TRISHUL ENTERPRISES, v. DCIT CEN CIR 1, MUMBAI

ITA 230/MUM/2014 | 2008-2009
Pronouncement Date: 24-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 23019914 RSA 2014
Assessee PAN AADFT1159N
Bench Mumbai
Appeal Number ITA 230/MUM/2014
Duration Of Justice 2 year(s) 9 month(s) 15 day(s)
Appellant TRISHUL ENTERPRISES,
Respondent DCIT CEN CIR 1, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 24-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 26-07-2016
Assessment Year 2008-2009
Appeal Filed On 09-01-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH ES E MUMBAI BEFORE SHRI RAJENDRA HONBLE ACCOUNTANT MEMBER AND SHRI C.N. PRASAD HONBLE JUDICIAL MEMBER ITA NO. 230 / MUM /201 4 (ASST. YEAR : 200 8 - 0 9 ) TRISHUL ENTERPRISES FLAT NOS. 15 & 17 SECTOR - 7 NEAR HIRANANDANI COMPLEX KHARGHAR. VS. D CIT CENTRAL CIRCLE - 1 THANE. PAN NO. AADFT 1159 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARI S. RAHEJA ADV. DEPARTMENT BY : SHRI MANJUNATHA SWAMY - D R DATE OF HEARING : 26 / 0 7 /201 6 . DATE OF PRONOUNCEMENT : 24 / 1 0 /201 6 . O R D E R PER C.N. PRASAD JUDICIAL MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD.CIT(A) - 1 THANE DATED 31/08/2010 FOR THE ASSESSMENT YEAR 2008 - 09 ARISING OUT OF THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 153B(B) OF THE ACT. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS APPEAL IS THAT THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 95 67 732/ - ON ACCOUNT OF ALLEGED UNACCOUNTED INCOME . 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE. A S EARCH AND SEIZURE ACTION IN PATEL GROUP OF CASES WAS CONDUCTED ON 17/01/2008 ALONG WITH SURVEY PROCEEDINGS UNDER SECTION 133A SIMULTANEOUSLY. ONE OF THE CASES COVERED IN THESE 2 ITA NO. 230 / MUM /201 4 A.Y. 2008 - 09 CASES WAS THE ASSESSEE NAMELY TRISHUL ENTERPRISES . DURING THE COURSE OF SEARCH AND SURVEY ACTION CERTAIN INCRIMINATING DOCUMENTS W ERE FOUND AND SEIZED/ IMPOUNDED IN THE FORM OF LOOSE SHEETS WHEREIN CERTAIN ENTRIES OF RECEIPTS OF CASH AND EXPENSES WERE RECORDED. THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE NET OF UNACCOUNTED INCOME AND THE EXPENSES R ECORDED IN THE LOOSE SHEETS IS AT RS. 2 45 67 672/ - AND SINCE THE ASSESSEE HAD ALREADY ADMITTED UNDISCLOSED INCOME ON ACCOUNT OF UNACCOUNTED RECEIPTS IN THE RETURN OF INCOME AT RS. 1 50 00 000/ - TH E ASSESSING OFFICER ADDED THE BALANCE OF RS.95 67 732/ - AS UNACCOUNTED RECEIPTS IGNORING THE SUBMISSIONS OF THE ASSESSEE THAT IN THE COURSE OF BUSINESS ASSESSEE RECEIVE D ON MONEY AND THE ENTIRE ON MONEY CANNOT BE TAXED AND ONLY THE PROFIT EMBEDDED IN SUCH ON MONEY WHICH WAS RECEIVED IN THE COURSE OF BUSINESS HAS TO BE TAXED AND THE ASSESSEE CONTENDED THAT THE PROFIT MARGIN AFTER INCURRING OF EXPENDITURE WOULD BE AT 8% AND T HEREFORE HE REQUESTED THE ASSESSING OFFICER TO ADOPT 8% INSTEAD OF TREATING THE ENTRIES ON MONEY AS UNACCOUNTED INCOME OF THE ASSESSEE. HOWE VER THE ASSESSING OFFICER TREATED THE NET OF RECEIPTS OF RS. 95 67 732/ - AS PER LOOSE SHEETS AS UNACCOUNTED INCOME OF THE ASSESSEE. 4 . ON APPEAL LD.CIT(A) SUSTAINED THE ORDER OF THE ASSESSING OFFICER IN TREATING THE ENTIRE ON MONEY AS INCOME OF THE ASSESSEE. 5. IN THE COURSE OF HEARING AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ON IDENTICAL SITUATION IN ONE OF THE GROUP CASES NAMELY M/S. PLATINUM PROPERTIES THIS ISSUE HAS BEEN CONSIDERED AND IT HAS BEEN HELD TH A T ONLY THE REASONABLE AMOUNT OF PROFIT WHICH THE ASSESSEE WOULD HAVE EARNED SHOULD BE ADDED AS UNDI S CLOSED INCOME AND NOT THE GROSS RECEIPTS . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PLACED A COPY OF THE ORDER OF THE COORDINATE BENCH OF TH IS TRIBUNAL IN THE CASE OF M/S. PLATINUM PROPERTIES VS. DCIT IN ITA NO. 2600/MUM/2012 DATED 12/09/2014 AND REQUESTED TO FOLLOW THE SAME. 3 ITA NO. 230 / MUM /201 4 A.Y. 2008 - 09 6 . DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORIT I ES BELOW . 7 . WE HAVE HEA R D THE RIVAL SUBMISSIONS PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION RELIED ON BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. A PERUSAL OF THE SAID DECISION WE FIND THAT ALMOST ON AN IDENTICAL FACTS IN ONE OF THE ASSESSEES GROUP CASES I.E. M/S. PLATINUM PROPERTIES (SUPRA) THE COORDINATE BENCH HELD THAT WHAT CAN BE TAXED IS THE UNDISCLOSED INCOME AND NOT THE ENTIRE GROSS RECEIPTS I.E. A REASONABLE AMOUNT OF PROFIT AND NOT THE GROSS RECEIPTS. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS AND REAL ESTATE . IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE IS RECEIVING ON MONEY IN THE COURSE OF ITS BUSINESS . I N SUCH CIRCUMSTANC ES THE COORDINATE BENCH HELD THAT THE REASONABLE PROFIT SHOULD BE CONSIDERED AT 8% OF UNACCOUNTED RECEIPTS OBSERVING AS UNDER: - 10. A PERUSAL OF THESE UNACCOUNTED ENTRIES SHOWS THAT THE ASSESSEE WAS MAKING ENTRIES OF THE ON - MONEY RECEIVED BY IT DURING TH E COURSE OF ITS BUSINESS. UNDER SECTION 153A THE ASSESSING OFFICER HAS THE POWER TO ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH ASSESSMENT YEAR IN CASE OF PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT. THUS THE ASSESSING OFFICER HAS THE POWER TO ASSESS OR REASSESS THE TOTAL INCOME OF THE ASSESSEE. WHAT C A N BE TAXED IS THE UNDISCLOSED INCOME AND NOT THE UNDISCLOSED RECE I PTS THIS MEANS THAT ONLY A REASONABLE AMOUNT OF PROFIT WHICH THE ASSESSEE COULD HAVE EARNED CAN BE ADDED. SEIZED PAPER INDICATES ASSESSEE WAS RECEIVING ON - MONEY IN THE ORDINARY COURSE OF ITS BUSINESS. EVEN THE UNACCOUNTED EXPENDITURES ARE ALSO REFLECTED IN THE SEIZED PAPERS. 10.1 CONSIDER I NG THE FACTS IN TOTALITY IN OUR CONSIDERED OPINION A REASONABLE PROFIT SHOULD BE TAXED WHICH IS EMBEDDED IN THE TOTAL UNACCOUNTED GROSS RECEIPTS AND THEREFORE 8% SHOULD MEET THE END OF JUSTICE. WE ACCORDINGLY DIREC T THE ASSESSING OFFICER TO RE - COMPUTE THE UNDISCLOSED INCOME BY TAKING 8% AS NET PROFIT RATIO ON TOTAL UNACCOUNTED RECEIPTS. SINCE WE HAVE DIRECTED TO ESTIMATE THE PROFIT AT 8% ALL THE EXPENDITURES ARE DEEMED TO BE ALLOWED. 4 ITA NO. 230 / MUM /201 4 A.Y. 2008 - 09 8 . FACTS AND CIRCUMSTANCES BEING IDENTICAL FOLLOWING THE COORDINATE BENCH DECISION WE DIRECT THE ASSESSING OFFICER TO RE - COMPUTE THE UNDISCLOSED INCOME BY TAKING 8% AS NET PROFIT ON UNACCOUNTED RECEIPTS OF RS. 95 67 732/ - ADDED BY THE ASSESSING OFFICER . AS WE HAVE DIRECTED TO ESTIMATE THE PROFIT AT 8% OF THE NET RECEIPTS OF RS.95 67 732/ - ALL THE EXPENDITURE S ARE DEEMED TO BE ALLOWED. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS PAR T LY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 4 TH OCTOBER 2016 S D / - S D / - ( RAJENDRA ) ( C.N. PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 4 TH OCT. 201 6 . VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T. MUMBAI