MOHANLAL MANILAL PATEL, MUMBAI V. DCIT CEN CIR 35, MUMBAI

ITSSA 53/MUM/2011

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8501 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 11-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUNDERJIT SINGH
• Assessee Lawyers: Y P TRIVEDI
• Keywords: Search and seizure; Block assessment
• Section: 143(3); 234B; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , . . , . . BEFORE SHRI B.R.MITTAL, JM AND SHRI RAJENDRA, AM ( ) ./ IT(SS)A NO.53/MUM/2011 (BLOCK PERIOD :1.4.96 TO 11.4.2002) MOHANLAL MANILAL PATEL, 40, BHANSHALI BUILDING, WALKESHWAR, BANGANGA ROAD, MUMBAI-06 VS. DCIT, CENT. CIRCLE -35, MUMBAI. ./ ./ PAN NO. AETPP 4620 G ( / APPELLANT ) : ( / RESPONDENT ) AND ( ) ./ IT(SS)A NO.56/MUM/2011 (BLOCK PERIOD :1.4.96 TO 11.4.2002) DCIT, CENT. CIRCLE -35, MUMBAI. VS. MOHANLAL MANILAL PATEL, 40, BHANSHALI BUILDING, WALKESHWAR, BANGANGA ROAD, MUMBAI-06 ./ ./ PAN NO. AETPP 4620 G ( / APPELLANT ) : ( / RESPONDENT ) /ASSESSEE BY : SHRI Y.P.TRIVEDI REVENUE BY : SHRI SUNDERJIT SINGH / DATE OF HEARING : 25 TH SEPT., 2012 / DATE OF PRONOUNCEMENT : 28 TH SEPT., 2012 / O R D E R PER B.R.MITTAL, JM : THE CROSS APPEALS ARE FILED BY ASSESSEE AS WELL AS DEPARTMENT AGAINST ORDER DATED 23.8.2011 OF LD CI T(A) -41, MUMBAI FOR THE BLOCK PERIOD 1.4.1996 TO 11.4.2002. 2 MOHANLAL MANILAL PATEL, 2 . GROUNDS OF APPEAL TAKEN BY ASSESSEE READ AS UNDER: 1. THE LD CIT(A) HAS ERRED IN CONFIR MING AND TREATING THE BUSINESS OF DRAFT DISCOUNTING CARRIED ON BY HIS NEPHEW MR HARMESH PATEL AS THE APPELLANTS BUSINESS AND CONFIRMING ADDITION OF RS.11,98,760/- AS APPELLANTS INCOME. 2. THE LD CIT(A) HAS ERRED IN LA W AND ON FACTS IN NOT ACCEPTING THE GENUINENESS OF THE AFFIDAVIT SIGNED BY MR. HARMESH PATEL STATING THAT THE BUSINESS OF DRAFT DISCOUNTING BELONG TO HIM. 3. THE LD CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSING OFFICER COULD HAVE SUMMONED MR. HARMESH PATEL WHEN HE WAS ALIVE. 4. THE LOWER AUTHORITIES ERRED IN IGNOR ING THE CONFIRMATION PROVIDED BY THE BANKS CLEARLY STATING THAT T HE VARIOUS BANK ACCOUNTS ACTUALLY BELONGED TO MR. HARMESH PATEL AND NOT TO THE APPELLANT. 5. THE LD CIT(A) ERRED IN CONF IRMING AND TREATING RS.30,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE ON THE BASIS OF A PIECE OF PAPER SEIZED WITHOUT VERIFYING THE CONFIRMATION OF THE PARTY. 6. THE LD. CIT(A) HAS ERRED IN C ONFIRMING PENALTY PROCEEDINGS U/S. 158BFA OF THE INCOME TAX ACT, 1961. 7. THE LD CIT(A) HAS ERRED IN CONF IRMING THE CHARGING INTEREST U/S.234A, 234B & 234C OF THE INCOME TAX ACT, 1961. 