Dhirajlal Lakhambhai Bhensla, Veraval V. The Deputy Commissioner of Income Tax, Cen. Cir.-2, Rajkot

ITSSA 72/RJT/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2220 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 18-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MJ RANPURA
• Keywords: Loose papers
• Section: 143(3); 142(1); 153A; 201; 72; 13; 153; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER ./ IT (SS) A NO S . 55 & 68 - 72 /RJT/201 8 / ASSESSMENT YEAR: 201 2 - 1 3 SMT. HIRABEN L. BHENSALA PROP. RAM SEA FOODS, OPP. KRUSHNA KRUPA BUNGLOW, STREET NO. 6, KRISHNA NAGAR STREET, KHADKHAD, GUJARAT VS THE ASSISTANT COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, RAJKOT SHRI MOHAN DAMJI BHENS ALA PROP. GEETA SEA FOODS, BHIDIYA PLOT, SOMNATH ROAD, VERAVAL VS THE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, RAJKOT SHRI KISHAN DAMJI BHENSALA PROP. NARENDRA SEA FOODS, BHIDIYA PLOT, SOMNATH ROAD, VERVAL VS THE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, RAJKOT SHRI MANSUKH DAMJI BHENSALA PROP. KANAIYA SEA FOODS, SHYAM , B/H. RAM BUNGLOWS, KRISHNA NAGAR, KHADKHAD, VERAVAL VS THE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, RAJKOT SHRI NARSHI DAMJI BHENSALA PROP. KISHAN SEA FOODS, SONAL NIWAS , NR. GARBI CHOWK, VERAVAL VS THE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, RAJKOT SHRI DHIRAJLAL LAKHAMBHAI BHENSALA NAVDURGA BULGLOW , B/H. KRUSHNA KRUPA BUNGLOW, STREET NO.6, NR. PRATIK APARTMENT, KHADKHAD, VERAVAL VS T HE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, RAJKOT / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI M. J. RANPURA, AR ASSESSEE BY : SHRI RANJIT SINGH, CIT DR IT (SS) A NO S . 55,68 - 72 / RJT /20 1 8 AY 201 2 - 13 - 2 - / DATE OF HEARING : 24 / 02 /20 20 / DATE OF PRONOUNCEMENT : 28 / 02 / 20 20 PER BENCH : THE SE INSTANT APPEAL S FILED BY THE DIFFERENT ASSESSEE S ARE DIRECTED AGAINST THE ORDER S DATED 25 . 01 .201 8 & 13.02.2018 IN THE RESPECTIVE MATTERS PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 11 , AHMEDABAD ARISING OUT OF THE ORDER DATE D 2 9 . 11 .201 6 PASSED BY THE AC IT, CENTRAL CIRCLE 2, RAJKOT UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT ) FOR THE ASSESSMENT YEAR (A.Y.) 20 12 - 13 . THE BUNCH OF APPEAL S RELATE TO IDENTICAL ISSUE OF ADDITION BY ESTIMATING GROSS PROFIT @ 7.5% AS AGAINST THE GROSS PROFIT ESTIMATED BY THE APPELLANT @ 5% ON ALLEGED UNACCOUNTED TURNOVER. SINCE THE ISSUE IS IDENTICAL IN ALL THE MATTERS, THESE ARE HEARD ANALOGOUS LY AND ARE BEING DISPOSED OFF BY A COMMON ORDER. IT(SS) A NO. 55/RJT/ 2018 FOR A.Y. 2012 - 13 IS TAKEN AS THE LEAD CASE. 2. THE FACTS OF THE CASE IS THIS THAT A SEARCH WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.03.20 15. NOTICE DATED 1 2.10.2015 UNDER SECTION 153 (A) OF THE A CT WAS ISSUED DIRECTING THE ASSESSEE TO FILE THE RETURN OF INCOME WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SU CH NOTICE WHEREUPON ON 12.07.20 16 THE ASSESSEE FILED HIS RETURN OF INCOME SHOWING THE INCOME A T RS.6,17, 140/. NOTICE UNDER SECTION 1 43(2) OF THE ACT DATED 08.11.20 16 FOLLOWED BY A DETAI LED QUESTIONNAIRE DATED 12.0 8 .20 16 ALONG WITH THE NOTICE UNDER SECTION 142(1) OF THE A CT WAS ISSUED. IT (SS) A NO S . 