VIPUL KUMAR KANTILAL JAIN, MUMBAI v. ASST CIT WD 14(3), MUMBAI

ITA 6131/MUM/2011 | 2006-2007
Pronouncement Date: 10-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 613119914 RSA 2011
Assessee PAN AGKPJ6666M
Bench Mumbai
Appeal Number ITA 6131/MUM/2011
Duration Of Justice 3 year(s) 2 month(s) 5 day(s)
Appellant VIPUL KUMAR KANTILAL JAIN, MUMBAI
Respondent ASST CIT WD 14(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 10-11-2014
Date Of Final Hearing 19-02-2014
Next Hearing Date 19-02-2014
Assessment Year 2006-2007
Appeal Filed On 05-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI SANJAY ARORA ACCOUNTANT MEMBER ITA NO.6130 TO 6133/MUM/2011 (A.Y. 2005-06TO 2008-09) VIPUL KUMAR KANTILAL JAIN 13/15 SHYAM BHUVAN NO.1 FLAT NO.9 GAZDAR STREET CHIRA BAZAR MUMBAI-400 002 / VS. THE ACIT WARD 14(3) EARNEST HOUSE 6 TH FLOOR NARIMAN POINT MUMBAI-400 021. ( !' / // / APPELLANT) ( #$!' / RESPONDENT) P.A. NO.AGKPJ 6666 M !' % & % & % & % & /APPELLANT BY : SHRI M.N. VAISHNAV #$!' % & % & % & % & /RESPONDENT BY : SHRI RAJESH RANJAN PRASAD % '( / / / / DATE OF HEARING : 23.09.2014 )*+ % '( / DATE OF PRONOUNCEMENT : 10.11.2014 / / / / O R D E R PER JOGINDER SINGH (JM) : THIS BUNCH OF FOUR APPEALS IS BY THE ASSESSEE FOR ASSESSMENT YEARS 2005-06 TO 2008-09 CHALLENGING THE IMPUGNED O RDERS ALL DATED 20/6/2011 OF THE LD. FIRST APPELLATE AUTHORITY. ITA NO.6130-6133/MUM/2011 VIPUL KUMAR KANTILAL JAIN 2 2. DURING HEARING OF THESE APPEALS SHRI M.N. VAISHNA V LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT IDENTICAL I SSUE IS INVOLVED IN THESE APPEALS THEREFORE THESE CAN BE DISPOSED OFF BY A COMMON AND CONSOLIDATED ORDER. SHRI RAJESH RANJAN PRASAD LD. CIT-DR HAD NO OBJECTION TO THE SUGGESTION OF THE LD. AR. 3. THE FIRST GROUND RAISED IN THESE APPEALS PERTAIN S TO NOT CONSIDERING THE GROUND NOS.3 AND 4 OF THE ASSESSEE IN GROUNDS OF APPEAL RAISED BEFORE HIM TO THE EFFECT THAT ADEQUATE OPPOR TUNITY OF HEARING WAS NOT PROVIDED TO THE ASSESSEE AND AN EXPARTE ORDER W AS PASSED. THIS ASSERTION OF THE ASSESSEE WAS STRONGLY CONTESTED BY THE LD. DR. 3.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT SURVEY ACTION U/S. 133A OF THE I.T. ACT 1961 (HEREIN AFTER THE A CT) WAS CARRIED OUT ON 26/5/2007 WHEREIN IT WAS FOUND THAT CERTAIN PERSONS PRESENT IN THE PREMISES WERE HAVING HUGE CASH WITH THEM. SAFE DEP OSIT VAULTS WERE THERE AT THE PREMISES AND THE SAME WERE GIVEN ON RE NT TO VARIOUS PERSONS. THESE PERSONS ADMITTED OF HAVING KEEPING C ASH IN CERTAIN LOCKERS IN THE SAID PREMISES. THE PREMISES AND SUCH LOCKERS WERE COVERED BY SEARCH ACTION U/S. 132 OF THE ACT. THE A SSESSEE