8. THE LD CIT(A) HAS ERRED IN C ONFIRMING THE SURCHARGE @ 5% OF THE INCOME TAX PAYABLE WHEREAS 60% TA X IN BLOCK ASSESSMENT INCLUDES AL OTHER LEVIES. 9. THE ASSESSEE CRAVES LEAVE TO A DD FURTHER GROUNDS OR TO AMEND OR ALTER THE EXISTING GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 3 . GROUNDS OF APPEAL TAKEN BY DEPARTMENT READ AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT(A) IS CORRECT IN DELET ING THE ADDITION M ADE BY THE AO BY IGNORING THE FACT THAT ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT RELATING TO DRAFT DISCOUNT ING BUSINESS AND NO RETURN OF INCOME WAS FILED RELATING TO ENTRY FOUND RECORDED IN BANK ACCOUNTS. THE ASSESSEE HAS ALSO NOT PRODUCED ANY EVIDENCE TO ESTABLISH THAT HE IS EARNING COMMISSION FROM DRA FT DISCOUNTING BUSINESS @ 0.2% TO 0.25%. IN THE ABSENCE OF ANY S UPPORTING EVIDENCE IT SEEMS TO BE VERY ILLOGICAL THAT A BUSINESS IS DOING ITS BUSINESSMAN AT SUCH A NOMINAL COMMISSION. THE LD CIT(A) HAS ALSO IGNORED THE FACT THAT THE HIGH RISK INVOLVE IN 3 MOHANLAL MANILAL PATEL, THIS BUSINESS AND POSSIBILITIES TO INVEST OWN FUNDS, IT CANNOT BE ACCEPTABLE THAT THE ASSESSEE EARNED COMMISSION FROM DRAFT DISCOUNTING BUSINESS SUCH A NORMAL RATE @ 0.2% TO 0.25%. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT(A) IS CORRECT IN DELETING THE ADDITION MADE BY THE AO IGNORING THE FACT THAT THE CASE LAW RELIED UPON BY THE ASSESSEE AS WELL AS THE LD CIT(A) ON THE DECISI ON OF HONBLE TRIBUNAL IN THE CASE OF KULWANT SINGH VS DCIT, 134 TTJ 129 IS NOT APPLICABLE TO THIS CASE BECAUSE FACTS & CIRCUMSTANCES OF TH IS CASE ARE DIFFERENT FROM THE FACTS & CIRCUMSTANCES OF THE ASSESSEES CASE. 4 . THE GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT ARE CONNECTED WITH GROUNDS NO.1 TO 4 OF THE APPEAL TAKEN BY TH E ASSESSEE. 5 . THE RELEVANT FACTS ARE THAT THERE WAS SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT ON 11-4-2002. ORIGINALLY THE ASSESSMENT WAS CO MPLETED UNDER SECTION 158BC OF THE ACT ON 12-5-2004 DETERMINING THE TOTAL UNDISCLOSED INCOME OF ` .5,65,91,070/-. LEARNED CIT(A) CONFIR MED THE SAID ADDITION. HOWEVER, ON FURTHER APPEAL, THE ITAT VIDE ITS ORDER DATED 12-10-2009 IN IT(SS) NO.82/MUM/2008 SET ASIDE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF HEARING. PURSUANT THERETO THE ASSESSING OFFICER MADE THE FRESH ASSESSMENT ORDER DATED 30-12-2010 ASSESSING TOTAL UNDISCLOSED INCOME OF THE ASSESSEE AT ` .91,40,790/-. 