTION 234 A, 234 B & 234 C OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND METHOD' OF CALCULATION ADOPTED ON WHICH INTEREST IS LEVIED ARE ALL NOT DISCERNABLE AND ARE WRONG ON THE FACTS OF THE CASE . 4. BEFORE US, LD.A.R. FOR THE ASSESSEE SUBMITTED THAT S IMILAR GROUNDS HAVE BEEN RAISED FOR A.Y. 2013-14. 5. AT THE TIME OF HEARING, IT WAS POINTED TO THE LD.A.R. TH AT THE GROUNDS RAISED BY THE ASSESSEE ARE DESCRIPTIVE AND ARE NOT AS PER THE MANDATE OF ITAT RULES, TO WHICH ASSESSEE INTER-ALIA SUBMIT TED THAT THE SOLE CONTROVERSY WHICH IS TO BE DECIDED IS WITH RESPECT T O THE ADDITION OF RS.31,29,793/- MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT S FOR PURCHASES AND THE REJECTION OF BOOKS OF ACCOUNT. WE T HEREFORE PROCEED TO DECIDE THE AFORESAID ISSUE. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTE D THAT ON EXAMINATION OF LOOSE PAPERS AND DIARIES SEIZED BY THE DEPA RTMENT, THE DETAILS OF UNACCOUNTED CASH SALES AND UNACCOUNTED CASH COLLECTION WAS FOUND. WHEN THE ASSESSEE WAS CONFRONTED WITH THE DIARIES AND LOOSE PAPERS, HE ADMITTED THAT NONE OF THE ENTRIES IN THE DIARIE S WERE RECORDED AND THE AMOUNT FOUND IN THE NOTINGS WAS UNACCOUNTED C ASH SALES AND UNACCOUNTED AMOUNT REALIZED FROM VARIOUS CUSTOMERS. HE ALSO ADMITTED THE UNACCOUNTED CASH SALES AND THE RESULTANT UNACCOUNTED INCOME. AO THEREFORE HELD THAT UNACCOUNTED TRANSACTION S OF SALES AS ADMITTED BY THE ASSESSEE, PROVED THAT THE BOOK RESULT SHOWN BY THE 5 ASSESSEE WERE NOT RELIABLE AND ACCORDINGLY, HE REJECTE D THE BOOKS OF ACCOUNT U/S 145 OF THE ACT. THEREAFTER, THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE ENTIRE UNACCOUNTED SALES NOT BE T REATED AS UN- ACCOUNTED INCOME OF THE ASSESSEE. IN RESPONSE ASSESSE E INTER-ALIA SUBMITTED THAT PEAK OF UNACCOUNTED CASH COLLECTIONS AND UNACCOUNTED CASH SALES WAS DRAWN FROM DAY-TO-DAY COLLECTION AND THE HIGHEST PEAK DURING THE YEAR UNDER CONSIDERATION WAS ON 31.03.2012 A T RS.31,29,793/- WHICH REPRESENTS UNSUPPORTED SALES OR UNA CCOUNTED PORTION OF PURCHASES. HE THEREFORE SUBMITTED THAT RS.31 ,29,793/- MAY BE TREATED AS UNACCOUNTED PORTION OF PURCHASES FOR MAK ING UNACCOUNTED SALES FOR THE YEAR. ASSESSEE ALSO SUBMITTE D THAT THE SET OFF OF CASH BALANCE OF RS.24,75,894/- THAT WAS AVAILABLE AS PER THE BOOKS OF ACCOUNTS AS ON 31.03.2012 BE CONSIDERED AS BEING AVAILABLE FOR MAKING UNACCOUNTED PURCHASES AND THEREFORE THE CREDIT OF SAM E BE GIVEN. ASSESSEE ALSO REQUESTED THAT THE G.P. OFFERED BY HIM TO B E EXCLUDED WHILE COMPLETING THE ADDITION AS IT WOULD AMOUNT TO DOUBLE T AXATION. AO HELD THAT THE SET OFF OF CASH BALANCE AVAILABLE IN THE RE GULAR BOOKS CANNOT BE GRANTED BECAUSE ACCOUNTED AND UNACCOUNTED ACTIVITIES ARE SEPARATE ACTIVITIES WHICH CANNOT BE MERGED