IS IN THE BUSINESS OF CHEQUE DISCOUNTING AND EARNING COMMISSI ON THEREFROM. THE ASSESSEE WAS FOUND CARRYING CASH OF RS.5.80 LACS WI TH HIM AND SEARCH OF ITA NO.6130-6133/MUM/2011 VIPUL KUMAR KANTILAL JAIN 3 LOCKER NO.589 OF THE ASSESSEE LED TO RECOVERY OF RS .25.00 LACS IN CASH. THE AMOUNT OF RS.30.00 LACS WAS SEIZED DURING SEARC H ACTION. HOWEVER THE ASSESSEE ADMITTED THE CASH AMOUNT OF RS.30.80 L ACS TO BE UNEXPLAINED AND AGREED TO PAY THE TAX THEREON. THE ASSESSEE IS ALSO OPERATING ACCOUNT NO.100102000064576 WITH IDBI BANK JHAVERI BRANCH BAZAR IN THE NAME OF M/S. K.C. FAB IN WHICH HUGE CASH WAS FOUND TO BE DEPOSITED FOR THE LAST SEVERAL YEARS AG AINST WHICH CHEQUES WERE ISSUED TO INTENDING PARTIES FOR ACCOMMODATION PURPOSES. THE ASSESSEE IS EARNING COMMISSION INCOME FROM SUCH PAR TIES. THE DETAILS OF ASSETS FOUND/SEIZED ARE AVAILABLE IN THE ASSESSMENT ORDER. STATEMENT OF THE ASSESSEE WERE RECORDED AS DETAILED IN PARA 3.9 (PG-4) OF THE ASSESSMENT ORDER. DURING POST SEARCH ENQUIRIES THE STATEMENT OF THE ASSESSEE WAS RECORDED ON 11/6/2007 U/S. 131 OF THE ACT WHEREIN THE ASSESSEE TENDERED THAT HE IS NOT IN A POSITION TO F URNISH THE DETAILS OF MARKET PARTIES AND ADMITTED THE ENTIRE CASH AS HIS INCOME FROM UNDISCLOSED SOURCES. IN THE AFORESAID BANK ACCOUNT IT WAS ALSO NOTICED THAT CASH AGGREGATING TO RS.90 50 358/- WAS FOUND D EPOSITED ON VARIOUS DATES THE DETAILS OF WHICH ARE AVAILABLE IN PARA-3 .10(VI) ON PAGES 6 TO 8 OF THE ASSESSMENT ORDER. THE STATEMENT TENDERED BY THE ASSESSEE IS ALSO REPRODUCED AT PAGES 9 TO 12 OF THE ASSESSMENT ORDER . ITA NO.6130-6133/MUM/2011 VIPUL KUMAR KANTILAL JAIN 4 3.2 WE HAVE GONE THROUGH THE STATEMENT TENDERED BY THE ASSESSEE AND FOUND THAT THE ASSESSEE NEITHER GAVE ANY DETAILS OF THE PARTIES NOR ANY EXPLANATION OF THE CASH AND ADMITTE D THAT HE WAS IN THE BUSINESS OF CHEQUE DISCOUNTING AND FURTHER STATED THAT THE IMPUGNED CASH MAY BE TREATED AS UNDISCLOSED INCOME OF THE AS SESSEE . THE ASSESSEE ALSO DID NOT FURNISH THE NAME AND ADDRESSE S OF HIS CLIENTS/ACTUAL BENEFICIARIES IF ANY. THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICE ON 29/12/2009 TO WHICH NO REPLY WAS FURNISHE D BY THE ASSESSEE. THE ASSESSMENT WAS THUS COMPLETED U/S. 144 THEREFO RE THE CONTENTION OF THE ASSESSEE THAT NO OPPORTUNITY WAS GIVEN IS WI THOUT ANY SUBSTANCE THUS THIS GROUND OF THE ASSESSEE IS DISMISSED IN TH E APPEALS BEFORE US. 4. THE NEXT EFFECTIVE GROUND RAISED/ARGUED BY THE A SSESSEE PERTAINS TO SUSTAINING THE ORDER OF THE AO MAKING T HE DISALLOWANCE @7% OF THE AMOUNTS INVOLVED IN THESE APPEALS . BROADLY IT WAS CONTENDED THAT SINCE THE ASSESSEE