6. NOW, WE TAKE UP THE GROUNDS NO.1 TO 4 OF THE APPEAL TAKEN BY THE ASSESSEE READ WITH THE GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, A DIARY WAS FOUND AT 4 MOHANLAL MANILAL PATEL, THE PREMISES OF THE ASSESSEE. IT WAS CLAIMED THAT THE SAID DIARY BELONGED TO LATE SHRI HARMESH N. PATEL, WHO WAS ENGAGED IN THE BUSINESS OF DRAFT DISCOUNTING RUNNING FROM THE SAME PREMISES. SINCE SHRI HARMESH N. PATEL DIED AND NO EVIDENCE COULD BE PRODUCED BY THE ASSESSEE TO PROVE THAT THE BUSINE SS WAS BELONGING TO HIM AS HE WAS NOT AN INCOME-TAX ASSESSEE, THE ASSESS ING OFFICER TREATED THE ENTRIES OF SEIZED DIARY AS BELONGING TO THE ASSESSEE OF DRAFT DISCOUNTING BUSINESS. AS PER THE DETAILS GIVEN IN DIAR Y AND BANK ACCOUNTS, THE ASSESSING OFFICER TOTALED THE CREDIT ENTRIES FO R THE BLOCK PERIOD TO THE TUNE OF ` .105,49,36,886/-. THE ASSESSING OFFI CER AFTER APPLYING GROSS PROFIT @1%, HELD THAT THE ASSESSEE HAS EARNED INCOME OF ` .1,05,49,350/-. THE ASSESSING OFFICER AFTER DEDUCTING THE EXPENSES CLAIMED OF ` .6,90,937/- ON ACCOUNT OF BANK IN TEREST AND BANK CHARGES AND OF ` .7,47,645/- ON ACCOUNT OF OTHER EX PENSES LIKE SALARY, CONVEYANCE, TELEPHONE ETC., MADE AN ADDITION OF ` .91,10,788/- TO THE TAXABLE INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 7 . ON BEHALF OF THE ASSESSEE, DETAILS WERE SUBMITTED FROM ASSESSMENT YEARS 2005-06 TO 2008- 09 AND STATED THAT THE AVERAGE GROSS PROFIT OF TOTAL FEE/COMMI SSION WAS 0.2137%. THE DETAILS AS SUBMITTED BY THE ASSESSEE BEFORE LEARNED CIT(A) HAVE BEEN STATED BY LEARNED CIT(A) IN PARA 2.5 AS UNDER :- 5 MOHANLAL MANILAL PATEL, PARTICULARS AY2005-06 AY 2006-07 AY 2007-08 AY 2008-09 TOTAL TURNOVER 49,72,31,606 87, 45,23,562 122,33,98,598 286,79,56,765 TOTAL FEES/COMMISSION RECEIVED BEFORE BANK INT. & BANK CHARGES 14,04,882 22,67,557 21,76,456 38,70,162 GROSS % OF TOTAL FEES/COMMISSION ON TOTAL TURNOVER 0.2825% 0.2593% 0.1779 0.1349% AVERAGE GROSS % OF TOTAL FEES/COMMISSION ON TOTAL FEES OF 4 Y EARS 0.2137% 8 . LEARNED CIT(A) CONSIDERED THE S UBMISSION OF THE ASSESSEE AND VIDE PARA 2.6 OF THE IMPUGNED ORDER HELD THAT THE GROSS COMMISSION AT THE RATE OF 0.25% OF THE TOTAL AMOUNT CREDITED IN THE BANK ACCOUNT TO BE ADOPTED IN PLACE OF 1% CONSIDERED BY THE ASSESSING OFFICER. THUS, THE LEARNED CIT(A) ASSESSED THE NET ADDITION OF ` .11,98,760/- AND DELETED THE BALANCE ADDITION. THE SAID PARA 2.6 OF THE ORDER OF THE CIT(A) READ AS UNDER :- 2.6 I HAVE CONSIDERED THE SUBMISSI ONS OF THE APPELLANT, ORDER OF THE AO LAND FACTS OF THE CASE IN BRIEF ARE THAT SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT T HE BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURSE OF S EARCH, CERTAIN PAPERS WERE FOUND AND SEIZED. OUT OF THE SEIZED P APERS, ONE