AND FURTHER N O EVIDENCE HAS BEEN FURNISHED TO ESTABLISH THAT THE CASH AVAILABLE AS PER BOOKS OF ACCOUNT ON A PARTICULAR DAY WAS UTILIZED FOR THE PURPOS E OF MAKING UNACCOUNTED PURCHASES. HE FURTHER HELD THAT THE PEAK OFFERED TO TAX BY ASSESSEE DOES NOT INCLUDE ELEMENT OF PROFIT BUT IS IN RESPE CT OF UNACCOUNTED INVESTMENT IN PURCHASES ONLY. AO THEREFORE , AFTER REJECTING THE BOOKS OF ACCOUNT, TREATED THE PEAK OF RS.3 1,29,793/- AS INVESTMENT IN PURCHASES AND UNACCOUNTED SEED CAPITAL FO R MAKING UNACCOUNTED SALES AND MADE THE ADDITION. AGGRIEVED BY T HE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), WHO CONFIRME D THE ORDER OF AO BY HOLDING AS UNDER : 6 5.3.2 I HAVE CAREFUL LY CONSIDERED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND SUBMISSIONS MADE BY THE LD. AR. NO DOUBT, THE APPELLANT WAS MAKING HUGE UNACCOUNTED SALES & PURCHASES FOR MANY YEARS WHICH WERE, DULY RECORDED IN THE 3 DIARIES SEIZED BY THE POLICE DEPARTMENT DURING THE COURSE OF PATROLLING. NEEDLESS TO EMPHASIZE THAT TH E APPELLANT HAD BEEN DODGING TAX FOR THOSE MANY YEARS. THE ENTRIES IN TH E DIARIES SUFFICIENTLY PROVE THAT THE UNACCOUNTED SALES WERE METICULOUSLY RECORDED BUT NOT THE PURCHASES. THEREFORE, THE GP WAS WORKED FOR THE ENT IRE TRANSACTIONS AND R /I WAS FILED SHOWING THE INCOME, THEREOF. IN PRINCI PLE, THE APPELLANT AGREED WITH THE WORKING OF PEAK PURCHASE FROM THE U NACCOUNTED SALES BY THE AO DURING THE ASSESSMENT PROCEEDING. THE APPELLANT ALSO REQUESTED TO SET OFF THE P REVIOUS YEARS PEAK PURCHASE WHICH THE AO AGREED AND GAVE SET OFF. THEREFORE, THERE IS NO ISSUE LEFT WITH THE APPELLAN T TO CONTEST. THE AO HAS CORRECTLY ARRIVED AT THE PEAK PURCHASE AND MADE ADD ITION AS UNACCOUNTED INVESTMENTS. THE DETAILED REASONS OF THE FINDINGS O F THE AO IS FOUND IN PARA 12-14, AFTER GIVING D UE CONSIDERATION TO THE SUBMISSIONS MADE BY THE APPELLANT. INCIDENTALLY, THE A PPELLANT HAD NOT CONTESTED THE PEAK PURCHASE ARR IVED AT BY THE AO DURING THE ASSESSMENT PROCEEDING. HE CANNOT TAKE DIFFERENT STAND BEFORE THE APPELLATE PROCEEDING. TH E AO RIGHTLY DENIED CONSIDERING SO CALLED CASH BALANCE AVAILABLE BY HOL DING THAT 'THE ASSESSEE HAD NOT PROVIDED ANY EVIDENCE WHICH ESTABLISHED THAT TH E CASH AVAILABLE ON PARTICULAR DATE WITH REGULAR B OOKS OF ACCOUNT WERE UTILIZED FOR THE PURPOSE OF MA K ING UNACCOUNTED PURCHASES. FURTHER, THE ACCOUNTED A ND UNACCOUNTED BUSINESS ACTIVITIES ARE SEPARATE ACTIVI TIES WHICH CANNOT BE MERGED WITH EACH OTHER WITHOUT HAVING CONCRETE EVID ENCES'. THE APPELLANT BEING HABITUAL TAX DODGER, WITHOUT THE PROPER EVIDE NCE, THE AO CANNOT TAKE O THER VIEW THAN WHAT HE HAD ARRIVED AT IN THE ASSESS MENT ORDER. THE APPELLANT MUST DEMONSTRATE THE CONNECTION/LINK OF C ASH AVAILABLE IN THE