Dr. Apurva Kamlesh Vasavda, Surat V. The Dy. CIT, Central Circle-3, Surat

ITSSA 364/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1380 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 20-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUPAMA SINGLA
• Assessee Lawyers: MEHUL R SHAH
• Keywords: Income from undisclosed sources; Search and seizure
• Section: 153A

Judgement Text

DR. APURVA KAMLESH VASAVDA V. DCIT-3 SURAT /I.T.A.NO. 364/AHD/2017/A.Y. 12-13 PAGE 1 OF 4 , , IN THE INCOME TAX APPELLATE TRIBUNAL-SURAT-BENCH-SURAT BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUTANT MEMBER . . /. I.T(SS).A NO.364/AHD/2017 / ASSESSMENT YEAR:2012-13 DR. APURV A KAMLESH VASAVDA, 20, VAISHALI BUNGLOW, OPP. RAJ TILAK APARTMENT. NEAR PANAS, CITY LIGHT ROAD SURAT 395002 [PAN: ABXPV 1812 B] DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 3, SURAT APPELLANT /RESPONDENT /ASSESSEE BY SHRI MEHUL R. SHAH, CA /REVENUE BY MRS. ANUPAMA SINGLA, SR.D.R. / DATE OF HEARING: 11.12.2019 /PRONOUNCEMENT ON 11.12.2019 /O R D E R PER O. P. MEENA, AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, SURAT (IN SHORT THE CIT (A)) DATED 01.06.2017 PERTAINING TO ASSESSMENT YEAR 2012-13, WHICH IN TURN HAS ARISEN FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) READ WITH SECTION 153A DATED 08.03.2016 OF INCOME TAX ACT, 1961 (IN SHORT THE ACT) BY THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-3, SURAT (IN SHORT THE AO). 2. THE SOLE GROUNDS OF APPEAL RELATES TO CONFIRMING ADDITION OF RS.9,07,245 OUT OF ADDITION OF RS.11,19,160 MADE ON ACCOUNT OF UNACCOUNTED INCOME. 3. SUCCINCT FACTS ARE THAT THE ASSESSEE IS DOCTOR BY PROFESSION WHEREIN A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 04.03.2014 ALONG WITH MEDICAL PROFESSIONAL GROUP. A STATEMENT UNDER SECTION 132(4) WAS RECORDED FROM THE ASSESSEE WHEREIN HE MADE DISCLOSURE OF RS.95 LAKH ON ACCOUNT OF UNDERSTATEMENT OF CONSULTANCY OUT OF WHICH INCOME OF RS.10 LAKH WAS FOR THE YEAR UNDER DR. APURVA KAMLESH VASAVDA V. DCIT-3 SURAT /I.T.A.NO. 364/AHD/2017/A.Y. 12-13 PAGE 2 OF 4 CONSIDERATION. THE AO HAS OBSERVED THAT STATUTORY MEDICAL REGISTER- C-3, SHOWS RECEIPT OF RS.11,69,440/- WHEREAS LOOSE PAPER OF ANNEXURE 9 TO 30 SHOWS RECEIPTS OF RS.2,74,050/- FOR ONE MONTH OF A.Y. 2012-13. THE AO THEREFORE, EXTRAPOLATED RECEIPTS FOR ENTIRE YEAR AT RS.32,88,600/- [ I.E. 2 74,050X 12 MONTH]. ACCORDINGLY, AFTER ALLOWING SET OFF OF RS.11,19,160/-, ADDITION WAS PROPOSED TO BE MADE AT RS.21,19,160/-. HOWEVER, AFTER GIVING SET OFF RS.10,00,000/- BEING DISCLOSURE FOR THE YEAR, THE AO MADE ADDITION OF RS.11,69,440/- ON ACCOUNT OF PROFESSIONAL RECEIPTS. 4. BEING, AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). HOWEVER, LD. CIT (A) OBSERVED THAT THE APPELLANT HAS BEEN SHOWING NET PROFIT OF 90% OF RECEIPTS. HENCE, THE CIT (A) HAS WORKED OUT ESTIMATED RECEIPTS AT RS.19,07,245/- BEING 90% OF RECEIPTS OF RS.21,19,160/-. ACCORDINGLY, AFTER ALLOWING SET OFF OF RS.10 LAKH SUSTAINED BALANCE ADDITION OF RS.9,07,245/-. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RECEIPTS RECORDED IN ANNEXURE 9 ARE FOR THE THREE MONTH WHEREAS THE AO HAS CONSIDERED IT FOR ONE MONTH. HENCE, IF EXTRAPOLATION IS DONE FOR 3 MONTH THEN THE TOTAL RECEIPTS WOULD BE WORK OUTS TO RS.10,96,200/- [ 274050/3X12] AS AGAINST WHICH THE ASSESSEE HAS DISCLOSED RS.11,69,440/- IN THE BOOKS OF ACCOUNTS HENCE, NO ADDITION IS REQUIRED TO BE MADE. EVEN IF CONSIDERING PERIOD OF ANNEXURE- 9, FOR THE PERIOD OF TWO MONTH , EVEN THEN TOTAL RECEIPTS WHICH WORKED OUT TO RS.16,44,300/- [ 274050/12/2] AS AGAINST WHICH THE ASSESSEE HAS SHOWN RECEIPTS OF RS.11,69,400/- HENCE, ADDITION COULD BE MADE FOR RS.4,74,900/- AGAINST WHICH THE ASSESSEE HAD DISCLOSED RS.10 LAKH. HENCE, NO ADDITION COULD BE MADE. THE LEARNED COUNSEL FOR THE ASSESSEE RELYING ON THE DECISION IN THE CASE OF SAMRAT BEER BAR V. ACIT [2000] 75 ITD 19 (PUNE)(TM) SUBMITTED THAT NO ESTIMATION OF EXTRAPOLATION CAN BE MADE DR. APURVA KAMLESH VASAVDA V. DCIT-3 SURAT /I.T.A.NO. 364/AHD/2017/A.Y. 12-13 PAGE 3 OF 4 OTHER THAN SEIZED MATERIAL FOUND IN SEARCH. AS THERE WAS NO INDICATION OF SUPPRESSION OF RECEIPT FROM OTHER MATERIAL FOUND DURING SEARCH. SIMILAR VIEW WERE ALSO EXPRESSED IN THE CASE OF HOTEL VRINDAVAN V. ACIT [2000] 67 TTJ 139 (PUNE) AND IN THE CASE OF ACIT V. AMAR CORPORATION [I.T.A.NO. 2036/AHD/2007 A.Y. 98-99 DATED 31.03.2011- AHMEDABAD TRIBUNAL]. 6. PER CONTRA, THE LD. SR. D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE ARE OF THE VIEW THAT EXTRAPOLATION COULD BE DONE IN A SITUATION WHEN THE SEIZED MATERIAL INDICATE THAT THERE WAS REGULAR OCCURRENCE IN A SYSTEMATIC MANNER. HOWEVER, IN THE CASE OF THE SEIZED MATERIAL BEING ANNEXURE 9 IS NOT SHOWING SUCH REGULAR RECEIPTS, HENCE, BASED ON THE SAME EXTRAPOLATION CANNOT BE MADE. WE FURTHER FIND THAT THE ASSESSEE HAS HAD ALREADY MADE DISCLOSURE OF RS.10 LAKHS ON ACCOUNT OF SUPPRESSION OF RECEIPTS AS AGAINST THE RECORDED RECEIPTS OF RS.11,69,440/-. THUS, TOTAL RECEIPTS WOULD BE WORKOUTS TO RS.21,69,440/- [ 10 LAC+11.69 LAC ]. HOWEVER, THE AO HAS EXTRAPOLATED THE RECEIPT BY TAKING THE RECEIPTS RECORDED FROM THE PERIOD 10.01.2012 TO 07.03.2012 AT RS.2,74,050/-. WE FIND THAT THE PERIOD INVOLVED FOR RECEIPTS OF ANNEXURE -9 IS FOR TWO MONTHS PERIOD HENCE, IF EXTRAPOLATION IS TO BE DONE IT SHOULD BE FOR CONSIDERED BY TAKING THE RECEIPTS FOR TWO MONTH, THEN TOTAL RECEIPTS WHICH WORKED OUT TO RS.16,44,300/- [ 274050/12/2] AS AGAINST WHICH THE ASSESSEE HAS SHOWN RECEIPTS OF RS.11,69,400/- HENCE, ADDITION COULD BE MADE FOR RS.4,74,900/- AGAINST WHICH THE ASSESSEE HAS HAD DISCLOSED RS.10 LAKH. HENCE, NO ADDITION COULD BE MADE. WE FURTHER FIND THAT IN THE CASE OF SAMRAT BEER BAR V. ACIT [2000] 75 ITD 19 (PUNE)(TM) IT WAS HELD THAT THAT NO ESTIMATION OF EXTRAPOLATION CAN BE MADE OTHER THAN RECEIPTS OF SEIZED MATERIAL FOUND IN SEARCH. AS THERE WAS NO INDICATION DR. APURVA KAMLESH VASAVDA V. DCIT-3 SURAT /I.T.A.NO. 364/AHD/2017/A.Y. 12-13 PAGE 4 OF 4 OF OTHER MATERIAL FOUND DURING SEARCH. SIMILAR VIEW WERE ALSO EXPRESSED IN THE CASE OF HOTEL VRINDAVAN V. ACIT [2000] 67 TTJ 139 (PUNE) AND IN THE CASE OF ACIT V. AMAR CORPORATION [I.T.A.NO. 2036/AHD/2007 A.Y. 98-99 DATED 31.03.2011. CONSIDERING THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT EVEN IF EXTRAPOLATION IS DONE IT SHOULD BE TAKING THE PERIOD OF TWO MONTHS RECEIPTS OF RS.2,74,050/- , THEN NO ADDITION COULD BE MADE AND FURTHER, IN THE LIGHT OF RATIO OF ABOVE DECISION NO ADDITION COULD BE MADE OTHER THAN RECEIPTS RECORDED IN SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THEREFORE, THE ADDITION SUSTAINED BY THE CIT (A) WAS NOT BASED ON SOUND PRINCIPLE OF LAW. THEREFORE, SAME IS DIRECTED TO BE DELETED. ACCORDING SOLE GROUNDS OF APPEAL IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. 9. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.12.2019 SD/- SD/- (SANDEEP GOSAIN) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 11 TH DECEMBER, 2019/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/ GUARD FILE OF ITAT. BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, SURAT