DIARY WAS FOUND WHICH HAD SHOWN THE ENTRIES OF DRAFT DISCOUNTING BUSINESS AND THE BANK ACCOUNTS CORRESPONDING TO THESE ENTRIES. THE TOTAL OF THESE BANK ACCOUNTS FOR THE BLOCK PER IOD HAS WORKED OUT AT ` .105.49 CRS. THE AO HAS GIVEN AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN WHY THIS AMOUNT MAY7 NOT BE TREATED AS UND ISCLOSED INCOME WHICH IS NOT REFLECTED IN THE BOOKS OF ACCOUNTS. IN RESPONSE TO THIS, THE AR OF THE APPELLANT HAS SUBMITT ED THAT THESE ENTRIES ARE BELONGING TO SHRI HARMESH N. PATEL, NEPHEW OF THE ASSESSEE WHO DIED AND WAS RUNNING THE BUSINESS OF DRAFT DISCOUNTING FROM THE BUSINESS PREMISES OF THE ASSESSEE. AS NO EVIDENCE WAS FOUND THAT THESE ENTRIES WERE BELONGING TO SHRI HARM ESH N. PATEL, TH EREFORE, THE AO 6 MOHANLAL MANILAL PATEL, HAS TREATED THESE ENTRIES AS BUS INESS OF THE ASSESSEE AND BY ADOPTING COMMISSION RATE OF 1%, THE TOTAL ADDITION OF ` .91,10,788/- WAS MADE AFTER ALLOWING THE EXPENS ES OF BANK CHARGES AND OTHER EXPENSES CLAIMED. ON THE OTHER HAND, THE AR OF THE APPELLANT HAS SUBMITTED THAT THE DRAFT DISCO UNTING BUSINESS HAS COMMISSION INCOME VARYING FROM 0.2% TO 0. 25%. SHRI ROMAN M. PATEL WHOSE STATEMENT WAS RECORDED DURING THE C OURSE OF SEARCH HAS STATED THAT NOWHERE THE COMMISSION INCOME IS MORE THAN 0.25%. SHRI ROMAN M. PATEL HAS ALSO FILED HIS ;RETURN OF INCOME IN THE EARLIER YEARS BY SHOWING GROSS COMMISSION INCOME AT 0.28% FOR AY 2005-06, 0.25% FOR AY 2006-07, 0.17% FO R AY 2007-08 AND 0.13% FOR AY 2008-09 WHICH WERE DULY ACCEPT ED BY THE DEPARTMENT AFTER SCRUTINIZING THE CASES U/S, 143(3) . THUS, THE AR OF THE APPELLANT HAS ARGUED THAT THE AVERAGE OF GROSS COMMISSION ON DRAFT DISCOUNTING BUSINESS COMES TO 0.2137% WHICH MAY BE ADOPTED IN CASE OF THE ASSESSEE. THE APPELL ANT HAS ALSO RELIED ON VARIOUS DIECISION OF HONBLE TRIBUNAL WHER E THE TRIBUNAL HAS HELD THAT THE NET INCOME FROM THIS BUSINESS IS ESTIMATED AT 0.25% OF THE TURNOVER. BUT, ;THE AO IN THIS CASE HAS ADOPTED THE FIGURE OF 1% WITHOUT ANY EVIDENCE FOUND AND SEIZED DURING THE COURSE OF SEARCH OR WITHOUT ANY COMPARABLE CASE OF TH IS TRADE. IT IS TRUE THAT WHERE THERE IS NO EVIDENCE F OUND, THE INCOME CAN BE ESTIMATED BUT THE ESTIMATE SHOULD BE BASED ON SOME FACTS. THE CASE OF SHRI ROMAN M. PATEL BROTHER OF THE ASSESS EE WHO IS ALSO DOING THE SAME BUSINESS IS ON RECORD WHICH SHOW S THAT THE DRAFT DISCOUNTING BUSINESS HAS A GROSS COMMISSION WHICH VARIES FROM 0.13% TO 0.28%. MOREOVER, THE HONBLE TRIBUNAL HAS ALSO HELD IN THE CASE OF KULWANT SINGH VS. DCIT (134 TTJ 129) THAT NET INCOME FROM THIS BUSINESS SHOULD