IS IN THE BUSINESS OF BILL DISCO UNTING THE ESTIMATION OF INCOME AT SUCH A HIGHER RATE OF 7% IS QUITE UNJU STIFIED. IT WAS ASSERTED THAT IN THE SIMILAR LINE OF BUSINESS THE C OMMISSION IS ALLOWABLE FROM 0.05% TO 1% . ON THE OTHER HAND THE LD. DR ST RONGLY DEFENDED THE ORDER OF THE LD. CIT(A) BY SUBMITTING THAT EVEN IN THE CASE OF PRESUMPTIVE INCOME U/S.144AD THE NET PROFIT MAY BE @ 8% U/S. 44AF @5% AND U/S. 44BB @10% AND U/S.44BBA @5%. THE LD. D R ALSO ITA NO.6130-6133/MUM/2011 VIPUL KUMAR KANTILAL JAIN 5 INVITED OUR ATTENTION TO THE DECISION IN COMMISSIONER SALES TAX VS. H.M. YUSUF ALI (90 ITR 201)(SC) . WE NOTE THAT EVEN THE HON'BLE APEX COURT HAS OBSERVED THAT WHILE ESTIMATING THE ESCAPED INCO ME IT IS INEVITABLE THAT THERE IS SOME GUESS WORK HOWEVER THE BEST JUD GMENT/CONCLUSION SHOULD BE RATIONAL. WE FURTHER NOTE FROM THE FACTS AVAILABLE ON RECORD NEITHER THE AO NOR THE CIT(A) HAS GIVEN ANY BASIS F OR REACHING TO A PARTICULAR CONCLUSION. AT THE SAME TIME THE ASSESSE E HAS ALSO NOT EXPLAINED AS TO HOW THE ESTIMATION OF INCOME SHOULD BE BELOW ONE PERCENT. THEREFORE KEEPING IN VIEW THE PROVISIONS PROVIDED UNDER THE ACT FOR PRESUMPTIVE INCOME FACTS AVAILABLE ON RECO RD AND OTHER JUDICIAL DECISIONS CITED FROM BOTH SIDES WE ARE OF THE VIEW THAT SOMEWHERE A REASONABLE ESTIMATION HAS TO BE MADE TO CUT SHORT T HE ISSUE AND PUT THE LITIGATION TO REST. ACCORDINGLY WE ASKED BOTH SIDE S TO SUGGEST THE PERCENTAGE. THE LD. COUNSEL FOR THE ASSESSEE LEFT I T TO THE BENCH WHEREAS THE LD. DR SUPPORTED THE VIEW TAKEN IN THE IMPUGNED ORDER. KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE AND TO PUT AN END TO THE LITIGATION WE ARE OF THE HUMBLE OPINION THAT IT WILL MEET THE ENDS OF JUSTICE IF THE INCOME OF THE ASSESSEE IS ESTIMATED @ 4%. WE ARE MA KING IT CLEAR THAT OUR ESTIMATION MAY NOT BE QUOTED AS A PRECEDENT AS THE SAME HAS BEEN ARRIVED AT THE PECULIAR FACTS AND THE CIRCUMSTANCES BEFORE US. THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.6130-6133/MUM/2011 VIPUL KUMAR KANTILAL JAIN 6 5. FINALLY ALL THE APPEALS OF THE ASSESSEE ARE PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DAY OF NOVEM BER 2014 . % )*+ -. 10.11.2014 * % 4 SD/- SD/- ( SANJAY ARORA ) ( JOGINDER SINGH ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; - DATED : 10 TH NOVEMBER 2014. JV. % #'5 65+' % #'5 65+' % #'5 65+' % #'5 65+'/ COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT. 3. 7 ( ) / THE CIT MUMBAI. 4. 7 / CIT(A)-13 MUMBAI 5. 5:4 #' / DR ITAT MUMBAI 6. 4;< = / GUARD FILE. / BY ORDER $5' #' //TRUE COPY// > >> >/ // /? @ ? @ ? @ ? @ (DY./ASSTT. REGISTRAR) / ITAT MUMBAI