55,68 - 72 / RJT /20 1 8 AY 201 2 - 13 - 3 - 3. IT APPEARS FROM THE LOOSE PAPER SEIZED DURING THE COURSE OF SEARCH OF THE RESIDENTIAL PREMISES OF THE ASSESSEE THAT THE FAMILY MEMBERS OF GOPAL GROUP HAVE OWNED 18 FISHING BOATS BY WHICH FISH CATCHING BUSINESS HAS BEEN CARRIED OUT BY THE SAID FAMILY MEMBERS. FURTHER THAT FROM THE STATEMENT RECORDED FROM ONE SHRI LAKHA M BHAI D B H ENSHALA UNDER SECTION 132(4) OF THE ACT IT HAS BEEN DISCLOSED THAT THE INCOME EARNED FROM THESE BOARDS HAS NOT BEEN SHOWN BY THE BOAT OWNERS NEITHER IT IS SHOWN BY THEM IN THEIR BOOKS OF ACCOUNTS. IN FACT AS PER THE LOOSE PAPERS SEIZED IT WAS FOUND TH AT THE ASSESSEE BEING THE OWNER OF THE BOAT NAMELY HARSHAGANGA SOLD TOTAL FISHES WORTH OF RS. 46 , 82 , 918 / - INCOME OF WHICH HAS NOT BEEN SHOWN IN THE BOOKS OF ACCOUNTS WHEREUPO N SHOW CAUSE WAS ISSUED BY THE L EARNED ASSESSING O FFICER ASKING THE ASSESSEE TO EXPLAIN AS TO WHY THE GROSS PROFIT @ 20% ON THE UNACCOUNTED SALES OF RS. 46 , 82 , 918 / - SHOULD NOT BE ESTIMATED AND ADDED BACK TO THE TOTAL INCOME OF THE ASS ESSEE. THE ASSESSEE ON 22.11.20 16 SUBMITTED A WRITTEN REPLY CLARIFYING THE NATURE OF BUSINESS , AND FUR THER SUBMITTED THAT ESTIMATION OF GROSS PROFIT @20% IS NOT CORRECT TAKING INTO CONSIDERATION THE SOCIO - ECONOMIC BACKGROUND OF THE LOCAL FISHERMEN AND THE VARIOUS EXPENSES AS INCURRED FOR FISH CATCHING ACTIVITIES; IT WAS FURTHER SUBMITTED THAT THE BUSINESS PLUS/PROFIT REMAINED IN THE HANDS OF THE ASSESSEE OWED APPROXIMATELY 4 TO 5% ONLY. HOWEVER SUCH PLEA OF THE ASSESSEE WAS NOT FOUND TO BE ACCEPTABLE SINCE THE ASSESSEE WAS NOT BEEN ABLE TO PRODUCE ANY COGENT EVIDENCE OR PERSON IN SUPPORT OF HIS PLEA AND THE REFORE ESTIMATING THE GROSS PROFIT @ 20% THE L EARNED AO WORKED OUT THE UNACCOUNTED PROFIT AT RS. 9 , 36 , 584/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE WHICH W AS, IN TURN, RESTRICTED TO 7.5% . IT (SS) A NO S . 55,68 - 72 / RJT /20 1 8 AY 201 2 - 13 - 4 - 4 . AT THE TIME OF HEA RING OF THE INSTANT APPEAL THE L EARNED C OUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE GROSS PROFIT BE CONSIDERED TO BE RESTRICTED AT 5% TAKING INTO CONSIDERATION THE PARTICULAR BUSINESS ACTIVITIES CARRIED OUT BY THE ASSESSEE. ON THE OTHER HAND THE L EARNED D EPARTMENTAL R EPRESENTATIVE RELIE D UPON THE ORDER PASSED BY THE L D . CIT - A. WE HAVE HEARD THE R IVAL SUBMISSIONS MADE BY THE RESPECTIVE PARTIES, WE HAVE ALSO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. IT APPEARS THAT THE FISHING BOAT WAS PURCHASED ERECTED 20 YEA RS BACK FOR THE PURPOSE OF FISH CATCHING BUSINESS. BY THE PASSAGE OF TIME AFTER GRADUAL GROWTH AND CONCENTRATION IN THE BUSINESS OF TRADING AND EXPORTS , BOAT WAS GIVEN TO THE LOWER CLASS COMMUNITY. IN FACT THE ASSESSEE S FAMIL Y IS NOT OPERATING THE