BE ESTIMATED AT 0.2% OF THE TURNOVER. ON THE BASIS OF THE INCOME SHOWN BY THE APPELLANT, IT IS FA IR TO ADOPT THE GROSS COMMISSION @ 0.25% OF THE TOTAL AMOUNT CREDITED IN THE BANK ACCOUNT OF ` .105,49,36,886/- IN PLACE OF 1% ADOPTED BY THE AO. THUS, THE TOTAL COMMISSI ON EARNED COMES TO AT ` .26,37,342/- IN PLACE OF ` .1,05,49,370/- ADOPTED BY THE AO @ 1%. AFTER ALLOWING THE DEDUCTION OF EXPENSES CLAIMED AT ` .6,90,937/- AND ` .7,47,645/-, THE NET ADDITION OF ` .11,98,760/- IS CONFIR MED AND THE BALANCE ADDITION IS DELETED. THE GROUND OF APPEAL IS PARTLY ALLOWED. 9 . HENCE, THE ASSESSEE AS WELL AS DEPARTMENT IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 10 . DURING THE COURSE OF HEARING, LEARNED AR SUBMITTED THAT LEARNED CIT(A) ACCEPTED THE FACT THAT AVERAGE GROSS PROFIT ON THE 7 MOHANLAL MANILAL PATEL, FEE/COMMISSION IS 0.2137% AND, THEREFORE, HE WAS NOT JUSTIFIED TO ADOPT THE GROSS RATE OF 0.25% OF THE TOTA L AMOUNT CREDITED. HE SUBMITTED THAT THE EXCESS AMOUNT CONSIDERED BY THE LEARNED CIT(A) IS NOT BASED ON FACTS AND THE SAME SHOULD BE DELETED. ON THE OTHER HAND, LEARNED DR SUPPORTED THE ORDER OF THE ASSESSIN G OFFICER AND SUBMITTED THAT 1% GROSS COMMISSION CONSIDERED BY THE ASSESSING OFFICER IS FAIR AND JUSTIFIED. 11 . WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD REPRESENTATIVES OF PARTIES AND ORDERS OF AUTHORITIES BEL OW. IT IS A FACT THAT THE ASSESSEE FILED THE DETAILS FOR THE ASSE SSMENT YEAR 2005-06 TO 2008-09 AND WE OBSERVE THAT THE GROSS PERCENT AGE OF FEE/COMMISSION VARIED FROM 0.1349% TO 0.2825% AND THE AVERAGE FOR THE SAID FOUR YEARS COMES TO 0.2137%. HOWEVER, THE ASSESSING OFFICER ADOPTED THE RATE OF COMMISSION AT 1% OF THE GROSS AMOUNT CREDITED, WHEREAS LEARNED CIT(A) REDUCED IT TO 0.25% BUT NO BASIS HAS BEEN GIVEN BY ANY OF THE AUTHORITIES BELOW WHILE ADOPTING THE SAID PERCENTAGE OF GROSS COMMISSION. HONBLE APEX COURT IN THE CASE OF BRIJ BHUSHAN LAL PARDUMAN KUMAR V. COMMISSIONER OF INCOME-TAX, REPORTED IN 115 ITR 524 , HAS HELD THAT EVEN IN A CASE OF BEST JUDGMENT ASSESSMENT, AN ESTIMATE HAS TO BE DONE IN A REAS ONABLE BASIS AND NOT VINDICTIVELY OR CAPRICIOUSLY. THE HONBEL CALCUTTA HIGH COURT IN THE CASE OF CIT VS. 8 MOHANLAL MANILAL PATEL, RANICHERRA TEA CO. LTD., REPORTED IN 207 ITR 979 , HAS ALSO HELD THAT THE ASSESSING OFFICER IS NOT BOUND BY THE STRICT JUDICIAL PRINCIPAL IN MAKING BEST JUDGMENT ASSESSMENT, HOWEVER, HE DOES NOT POSSESS ABSOLUTE AUTHORITY TO ASSESS FIGURE AS HE LIKES. ON CONSIDERING THE ABOVE DECISIONS AND THE RATE OF COMMISSION AS ADOPTED BY THE AUTHORITIES BELOW, WE