PREVIOUS YEAR WAS INVESTED FOR PURCHASE OF UNACCOUN TED SALES. LOGICALLY ALSO IT DOES NOT MATCH THAT UNACCOUNTED PURCHASES H AS CONNECTION TO THE SO CALLED CASH AVAILABLE IN THE ACCOUNT AT THE YEAR END BECAUSE THE APPELLANT MUST HAVE USED SUCH CASH FOR OTHER THAN PURCHASES AND SUCH FINDINGS CANNOT BE IGNORED CONSIDERING THE FACTS TH AT THE CONDUCT OF THE APPELLANT HAS BEEN A TAX-EVA D ER FOR MANY YEARS TILL HE IS CAUGHT. IN THESE CIRCUMSTANCES, I DON'T FIND MERIT IN THE CONTENTION OF THE LD. AR. THE HABITUAL TAX DODGER APPELLANT CANNOT EAT AND HAVE T OO. THEREFORE, I DON'T FIND ANY GROUND TO INTERFERE IN THE FINDINGS OF THE AO. THUS, THIS GROUND OF APPEAL IS DISMISSED. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND CIT(A) AND FURTHER SUBMITTED THAT WHEN THE AO HAS ACCEP TED THE FACT THAT THE ENTRIES IN THE DIARIES CONTAINING UNACCOUNTED CA SH SALES AND CASH COLLECTIONS FROM SALE OF PRODUCTS, THEN HE WAS NOT J USTIFIED IN MAKING THE ADDITION AS UNACCOUNTED PURCHASES. HE FURTH ER SUBMITTED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF SURMISE S AND SUSPICION WITHOUT ANY COGENT EVIDENCE THAT THE PURCHASES WERE M ADE FROM UNDISCLOSED SOURCES. HE SUBMITTED THAT THE AMOUNT UTILIZE D FOR THE 7 PURPOSE OF MAKING PURCHASES AND THE PRODUCTS SOLD TO VARIOUS CUSTOMERS WERE ACCOUNTED IN THE DIARIES AND WERE PURCH ASED OUT OF THE CASH AVAILABLE FROM THE BOOKS OF ACCOUNT. HE FURTHER SUBM ITTED THAT THE WORKING OF THE PEAK IS INCORRECT AS AO HAD ONLY REDUCE D THE AMOUNT OF RS.6,05,148/- AGAINST THE CASH SALES OF RS.37,34,941/- AND A RRIVED AT A PEAK DIFFERENCE OF RS.31,29,793/-. HE THEREFORE SUBMITTED TH AT THE CASH BALANCE AVAILABLE IN REGULAR BOOKS SHOULD BE CONSIDERED AND ANY CREDIT LEFT AFTER ADJUSTING CASH BALANCE SHOULD ONLY BE CONSIDE RED AS UNACCOUNTED INCOME. LD.A.R. FURTHER SUBMITTED THAT THE ADDITION BE MADE ONLY TO THE EXTENT OF NEGATIVE CASH BALANCE WHICH IS TO THE EXTENT OF RS.4.89 LACS. 8. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO . HE FURTHER POINTED TO THE ASSESSEES LETTER TO AO WHICH HAS BEEN R EPRODUCED AT PAGES 6 TO 8 OF THE ASSESSMENT ORDER, WHEREIN THE PEAK WORKING MADE BY THE ASSESSEE HAS BEEN ACCEPTED BY THE AO. HE THE REFORE SUBMITTED THAT THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE REJECTION OF BOOKS OF ACCOUNT AND THEREAFTER MAKING ESTIMATE OF INCOME . IT IS AN UNDISPUTED FACT THAT CASH OF RS.50,21,340/- ALONG WITH VAR IOUS LOOSE PAPERS WERE SEIZED FROM THE VEHICLE BELONGING TO THE ASS ESSEE. ASSESSEE IN THE STATEMENT HAD ADMITTED THAT NOTINGS IN THE DIARY TO BE DETAILS OF UNACCOUNTED CASH SALES AND UNACCOUNTED CASH COLLECTIONS . IN SUCH A SITUATION, WE FIND NO INFIRMITY IN THE ORDER OF AO FOR REJECTING THE BOOKS OF ACCOUNTS OF