FISHING BOATS FOR CATCHING BUT THEY HAVE DEPUTED PEOPLE ON THE PORTS . I T ALSO APPEARS FROM THE STATEMENT RECORDED THAT THE LOOSE PAPERS SEIZED SHOWS FISHES PURCHASED BY VARIOUS PROPRIETARY TRADING CONCERNS OF THE GOPAL G ROUP FROM THE TANDEL & KHALASIS OF BOATS I.E. THE PERSON TO WHOM BOAT IS GIVEN. IT IS ALSO THE CASE OF THE ASSESSEE THAT SINCE THE ASSESSEE IS NOT INDIVIDUALLY CARRYING OUT ANY FISH CATCHING BUSINE SS THE QUESTION OF UNACCOUNTED S ELLS/INCOME EARNED FROM SUCH ACTIVITIES DOES NOT ARISE. IT WAS FURT HER POINTED OUT THAT THE INCOME EARNED BY SUCH BOAT OPERATORS IT(TANDEL/KHALASI) FROM SUCH SALE IS BELOW THE BASIC EXEMPTION LIMIT AND THEREFORE NO PAN PROCESSED OR RETURN OF INCOME FILED BY SUCH PERSONS . WE HAVE FURTHER CONSIDERED THE EXPLANATION GIVEN B Y THE ASSESSEE THAT A SUBSTANTIAL PORTION OF RECEIPTS ARE ERODED BY THE EXPENSES TOWARDS GENERATOR EXPENSES, GROCERY AND PROVISIONS, SALARY TO LABOURS, MAINTENANCE OF BOATS, COMMISSION TO THE AGENTS ETC . APART FROM THE WAS TAGE AND THE FISH IT (SS) A NO S . 55,68 - 72 / RJT /20 1 8 AY 201 2 - 13 - 5 - TAKEN BY THE LAB OURERS FOR THEIR SELF CONSUMPTION IS ALSO A MAJOR FACTOR IN REDUCING THE PROFIT MARGIN WHICH SEEMS TO BE GENUINE TAKING INTO CONSIDERATION THE SOCIO - ECONOMIC BACKGROUND OF THE LOCAL FISHERMEN AND THEREFORE WE FIND FORCE IN THE ARGUMENT ADVANCED BY THE L EAR NED AR FOR CONSIDERING THE GROSS PROFIT @ 5% ON UNACCOUNTED SALES. IN THAT VIEW OF THE MATTER WE DISPOSE OF THE APPEAL WITH THE DIRECTION UPON THE L EARNED AO TO CALCULATE THE GROSS PROFIT @ 5% ON THE UNACCOUNTED SALES AND TO PASS CONSEQUENTIAL RELIEF IN FA VOUR OF THE ASSESSEE . 5. IN THE RESULT ASSESSES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IT (SS) A NOS. 68 TO 72/RJT/2018 (A.Y. 2012 - 13): - 6. THE GROUNDS OF APPEAL AS ARGUED BY THE LD. AR IS IDENTICAL TO THAT OF THE ISSUE ALREADY DEALT WITH BY US IN IT (SS) A NO. 55/RJT/2018 FOR A.Y. 2012 - 13 AND IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES THE SAME SHALL APPLY MUTATIS MUTANDIS . HENCE, THESE GROUNDS OF APPEAL PREFER RED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7 . IN THE RESULT, APPEAL S FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE COURT ON 28 TH FEBRUARY , 2020 AT RAJKOT . SD/ - SD/ - ( WASEEM AHMED ) ACCOUNTANT MEMBER ( MADHUMITA ROY ) JUDICIAL MEMBER RAJKOT ; DATED, 28 / 02 /20 20 TANMAY DATTA , SR.PS TRUE COPY IT (SS) A NO S . 55,68 - 72 / RJT /20 1 8 AY 201 2 - 13 - 6 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, RA JKOT 6. / GUARD FILE . / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, RAJKOT 1. DATE OF DICTATION - / 02 /20 20 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER /02 /20 20 OTH ER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. - /02/2020 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT /02/2020 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28 /02/2020 6. D ATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER .. 8. DATE OF DESPATCH OF THE ORDER