FIND SUBSTANCE IN THE SUBMISSION OF THE LEARNED AR THAT THE RATE OF COMMISSION AS ADOPTED BY THE AUTHORITIES BELOW IS NOT BASED ON ANY BASIS BUT HAS BEEN ADOPTED ARBITRARILY. ON THE OTHER HAND, IF WE CONSIDER THE DETAILS FILE D BY THE ASSESSEE ON THE RATE OF COMMISSION IN THE FOUR YEARS FROM THE ASSESSMENT YEARS 2005-06 TO 2008-09, THE AVERAGE COMES TO 0.21 37%. WE ARE OF THE CONSIDERED VIEW THAT IT WILL BE FAIR AND REAS ONABLE TO ADOPT THE SAID PERCENTAGE OF GROSS COMMISSION OF 0.2137% ON THE TOTAL AMOUNT CREDITED IN THE BANK ACCOUNT OF ` .105,49,36,886/-, WHICH GIVE S THE TOTAL COMMISSION OF ` .22,54,400/-. FURTHER, OUT OF SAID COMMISSION, WE AGREE WITH THE AUTHORITIES BELOW TO DEDUCT THE EXPENSES OF ` .6,90,937/- AND ` .7,47,645/- AND ACCORDINGLY, THE NET ADDITION OF ` .8,15,818/- IS CONFIRMED AND THE BALANCE ADDITION IS DELETED. 12 . IT IS RELEVANT TO STATE THAT DURING THE COURSE OF HEARING, LEARNED DR SUBMITTED THAT THE EXPENSES SHOUL D NOT BE FURTHER ALLOWED OUT OF ESTIMATED GROSS PERCENTAGE OF COMMISSION. WE DO NOT FIND MERIT IN THE 9 MOHANLAL MANILAL PATEL, SAID CONTENTION OF THE LEARNED DR AS THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) HAVE ALLOWED THE DEDUCTI ON OF EXPENSES TO ARRIVE AT THE NET RATE OF PROFIT. FURTHER, THE ASSE SSEE HAS STATED T HE GROSS PERCENTAGE OF FEE/COMMISSION PROFIT AND NOT T HE NET PERCENTAGE OF FEE/COMMISSION. THEREFORE, THE DEDUCTION OF EXPENS ES, AS MENTIONED HEREINABOVE, IS JUSTIFIED. ACCORDINGLY, WE ALLOW THE GR OUNDS NO.1 TO 4 OF THE APPEAL FILED BY THE ASSESSEE IN PART BY SUSTAINING ADDITION OF ` .8,15,818/- AS AGAINST ` .11,98,760/- CONFIRMED BY T HE LEANED CIT(A). CONSEQUENTLY, THE GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT IN ITS APPEAL ARE REJECTED. 13 . IN RESPECT OF GROUND NO.5 OF THE APPEAL, WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. DURING THE COURSE OF HEARING, OUR ATTENTION HAS BEEN DRAWN TO PAGES 13 & 14 OF THE PAPER BOOK. WE OBSERVE FROM PAGE 13 OF THE PAPER BOOK, WHICH IS A SEIZED DOCUMENT, ROMAN TO PAY ` .30,000/- AND NAME OF SHABBIR, NOOR ENTERPRISE, IS MENTIONED. DURING THE COURSE OF HEARING, OUR ATTENTION WAS ALSO DRAWN TO PAGE 14 OF THE PAPER BOOK, WHICH IS A COPY OF CERTIFICATE DATED 22-12-2004, BY WHICH PARTNER OF NOOR ENTERPRISE, MR. SHABBIRBHAI HAS STATED THAT HE HAD WRITTEN ON 21- 2-2002 TO MR. ROMAN TO PAY HIM ` .30,000/- BUT MR. ROMAN WAS NOT HAVING THE MONEY, HE HAD NOT PAID HIM. THEREFORE, NEITHER HE HAD RECEIVED NOR PAID ANY CASH TO HIM. THER EFORE, IT IS CONFIRMED THAT NEITHER SHABBIRBHAI HAS RECEIVED NOR PAID