ASSESSEE. WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOUR CE OF PURCHASES WHICH THE AO HAS NOTED THAT ASSESSEE HAS FAILED TO EXPLA IN. WE FURTHER 8 FIND THAT THE ASSESSEE HAD HIMSELF PREPARED CHART OF CASH COLLECTION AND SALES ON DAY-TO-DAY BASIS ALONG WITH CUMULATIVE CASH SALE S ON DAY-TO- DAY BASIS. WITH RESPECT TO THE TRANSACTIONS NOTED IN TH E DIARY SEIZED AND ON THE BASIS OF THOSE DETAILS IT WAS NOTED THAT THERE W ERE SALES OF RS.37,34,941/- AGAINST WHICH THE COLLECTION OF CASH FROM CUST OMERS WERE RS.6,05,148/- AND ON 31.03.2012 THERE WAS A PEAK DIFFERENCE OF RS.31,29,793/-. THE WORKING OF PEAK DIFFERENCE SUBMITTED BY THE ASSESSEE WAS ACCEPTED BY THE AO. ONCE THE AO HAS AC CEPTED THE WORKING OF PEAK AS FURNISHED BY THE ASSESSEE, WE ARE OF T HE VIEW THAT THE ASSESSEE HAS NO REASON TO ASSAIL THE ADDITIONS MADE BY AO WHICH HAVE SEEN CONFIRMED BY THE CIT(A) IN TOTO. BEFORE US, EX CEPT FOR SAID ASSERTIONS, NO MATERIAL HAS BEEN PLACED ON RECORD BY TH E ASSESSEE TO CONTROVERT THE FINDINGS OF LOWER AUTHORITIES. IN VIEW OF TH ESE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A), A ND THUS THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED FOR A.Y. 2012-13. 11. AS FAR AS THE GROUNDS RAISED BY THE ASSESSEE IN IT(S S)A NO.02/PUN/2018 FOR A.Y. 2013-14 ARE CONCERNED, SINCE THE FACTS AND ISSUE OF THE CASE IN IT(SS)A NO.1/PUN/2018 FOR A.Y. 2012-1 3 ARE IDENTICAL TO THE FACTS AND ISSUE OF THE CASE IN IT(SS)A NO .2/PUN/2018, WE THEREFORE FOLLOWING THE SAME REASONING UPHOLD THE ADDITIO N OF RS.94,29,478/- MADE BY THE AO AND CONFIRMED BY LD.CIT(A). THUS, THE GROUNDS RAISED IN THE APPEAL BY THE ASSESSEE ARE D ISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT(SS)A NO.2/PUN/2018 FOR A.Y. 2013-14 IS DISMISSED. 9 13. NOW WE TAKE UP ASSESSEES APPEAL IN IT(SS)A NO.3/PUN /2018 FOR A.Y. 2014-15. 14. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO HAS NOTED THAT CASH OF RS.50,21,340/-, THREE DIARIES AND CERTAIN LOOSE PAP ERS WERE SEIZED FROM THE VEHICLE OF THE ASSESSEE ON 06.04.2014. NO TICE U/S 153A OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE AND IN RESPONSE TO WHICH, THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2014- 15 DISCLOSING THE TOTAL INCOME AT RS.1,12,96,839/-. THE CASE WAS TAK EN UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 1 43(3) R.W.S. 153A OF THE ACT VIDE ORDER DT.30.12.2016 AND THE TOTAL IN COME WAS DETERMINED AT RS.1,69,78,310/-. AGGRIEVED BY THE ORDER O F AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.14.07 .2017 (IN APPEAL NO.PN/CIT(A)-4/DCIT, CIRCLE-5, PUNE/414/2016-17) UPH ELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSE E IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1.THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVID ENCE, PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE . 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESS ED FOR AN AMOUNT BEING RS.1,69,78,312/-, AS AGAINST THE RETURNED INCOME O F AN AMOUNT BEING RS.1,12,96,839/-, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WHETHER THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN ARRIVING AT A PEAK OF RS.1,81,33,307/-, AND MAKING AN ADDITION OF AN AMOUNT BEING RS.55,74,036 /-, AS UNACCOUNTED INVESTMENT IN PURCHASES, UNDER THE F ACTS AND CIRCUMSTANCES OF THE CASE. 4. THE AUTHORITIES BELOW OUGHT TO HAVE APPRECIATED THE FACT, THAT AMOUNT BEING RS.55,74,036 /-, IS THE DIFFERENCE BETWEEN THE UNACCOUNTED SALES AND COLLECTIONS, THE SALES RECEIPTS WERE ALREADY IN CORPORATED IN THE SALES SHOWN IN THE PROFIT AND LOSS ACCOUNTS AND GROSS PRO FIT ARRIVED ON TOTAL SALES, NOW ADDING THE AMOUNT OF RS. 55,74,036 /-, IS DOUBLE ADDITION, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WHETHER THE AUTHORITIES BELOW ARE CORRECT IN ARR IVING AT A PEAK OF RS.1,81,33,307/- AND MAKING AN ADDITION OF RS.55,74 ,036/-, EVEN WHEN THE GROSS PROFIT OF RS.1,02,43,110/-, IS INCLUDED IN THE TOTAL INCOME OF RS.1,12,96,839/- DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO 10 NOTICE UNDER SECTION 153A OF THE ACT, UNDER THE FAC TS AND CIRCUMSTANCES OF THE CASE. 6. THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT, ONLY GROSS PROFIT ON THE SALES OF RS.14,93,16,474/-, HAVE TO C ONSIDERED AS INCOME, WHEN THE AUTHORITIES BELOW HAVE AGREED THAT THE AM OUNT OF RS. 14,93,16,474/-, ARE UNACCOUNTED SALES, UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE. 7. WHETHER THE AUTHORITIES BELOW ARE JUSTIFIED IN R EJECTING THE BOOKS OF ACCOUNTS WHEN THERE IS NO DEFECT IN THE BOOKS OF AC COUNTS AS PER THE PROVISION OF SECTION 145 OF THE ACT, UNDER THE FACT S AND CIRCUMSTANCES OF THE CASE. 8. WHETHER THE AUTHORITIES BELOW ARE JUSTIFIED IN S TATING THAT THE ACCOUNTED AND UNACCOUNTED BUSINESS ACTIVITIES ARE S EPARATE, EVEN WHEN THE APPELLANT HAS ADMITTED THAT THE TRANSACTIONS PE RTAIN TO THE PROPRIETARY BUSINESS OF THE APPELLANT, UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE. 9. WITHOUT PREJUDICE TO THE ABOVE, WHETHER THE AUTH ORITIES BELOW ARE JUSTIFIED IN NOT CONSIDERING THE CASH BALANCE OF R S. 34,74,488/-, APPEARING IN THE BOOKS OF ACCOUNTS OF THE APPELLANT , UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. WHETHER THE LEARNED AUTHORITIES BELOW ARE JUSTI FIED IN MAKING AN ADDITION OF RS.1,07,437/-, AS UNACCOUNTED SALES BAS ED ON THE NOTING IN THE LOOSE SHEET, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 11. WHETHER THE LEARNED AUTHORITIES BELOW ARE JUSTI FIED IN REJECTING THE EXPLANATION OF THE APPELLANT AND ARBITRARY ADDING T HE AMOUNT OF RS.1,07,437/-, AS UNACCOUNTED SALES, UNDER THE FACT S AND CIRCUMSTANCES OF THE CASE. 12. THE LEARNED AUTHORITIES BELOW FAILED TO CONSIDE R THE CIRCULAR NO. 14, DATED 11.04.1955 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 13. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER A S PER THE PARITY OF REASONING OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES ITSELF LIABLE TO BE C HARGED TO INTEREST UNDER SECTION 234A, 234B & 234C OF THE INC OME TAX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 14. WITHOUT PREJUDICE THE PROVISIONS OF SECTION 234 B [3] OF THE ACT IS APPLICABLE AS PER WHICH INTEREST UNDER SECTION 234 B OF THE ACT CAN BE CALCULATED ONLY FROM THE DATE OF 143[1] OR FROM THE DATE OF ORDER OF ASSESSMENT. IN THE INSTANT CASE THERE WAS AN INTIMA TION UNDER SECTION 143[1] OF THE ACT ON 26/03/2010, ONLY FROM SUCH DAT E IF AT ALL ANY INTEREST TO BE CALCULATED TO BE RECKONED. 15. WITHOUT PREJUDICE THE LEVY OF INTEREST UNDER SE CTION 234 A, 234 B & 234 C OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND METHOD' OF CALCULATION ADOPTED ON WHICH INTEREST IS LEVIED ARE ALL NOT DISCERNABLE AND ARE WRONG ON THE FACTS OF THE CASE . 15. BEFORE US, LD.A.R. SUBMITTED THAT GROUND NO.3 IS THE ON LY EFFECTIVE GROUND WHICH NEEDS TO BE ADJUDICATED AND FURTH ER SUBMITTED THAT SIMILAR GROUNDS HAVE BEEN RAISED FOR A.Y. 2015-16. 11 16. AO HAS NOTED THAT FOR THE YEAR UNDER CONSIDERATION ASSESSEE HAD PROVIDED FIGURES OF UNACCOUNTED CASH SALES OF RS.14,93,16,474 /- AND UNACCOUNTED CASH COLLECTION OF RS.14,18,03,071/-. HE NOTED THAT THE UNACCOUNTED TRANSACTIONS OF CASH SALES AND CASH COLLECT ION PROVE THAT THE BOOK RESULTS OF THE ASSESSEE WERE NOT RELIABLE AND A CCORDINGLY REJECTED THE BOOKS OF ACCOUNT AND THEREAFTER PROCEED ED TO DETERMINE THE INCOME OF THE ASSESSEE. AO HAS NOTED THAT ASSESSEE HA D WORKED OUT THE PEAK OF COLLECTION FROM DAY-TO-DAY COLLECTIONS AND SALES AND THE HIGHEST PEAK DURING THE YEAR WAS RS.1,81,33,307/- ON 31.03.2014. HE NOTED THAT THE PEAK DIFFERENCE IN UNACCOUNTED CASH SALES AND U NACCOUNTED CASH COLLECTION REPRESENTS UNACCOUNTED PORTION OF PURCHA SES FOR MAKING UNACCOUNTED SALES DURING THE YEAR. AFTER CONSIDE RING THE AMOUNT OF RS.31,29,793/- AND RS.94,29,478/- WHICH ASSESSEE HAD OFFERED FOR TAX FOR A.Y. 2012-13 AND 2013-14 RESPECTIVELY , ON ACCOUNT OF PEAK, THE BALANCE PEAK OF RS.55,74,036/- WAS CONSIDERED AS UNACCOUNTED PURCHASES AND HE MADE ITS ADDITION. AGGRIEV ED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY OBSERVING AS UNDER : 5.3.2 I HAVE CAREFUL LY CONSIDERED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND SUBMISSIONS MADE BY THE LD. AR. NO DOUBT, THE APPELLANT WAS MAKING HUGE UNACCOUNTED SALES & PURCHASES FOR MANY YEARS WHICH WERE, DULY RECORDED IN THE 3 DIARIES SEIZED BY THE POLICE DEPARTMENT DURING THE COURSE OF PATROLLING. NEEDLESS TO EMPHASIZE THAT TH E APPELLANT HAD BEEN DODGING TAX FOR THOSE MANY YEARS. THE ENTRIES IN TH E DIARIES SUFFICIENTLY PROVE THAT THE UNACCOUNTED SALES WERE METICULOUSLY RECORDED BUT NOT THE PURCHASES. THEREFORE, THE GP WAS WORKED FOR THE ENT IRE TRANSACTIONS AND R /I WAS FILED SHOWING THE INCOME, THEREOF. IN PRINCI PLE, THE APPELLANT AGREED WITH THE WORKING OF PEAK PURCHASE FROM THE U NACCOUNTED SALES BY THE AO DURING THE ASSESSMENT PROCEEDING. THE APPELLANT ALSO REQUESTED TO SET OFF THE P REVIOUS YEARS PEAK PURCHASE WHICH THE AO AGREED AND GAVE SET OFF. THEREFORE, THERE IS NO ISSUE LEFT WITH THE APPELLAN T TO CONTEST. THE AO HAS CORRECTLY ARRIVED AT THE PEAK PURCHASE AND MADE ADD ITION AS UNACCOUNTED INVESTMENTS. THE DETAILED REASONS OF THE FINDINGS O F THE AO IS FOUND IN PARA 12-14, AFTER GIVING D UE CONSIDERATION TO THE SUBMISSIONS MADE BY THE APPELLANT. INCIDENTALLY, THE A PPELLANT HAD NOT CONTESTED THE PEAK PURCHASE ARR IVED AT BY THE AO DURING THE ASSESSMENT PROCEEDING. HE CANNOT TAKE DIFFERENT STAND BEFORE THE APPELLATE PROCEEDING. TH E AO RIGHTLY DENIED CONSIDERING SO CALLED CASH BALANCE AVAILABLE BY HOL DING THAT 'THE ASSESSEE HAD NOT PROVIDED ANY EVIDENCE WHICH ESTABLISHED THAT TH E CASH AVAILABLE ON PARTICULAR DATE WITH REGULAR B OOKS OF ACCOUNT WERE UTILIZED FOR THE 12 PURPOSE OF MA K ING UNACCOUNTED PURCHASES. FURTHER, THE ACCOUNTED A ND UNACCOUNTED BUSINESS ACTIVITIES ARE SEPARATE ACTIVI TIES WHICH CANNOT BE MERGED WITH EACH OTHER WITHOUT HAVING CONCRETE EVID ENCES'. THE APPELLANT BEING HABITUAL TAX DODGER, WITHOUT THE PROPER EVIDE NCE, THE AO CANNOT TAKE O THER VIEW THAN WHAT HE HAD ARRIVED AT IN THE ASSESS MENT ORDER. THE APPELLANT MUST DEMONSTRATE THE CONNECTION/LINK OF C ASH AVAILABLE IN THE PREVIOUS YEAR WAS INVESTED FOR PURCHASE OF UNACCOUN TED SALES. LOGICALLY ALSO IT DOES NOT MATCH THAT UNACCOUNTED PURCHASES H AS CONNECTION TO THE SO CALLED CASH AVAILABLE IN THE ACCOUNT AT THE YEAR END BECAUSE THE APPELLANT MUST HAVE USED SUCH CASH FOR OTHER THAN PURCHASES AND SUCH FINDINGS CANNOT BE IGNORED CONSIDERING THE FACTS TH AT THE CONDUCT OF THE APPELLANT HAS BEEN A TAX-EVA D ER FOR MANY YEARS TILL HE IS CAUGHT. IN THESE CIRCUMSTANCES, I DON'T FIND MERIT IN THE CONTENTION OF THE LD. AR. THE HABITUAL TAX DODGER APPELLANT CANNOT EAT AND HAVE T OO. THEREFORE, I DON'T FIND ANY GROUND TO INTERFERE IN THE FINDINGS OF THE AO. THUS, THIS GROUND OF APPEAL IS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 17. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT THE AO HAS ACCEPTED THE AMOUN T OF GROSS PROFIT DECLARED BY THE ASSESSEE ON ACCOUNT OF UN ACCOUNTED SALES AND WHEN THE SAME HAS BEEN ACCEPTED BY THE AO, HE IS NOT JUSTIFIED IN MAKING THE ADDITION ON ACCOUNT OF UNACCOUNTED PURCHASES . HE FURTHER SUBMITTED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF SURMISES AN D HENCE, NO ADDITION IS CALLED FOR. IN THE ALTERNATIVE, HE SUB MITTED THAT AT MOST THE ADDITION BE MADE ONLY TO THE EXTENT OF NEGAT IVE CASE BALANCE OF RS.7,87,245/-. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.CIT(A). 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN PRESENT CASE IS WITH RESPECT TO T HE ADDITION MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASES. W E FIND THAT AO HAS REJECTED THE BOOKS OF ACCOUNT ON ACCOUNT OF UNA CCOUNTED CASH SALES WHICH WAS ADMITTED BY THE ASSESSEE. HE THEREAFTER ON THE BASIS OF THE PEAK CREDIT SUBMITTED BY THE ASSESSEE AND AFTER GIV ING THE CREDIT OF THE ADDITION MADE IN A.YS. 2012-13 AND 2013-14, MADE ADD ITION OF 13 RS.55,74,036/-. BEFORE US, ASSESSEE HAS FAILED TO CONTROVE RT THE FINDINGS OF LD.CIT(A) AND AO. IN SUCH A SITUATION, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). THUS, THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT(SS)A NO.3/PUN/2018 FOR A.Y. 2014-15 IS DISMISSED. 20. NOW WE TAKE UP ASSESSEES APPEAL IN IT(SS)A NO.04/PUN /2018 FOR A.Y. 2015-16. 21. BEFORE US, LD.A.R. SUBMITTED THAT THE ISSUES INVOLVED IN THE ASSESSMENT YEARS 2014-15 AND 2015-16 ARE IDENTICAL EXC EPT FOR THE AMOUNTS INVOLVED IN EACH OF THE YEARS. THEREFORE, HIS ARGU MENTS WILL BE COMMON AND THE SUBMISSIONS MADE WHILE ARGUING THE APPEAL FOR A.Y. 2014-15 WOULD BE APPLICABLE TO A.Y. 2015-16. LD. D.R. DID NOT OBJECT TO THE AFORESAID SUBMISSION OF LD.A.R. 22. AS FAR AS THE GROUNDS RAISED BY THE ASSESSEE IN IT(S S)A NO.04/PUN/2018 FOR A.Y. 2015-16 ARE CONCERNED, SINCE THE FACTS AND ISSUE OF THE CASE IN IT(SS)A NO.03/PUN/2018 FOR A.Y. 2014-1 5 ARE IDENTICAL TO THE FACTS AND ISSUE OF THE CASE IN IT(SS)A NO .04/PUN/2018, WE THEREFORE FOLLOWING THE SAME REASONING WHILE DECIDING TH E APPEAL IN IT(SS)A NO.03/PUN/2018, UPHOLD THE ADDITION OF RS.50,21,340/ - AS MADE BY THE AO AND CONFIRMED BY LD.CIT(A). THUS, THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 23. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT(SS)A NO.4/PUN/2018 FOR A.Y. 2015-16 IS DISMISSED. 14 24. TO SUM UP, ALL THE APPEALS OF THE ASSESSEE ARE DISM ISSED. ORDER PRONOUNCED ON 3 RD AUGUST 2018. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; DATED : 3 RD AUGUST, 2018. YAMINI '#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT(APPEALS)-4, PUNE. 4. PR.CIT-3, PUNE. 5. '#$ %%&',) &', / DR, ITAT, A PUNE; 6. $,-./ GUARD FILE. / BY ORDER , // TRUE COPY // /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.