ANY CASH TO HIM. WE OBSERVE THAT 10 MOHANLAL MANILAL PATEL, DURING COURSE OF ASSESSMENT PR OCEEDINGS, THE SAID SEIZED PAPER WAS CONFRONTED WITH THE ASSESSEE AND THE AUTHORITIES BELOW HAVE MENTIONED THAT THE ASSESSEE FAILED TO EXPL AIN THE SAME. HOWEVER, DURING THE COURSE OF HEARING LEARNED AR SUBMITT ED THAT THE SAID CERTIFICATE DATED 22-12-2004, COPY OF WHICH PLACED AT PAGE 14 OF THE PAPER BOOK, WAS FILED BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER DID NOT TAKE NOTE OF THE CERTIFICATE AS WELL AS SUBMISSION OF THE ASSESSEE. THE NAME OF THE ASSESSEE WAS NOWHERE MENTI ONED IN THE SEIZED DOCUMENT PLACED AT PAGE 13 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER NEITHER CALLED MR. ROMEN TO C ONFRONT AS TO WHETHER THAT ENTRY RELATED TO HIM OR NOT. IT WAS STATED THAT MR. ROMEN IS THE SON OF THE ASSESSEE. NOR THE ASSESSING OFFICER EXAMINED MR. SHABBIRBHAI, PARTNER OF NOOR ENTERPRISE, AS TO WHETHER SAID SUM OF ` .30,000/- WAS PAID TO ASSESSEE OR TO MR. ROMAN. LD. DR DID NOT DISPUTE THE SAID FACTS AS CONTENDED BY THE LEARNED AR, SAVE AND E XCEPT RELYING ON THE ORDERS OF THE AUTHORITIES BELOW. 14 . CONSIDERING THE FACTS OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION OF SAID ` .30,000/- IN THE HAND OF THE ASSESSEE IS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THE SAID ADDITION OF ` .30,000/- BY ALLOWING GROUND NO.5 OF THE A PPEAL TAKEN BY THE ASSESSEE. 11 MOHANLAL MANILAL PATEL, 15 . NO SUBMISSION HAS BEEN MADE IN RESPECT OF GROUNDS NO.6 &7 OF THE APPEAL. HENCE, GROUND NO.6 IS REJECTED WHEREAS GROUND NO.7 IS CONSEQUENTIAL. 16 . IN RESPECT OF GROUND NO.8 OF THE APPEAL, THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. SURESH N. GUPTA, REPORTED IN 297 ITR 322 , WHEREIN IT WAS HELD BY THEIR LORDSHIPS THAT THE PROVISO TO CHARGE SURCHARGE INSERTED IN SECTION 113 BY THE FINANC E ACT, 2001 WAS ONLY CLARIFICATORY IN NATURE. HENCE, WE HOL D THAT THE CHARGE OF SURC HARGE AT THE RATE OF 5% OF THE INCOME TAX PAYABLE ON THE IN COME FOR THE BLOCK PERIOD IS IN ORDER. ACCORDINGLY, THE ORDER OF THE CIT(A) IS UPHELD BY REJECTING THE GROUND NO.8 OF THE APPEAL TA KEN BY THE ASSESSEE. 17 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART, WHEREAS APPEAL OF THE DEPAR TMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPT., 2012 . 28 TH SEPT.,2012 SD/- SD/- ( ) ( . . ) ( RAJENDRA) (B.R.MITTAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED 28 TH / SEPT. /2012 . . / PKM . . . /PS MOHANLAL MANILAL PATEL, 12 / COPY OF THE ORDER FORWARDED T O : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI