Smt. Simran Kaur, Kanpur v. ACIT, Kanpur

ITA 713/LKW/2005 | misc
Pronouncement Date: 11-04-2014 | Result: Dismissed

Appeal Details

RSA Number 71323714 RSA 2005
Bench Lucknow
Appeal Number ITA 713/LKW/2005
Duration Of Justice 8 year(s) 6 month(s) 25 day(s)
Appellant Smt. Simran Kaur, Kanpur
Respondent ACIT, Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 11-04-2014
Date Of Final Hearing 27-02-2014
Next Hearing Date 27-02-2014
Assessment Year misc
Appeal Filed On 16-09-2005
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.713/LKW/2005 BLOCK PERIOD ENDING ON 26/04/2002 SMT. SIMRAN KAUR 111/69 ASHOK NAGAR KANPUR. VS. A.C.I.T. CENTRAL CIRCLE - V KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED ON BEHALF OF ASSESSEE AGAINST THE ORDER OF CIT(A) INTER ALIA ON VARIOUS GROUNDS WHICH ARE AS UNDER: 1. BECAUSE THE APPELLANT CANNOT BE SAID TO BE A 'PERSON' SUBJECTED TO A VALID SEARCH U/S 132(1) AS THE PRE - REQUISITE CONDITION FOR THE INITIATION OF SEARCH WAS LACKING IN THE CASE OF THE ASSESSEE AND CONSEQUENTLY THE BLOCK ASSESSMENT ORDER AS HAVE BEEN PASSED IN HER CASE IS WHOLLY ILLEGAL. WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION AS COMPUTED BY THE LEARNED ASSESSING OFFICER AT RS.6 00 000 / - AS UNDISCLOSED INCOME WHICH IS MADE UP AS UNDER : - A) PROFIT IN DEALING OF CARS OF VARIOUS BRANDS RS.4 00 000/ - B) INVESTMENT IN BUSINESS OF DEALING IN CARS RS.2 00 000/ - APPELLANT BY SHRI P. K. KAPOOR C.A. RESPONDENT BY SHRI VIVEK MISHRA CIT D.R. DATE OF HEARING 03/03/2014 DATE OF PRONOUNCEMENT 1 1 / 0 4 / 2 0 1 4 2 3.1 BECAUSE THE LEARNED AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT THE APPELLANT DID NOT CARRY ON ANY BUSINESS OF DEALING IN CARS AT HER OWN AND THE INCOME EARNED BY HER WAS BY WAY OF COMMISSION FOR RENDERING VARIOUS SERVICES WHICH ALREADY STOOD FULLY RECORDED AND THE COMPUTATION OF INCOME OF RS.4 00 000 / - AS A PROFIT ON PRESUMPTIVE BASIS THAT THE ASSESSEE DEALT IN SALE AND PURCHASE OF CARS IS WHOLLY ILLEGAL AND UNWARRANTED. 3.2 BECAUSE THE APPELLANT HAD RENDERED DUE AND FULL EXPLANATION WITH REFERENCE TO THE LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH AT HER BUSINESS PREMISES AND VIEW TO THE CONTRARY AS HAVE BEEN TAKEN BY THE LEARNED AUTHORITIES BELOW IS WHOOLY ERRONEOUS. 3.3 BECAUSE THE ADDITION OF RS.4 00 000/ - ON ACCOUNT OF PROFIT ALLEGED TO HAVE BEEN EARNED BY THE APPELLANT FROM DEALING IN CARS STANDS WHOLLY VITIATED AS THE SAME IS BASED ON NON - APPRECIATION OF NATURE OF LOOSE PAPERS VARIOUS EVIDENCES INCLUDING THE AFFIDAVIT OF THE HUSBAND OF THE APPELLANT WHICH WAS PLACED BEFORE THE ASSESSING OFFICER AND THE ADDITION SO MADE IS BASED ON EXTRANEOUS MATERIAL AND INCORRECT APPRECIATION OF PROVISIONS OF LAW. 4.1 BECAUSE THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THAT THE APPELLANT HAD MADE INVESTMENT IN THE BUSINESS OF DEALING IN CARS AND THEREBY SUSTAINING THE ADDITION OF RS.2 00 000 / - ON THIS SCORE. 4.2 BECAUSE THE APPELLANT HAD PLACED ON RECORD PLETHORA OF MATERIAL WHICH WENT TO PROVE CONCLUSIVELY THAT THE APPELLANT HA S BEEN EARNING INCOME BY WAY OF COMMISSION ON DEALING IN CARS (AT THE TIME OF MATURITY OF DEALINGS) AND NO INVESTMENT WHAT S OEVER HAS BEEN MADE BY HER IN SUCH BUSINESS NOR THE SAME WAS REQUIRED TO BE MADE. 4.3 BECAUSE IN ANY CASE THERE BEING NO MATERIAL OR INFORMATION 3 AVAILABLE ON RECORD ABOUT THE INVESTMENT ALLEGED TO HAVE BEEN MADE BY THE APPELLANT NO ADDITION ON THIS SCORE COULD HAVE BEEN MADE IN THE BLOCK ASSESSMENT OF THE APPELLANT. 5. BECAUSE IN ANY CASE AND WITHOUT PREJUDICE TO THE FOREGOING GRO UNDS THE COMPUTATION OF UNDISCLOSED INCOME AT AN AGGREGATE SUM OF RS.6 LAKHS IS WHOLLY ERRONEOUS ARBITRARY AND EXCESSIVE. 6. BECAUSE THE APPELLANT DISPUTES THE LEVY OF INTEREST U/S 158 BFA(1) ON THE GROUND THAT THE DELAY IN FILING THE RETURN WAS NOT ATT RIBUTABLE TO HER. 7. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS LAW AND PRINCIPLES OF NATURAL JUSTICE. 2. WITH REGARD TO GROUND NO. 1 RELATING TO VALIDITY OF SEARCH THE LEARNED COUNSEL FOR THE ASSESSEE HAS ADMITTED THAT THIS GROUND IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DR. A. K. B ANSAL 93 DTR (ALL) 438 IN WHICH IT HAS BEEN HELD THAT THE TRIBUNAL WHILE DECIDING AN APPEAL AGAINST BLOCK ASSESSMENT CANNOT LOOK INTO THE VALIDITY OF SEARCH OPERATION. COPY OF THE JUDGMENT IS PLACED ON RECORD AND ON ITS CAREFUL PERUSAL WE FIND THAT WHILE ADJUDICATING THE IMPUGNED ISSUE THE HON'BLE HIGH COURT HAS TAKEN INTO ACCOUNT THE VARIOUS JUDICIAL PRONOUNCEMENTS AND THE ORDER OF THE LARGER BENCH OF THE TRIBUNAL PASSED IN THIS REGARD AND HAVE COME TO THE CONCLUSION THAT NEITHER THE ASSESSING OFFICER N OR THE TRIBUNAL IN APPEAL CAN SUMMON AND EXAMINE THE WARRANT OF AUTHORIZATION FOR THE PURPOSE OF EXAMINING WHETHER THERE EXISTED REASONS TO BELIEVE ON THE MATERIALS BEFORE THE COMPETENT AUTHORITY TO ORDER SEARCH U/S 132(1) OF THE INCOME TAX ACT (HEREINAFTE R REFERRED TO AS THE ACT) . SINCE THE IMPUGNED ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE WE FIND NO MERIT IN THIS GROUND AND WE DISMISS THE SAME. 4 3. REST OF THE GROUNDS I.E. GROUND NO. 2 TO 5 ON MERIT RELATE TO ADDITION OF RS.4 00 000/ - AS PROFIT IN DEALING IN CARS OF VARIOUS BRANDS AND RS.2 00 000/ - AS INVESTMENT IN THE SAID BUSINESS . 4. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ON THE ISSUE AR E THAT DURING THE COURSE OR SEARCH CONDUCTED U/S 131(2) OF THE ACT IN THE CASE OF M/S GANDHI MOTORS WHOSE PROPRIETOR IS SMT. SIMRAN KAUR (THE ASSESSEE) WIFE OF SHRI JASWANT SINGH . VARIOUS DOCUMENTS/ INCRIMINATING MATERIALS WERE FOUND INCLUDING THE LOOSE PAPERS AND DIARIES EVIDENCING THE SALES AND PURCHASE TRANSACTIONS OF VEHICLES. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE NATURE OF TRANSACTIONS RELATING TO PURCHASE AND SALE OF CARS AS RECORDED IN THE SEIZED DOCUMENTS AND IN RESPONSE THERETO IT WAS ARGUED THAT ALL THE TRANSACTIONS RECORDED IN THE LOOSE PAPERS RELATE TO THE LIAISONING WORK WITH RTO AND THE ASSESSEE WAS NOT INVOLVED IN SALE AND PURCHASE TRANSACTIONS OF CAR ETC. THE INFORMATION S GATHERED FROM THE SEIZED MATERIAL ENQUIRY FROM RTO STATEMENT S OF VARIOUS PERSONS RECORDED AND POST SEARCH INQUIRIES ARE SUMMARIZED BY THE ASSESSING OFFICER IN ITS ORDER IN PARA 8 WHICH ARE REPRODUCED HEREUNDER FOR THE SAKE OF REFERENCE: (A) CLEAR DETAILS OF COMPLETION OF SALE & PURCHASE TRANSACTIONS IN AN NEXURE BK - 8 WHICH HAS DETAILED DESCRIPTION OF REGISTRATION NO. OF VEHICLES NAMES O F PURCHASER & SELLER IN SOME CASES CHASSIS & ENGINE NO. IN SOME CASES SPECIFIC A MO UNTS ALSO ARE BALANCES AGAINST THE NAMES. SHRI HANISH RAMCHANDANL AND SHRI SUNIL KUMAR AG ARWAL BOTH OF WHOM ARE ESTABLISHED DEALERS IN SALE & PURCHASE OF VEHICLES ARE THE MAIN ASSOCIATES OF THE ASSESSEE IN THIS BUSINESS AND THEIR NAMES FRE QUENTLY APPEARS IN ANNEXURE BK - 8 OF P ANCHNAMA DRAWN AT THE BUSINESS PREMISES OF M/ S GANDHI MOTORS (FOR EX AMPLE - ***** ) (B) THE ADVERTISEMENTS GIVEN BY M/ S GANDHI MOTORS IN THE LOCAL NEWSPAPERS CLEARLY DEFINES THE BUSINESS OF ASSESSEE AS SALE & PURCHASE OF OLD & NEW CARS AS WELL AS FINANCING FOR CARS. 5 THERE WERE AS MANY AS SIX A DVERTISEMENTS PUBLISHED IN JULY 2001. FOR EXAMPLE THE ADVERTISEMENT PUBLISHED IN DAINIK JAGARAN ON 01.07.2001 READS AS UNDER: - 'GANDHI MOTORS - 294760 546628 9838005044 839036208 THIS ADVERTISEMENT IS SUFFICIENT PROOF OF NATURE OF THE BUSINESS OF ASSESSEE AS SALE & PURCHASE OF N EW & OLD CARS AS IS CORROBORATED WITH ENORMOUS EVIDENCES SPLASHED A L L OVER SEIZED MATERIAL. (C) PAGES NOS. 9 TO 14 OF LP - 18 AND LP - 24 OF PANCHNAMA DRAWN A T THE BUSINESS PREMISES OF M/ S GANDHI MOTORS HAVE AMPLE EVIDENCE OF VEHICLE NOS. AND NAMES OF PARTIES. THIS IS A LIST OF PROSPECTIVE CUSTOMERS OF NEW CARS WHICH APPEAR CRUCIAL FOR SALE OF NEW CARS. (D) ANNEXURE LP - 35 OF PANCHNAMA DRAWN AT THE BUSINESS PREMISES OF M/ S GANDHI MOTORS C ONTAINS FOUR BEARER CHEQUES OF HANISH RAMCHANDANI & SUNIL KUMAR AGARWAL FOR RS.25 000 / - RS.10 000 / - RS.85 000 / - & RS.40 000 / - AS SECURITY PAID TO M /S GANDHI MOTORS I N THE REGULAR COURSE OF SALE & PURCHASE OF VEHICLES FOR ENSURING GENUINENESS & COMPLETION OF SALES TRANSACTIONS OR ANY SIMILAR SETTLEMENT. THE SAME HAS BEEN ADMITTED BY SUNIL KUMAR AGARWAL AND HANISH RAMCHANDANI IN THE STATEMENTS OF OATH RECORDED ON 26.04.2002 AT THE TIME OF SEARCH IN THE BUSINESS PREMISES OF M/ S GANDHI MOTORS. THESE STATEMENT S AND ALSO STATEMENT OF SHRI HANISH RAMCHANDANI RECORDED ON 19.6.2002 DURING POST SEARCH INQUIRIES CONFIRM BUSINESS OF ASSESSEE PRIMARILY AS SALE AND PURCHASE OF CARS. (E) ANNEXURES LP - 4 5 6 11 16 19 & 27 OF PANCHNAMA DRAWN A T THE BUSINESS PREMISES O F M /S GANDHI MOTORS COMPRISES OF LOOSE PAPERS IN THE FORM OF ORIGINAL REGISTRATION CERTIFICATES OF VEHICLES BLANK SIGNED SALE LETTERS AND RECEIPTS ORIGINAL PURCHASE INVOICES LIST OF PURCHASES OF VEHICLES FROM AUTHORISED AGENCIES OF ESTABLISHED BRANDS OF CARS (MAINLY M /S 6 ROHAN MOTORS OF NOIDA) O RIGINAL CERTIFICATES OF TE M PORARY REGISTRATION. (F) VEHICLES (UP 78 X - 0652 - SANTRO UP 78 AD - 4610 MARUTI ZEN UP 78 S 4116 MARUTI - 800) FOUND PARKED AT BUSINESS PREMISES OF M /S GANDHI MOTORS . (G) NUMBER PLATES OF VEHICLES FOUND IN THE BUSINESS PREMISES OF M/ S GANDHI MOTORS AS UNDER : ( 1 ) UP78Y - 1775 ( 2 ) UP 78 U - 4545 ( 3 ) UP14CT - 0041 ( 4 ) UP 78 X - 9421 ( 5 ) UP78AD - 80 80 ( 6 ) UP 16 BT - 0042 ( 7 ) UP78U - 4658 ( 8 ) UP 78 S - 5912 ( 9 ) UP78 S - 0612 ( 10 ) UP16BT - 005 1 ( 11 ) UP78 Z - 2151 SOME OF THESE VEHICLES ARE FOUND RECORDED IN LOOSE PAPERS IN ANNEXURES BK - 08 LP - 4 5 6 11 16 19 & 27 OF PANCHNAMA DRAWN AT THE BUSINESS PREMISES OF M/ S GANDHI MOTORS. (H) DURING THE COURSE OF SEARCH & SEIZURE OPERATIONS POST SEARCH INQUIRIES AS WEL L A S DURING BLOCK ASSESSMENT PROCEED INGS THE STATEMENTS OF FOLLOW ING PERSONS CONCLUSIVELY PROVE THAT THE PRIMARY BUSINESS OF ASSESSEE IS SALE & PUR C HASE OF OLD & NEW CARS: - ( 1 ) STATEMENT OF SHRI HANISH RAMCHANDANI SON OF SHRI VASUDEV RAMCHANDANI 7/92 TILAK NAGAR KANPUR RECORDED DURING POST SEARCH INQUIRIES ON 19.06.2002 BY THE INVESTIGATION WING. IN THIS STATEMENT IT IS CLEARLY STATED THAT HE HAD TRANSACTED WITH M/ S GANDHI MOTORS FOR SALE OF HIS SANTRO CAR UP 78/X 0652 WITH M/ S GANDHI MOTORS WHO IN TURN PAID PAY ORDER OF RS.1 00 000 / - AND RS.22.000/ - IN CASH TO SHRI HANISH RAMCHANDANI. THIS CONFIRMS PAYMENT BY M/ S GANDHI MOTORS FOR PURCHASE OF CAR AND CLEARLY SHOWS INVESTMENTS BY M/ S GANDHI MOTORS IN PURCHASE OF CARS IN THEIR RE GULAR BUSINESS OF SALE & PURCHASE OF OLD & NEW CARS. 7 ( 2 ) THE STATEMENT OF SHRI JASWANT SINGH SON OF SHRI GURBHEJ SINGH RECORDED ON OATH ON 26.04.2002 DURING SEARCH WHICH CLEARLY STATES I N ANSWER TO QUESTION NO. 2 THAT M/ S GANDHI MOTORS DEALS IN SALE & PURCHASE OF CARS ON COMMISSION. SHRI JASWANT SINGH ALSO ADMITTED IN ANSWER TO QUESTION NOS. 4 & 5 THAT HE SALES OLD CARS AFTER PURCHASING THEM AND ALSO REPAIRING THEM. ( 3 ) STATEMENT OF SHRI SUNIL KUMAR RECORDED ON 26.04.2 0 02 AT THE TIM E OF SEARCH IN THE PREMISES OF M/S GANDHI MOTORS. IN THIS STATEMENT SHRI SUAIL KUMAR HAS STATED IN REPLY TO QUESTION NO. 11 THE MODUS OPERAND I OF SALE & PURCHASE OF CARS WHILE DEALING WITH M/ S GANDHI MOTORS. IN THIS STATEMENTS HE HAS ADMITTED THAT SELF CHEQ UES AND SUBSTANTIAL AMOUNTS ARE GIVEN TO M/S GARDHI MOTORS AS SECURITY FOR TAKING AWAY CARS FOR SOLICITING CUSTOMERS. ( 4 ) STATEMENT OF SHRI HANISH RAMCHANDANI RECORDED ON 31.09.2004 BEFORE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - V KANPUR (PRESEN T ASSESSING OFFICER) IN PURSUANCE OF SUMMONS ISSUED UNDER SE CTION 131 DURING BLOCK ASSESSMENT PROCEEDINGS IN THE CASE OF M/S GANDHI MOTORS. IN THIS STATEMENTS SHRI HANISH RAMCHANDANI STATED IN ANSWER TO QUESTION NOS. 2 & 3 THAT M/S GANDHI MOTORS ARE REGULA R DEALERS IN SALE & PURCHASE OF OLD CARS AND HE USE TO REFER HIS CUSTOMERS TO M/S GANDHI MOTORS. ( 5 ) LETTER DATED 27.05.2002 OF SHRI NARENDRA KUMAR GOGIA ADDRESSED TO THE JOINT DIRECTOR OF INCOME TAX (INV.) UNIT - 1 KANPUR ADMITTING THAT HIS ZEN CAR NO. UP 78 AD 4610 WAS PARKED FOR SALE THROUGH M/S GANDHI MOTORS IN T HE IR PREMISES. ( 6 ) LETTER DATED 05.06.2002 OF SHRI ATUL PORWAL AZAD NAGAR ETAWAH ADDRESSED TO THE JOINT DIRECTOR OF INCOME TAX (INV.) UNIT - L KANPUR ADMITTI N G THAT H IS ZEN CAR NO. UP 75/C - 0331 WAS SOLD THROUGH M/S GANDHI MOTORS. ( I ) THE LOOSE PAPERS SEIZED IN ANNEXURES LP - 16 OF PANCHNAMA DRAWN AT THE BUSINESS PREMISES OF M/S GANDHI MOTORS ARE SPECIFIC AND UNEQUIVOA L EXAMPLES OF MODUS OPERAND I OF 8 SALE AND PURCHASE OF OLD AND NEW CARS. IN THIS BUNCH DOCUMENTS RELATING TO PURCHASE OF CAR UP - 78R - 4921 FROM SMT. KAMLESH KAUR CAR UP - 78V - 3578 FROM M/ S FITNESS PLANET AND CAR UP - 78V - 1833 FROM DR. VINEET G U PTA AND THEIR SUBSEQUENT SALES HAVE ALSO BEEN SHOWN BY ASSESSEE IN HER RETURN OF INCOME FOR ASSESSMENT Y EAR 2002 - 03 BY WAY OF SHOWING PROFIT FROM SALE OF SUCH CARS. IN THESE CASES ASSESSEE MADE PAYMENTS TO THE SELLERS FROM HER BANK ACCOUNT BY CHEQUE AND RECEIVED PAYMENTS FROM PURCHASERS AFTER A SPAN OF PERIOD. THE EXAM PLES MAY BE NARRATED AS UNDER: - CAR NAME OF SELLER TRANSACTIONS OF PAYMENT TO SELLER AND DATE. NAME OF PURCHASER TRANSACTIONS OF PAYMENT TO SELLER AND DATE UP - 78V - 1833 MARUTI ZEN DR. VINEET GUPTA SOLD HIS CAR TO ASSESSEE. PAYMENT OF RS. 2 00 000 / - BY CHEQUE NO. 174607 DATED 29.8.2001 OF PUNJAB AND SINDH BANK BY ASSESSEE MS. PREETI CHHABRA PURCHASED CAR FROM ASSESSEE PAYMENT OF RS. 65 000 / - ON 6.9.2001 BY CHEQUE NO. 970113 R S 39 000 / - VIDE CHEQUE NO. 042638 DATED 11.9.2001 AND CHEQUE NO. 056691 DATED 3.9.2001 FOR RS.99 575 / - WHICH WAS DEPOS ITED IN THE BANK ACCOU NT OF ASSESSEE ON 21.9. 2001 UP - 78V - 3578 FITNESS PLANET PAYMENT OF RS. 2 00 000 / - BY CHEQUE NO. 174606 DATED 21.8.2001 OF PUNJAB AND SINDH BANK BYASSESSEE P. SAZITH PAY MENT ON 29.8 .2 001 BY CHEQ UE THE ABOVE EXAMPLES ALSO PROVE INVESTMENT IN PURCHASE OF CAR BY ASSESSEE. THE ABOVE TRANSACTIONS SHOW THAT THE ASSESSEE WAS NOT JUST COMMISSION AGENT. THE ASSESSEE WAS PURCHASING AND SELLING CARS IN HER OWN ACCOUNT AS EVIDENT FROM TIME LAG BETWEEN PURCHAS E AND SALE. 4.1 SPECIFIC QUERY WAS RAISED FROM THE ASSESSEE TO EXPLAIN THE VARIOUS TRANSACTIONS RECORDED IN THE LOOSE SHEETS FOUND DURING THE COURSE OF SEARCH. BUT THE ASSESSEE COULD NOT EXPLAIN ALL THE SPECIFIC TRANSACTIONS AND HAS TAKEN A PLEA THAT HE WAS NOT ENGAGED IN SALE AND PURCHASE OF CARS BUT 9 WAS DOING MERELY LIAISONING WORK WITH RTO AS A COMMISSION AGENT. THE ASSESSING OFFICER HAS REPRODUCED THE DETAILS OF TRANSACTIONS FOUND IN THE LOOSE PAPERS AND THE QUERIES RAISED FROM THE ASSESSEE IN PARA NO. 8.1 TO PARA NO. 10 OF ITS ORDER. HAVING CAREFULLY EXAMINED THE REPLY OF THE ASSESSEE IN THE LIGHT OF SEIZED MATERIALS THE ASSESSING OFFICER HAS ESTIMATED THE PROFIT @1 500/ - PER CAR IN THE CASE OF MARUTI 800 AND RS.3 500/ - PER CAR IN THE CASE OF SAN TRO ZEN ESTEEM CIELO INDICA ETC. AND ACCORDINGLY ESTIMATED THE PROFIT ON SALE OF VEHICLES AT RS.4 00 000/ - . T HE ASSESSING OFFICER HAS ALSO NOTED THAT THE ASSESSEE HAS PURCHASED THE OLD CARS AND AFTER GETTING IT REPAIRED IT WAS SOLD THUS HE ACCORDING LY ESTIMATED THE INVESTMENT IN BUSINESS OF SALE AND PURCHASE OF CAR FROM UNDISCLOSED SOURCES AT RS.2 00 000/ - . THIS BELIEF WAS FORMED ON THE BASIS OF THE SEIZED DOCUMENTS WHICH WERE DISCUSSED IN PARA 11 AT PAGE NO. 19 TO 22 OF ITS ORDER. ACCORDINGLY TO TAL ADDITION OF RS.6 00 000/ - WAS MADE. 5. THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A) AND REITERATED ITS CONTENTIONS THAT THE ASSESSING OFFICER HAS MADE ADDITION ON THE BASIS OF DUMB DOCUMENTS AFTER FORMING A BELIEF THAT THE ASSESSEE WAS ENGAGED IN SALES & PURCHASE OF OLD CARS WHEREAS THE ASSESSEE WAS ENGAGED ONLY IN THE BUSINESS OF LIAISONING WITH RTO OFFICE AS A COMMISSION AGENT. THE CIT(A) RE - EXAMINED THE ISSUE IN THE LIGHT OF SEIZED DOCUMENTS AND THE OBSERVATIONS OF THE ASSESSING OF FICER. BEING NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE THE CIT(A) CONFIRMED THE ADDITION. 6. NOW THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND REITERATED ITS CONTENTIONS AS RAISED BEFORE THE LOWER AUTHORITIES. THE COPIES OF THE STATEMENTS OF SHRI JASWANT SINGH SHRI HARISH RAM CHANDANI SHRI SUNIL KUMAR AGARWAL AND SHRI MANISH GUPT A RECORDED DURING THE COURSE OF SEARCH ARE PLACED ON RECORD FOR PERUSAL. THE COPIES OF PANCHNAMA ARE ALSO PLACED ON RECORD BUT THE COPY OF SEIZED MATERIAL ARE 10 NOT PLACED BEFORE US IN ORDER TO UNDERSTAND THE NATURE OF ENTRIES RECORDED THEREIN. IT WAS EMPH ATICALLY ARGUED ON BEHALF OF THE ASSESSEE THAT HE WAS ENGAGED IN LIAISONING WORK WITH RTO AND ALSO EARNING COMMISSION IN SALES AND PURCHASE OF VEHICLES/OLD CARS. HE WAS ALSO ARRANGING FINANCES FOR PURCHASE OF OLD CARS FROM KOTAK MAHINDRA AND WAS ALSO EARN ING COMMISSION FROM KOTAK MAHINDRA. 7. THE LEARNED D.R. ON THE OTHER HAND HAS SUBMITTED THAT THE ASSESSING OFFICER HAS COLLECTED THE SUFFICIENT MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE WAS ENGAGED IN SALES & PURCHASE OF OLD CARS AND WAS ALSO EA RNING COMMISSION. ON THE BASIS OF ENTRIES FOUND ON THE SEIZED MATERIAL THE ASSESSING OFFICER HAS ESTIMATED THE PROFIT @1 500/ - PER CAR IN THE CASE OF MARUTI 800 AND RS.3 500/ - PER CAR IN THE CASE OF SANTRO ZEN ESTEEM CIELO INDICA ETC. FROM THE SEIZE D MATERIALS IT WAS NOTED THAT THE ASSESSEE HAS SOLD 59 MARUTI 800 CARS AND 89 OF OTHER BRANDS. THE ENTRIES WITH REGARD TO SALE OF THESE VEHICLES WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND THAT IS WHY THE ASSESSING OFFICER HAS ESTIMATED THE SAL E AT RS.4 00 000/ - . SINCE THE SALES & PURCHASE OF OLD CARS WERE MADE OUTSIDE THE BOOKS OF ACCOUNT THE ASSESSING OFFICER HAS RIGHTLY ESTIMATED THE VALUE OF INVESTMENT AT RS.2 00 000/ - AND MADE THE ADDITION OF THE SAME. 8. HAVING HEARD THE RIVAL SUBMISSIO NS AND FROM PERUS AL OF THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW WE FIND THAT DURING THE COURSE OF SEARCH SUBSTANTIAL INCRIMINATING MATERIALS WERE FOUND BY THE REVENUE AUTHORITIES WHICH WERE THOROUGHLY EXAMINED BY THE ASSESSIN G OFFICER IN THE LIGHT OF THE EXPLANATIONS FURNISHED BY THE ASSESSEE. SINCE THE ENTRIES OF THE SALES & PURCHASE OF CARS RECORDED IN THE SEIZED MATERIAL WAS NOT DULY RECORDED OR FOUND IN THE REGULAR BOOKS OF ACCOUNT THE ASSESSING OFFICER WAS REQUIRED TO E STIMATE THE PROFIT EARNED BY THE 11 ASSESSEE ON THE SALE OF THESE CARS WHICH WERE RECORDED IN THE SEIZED MATERIAL. THOUGH THE ASSESSEE HAS FURNISHED HIS REPLY BEFORE THE ASSESSING OFFICER BUT COULD NOT SATISFACTORILY EXPLAIN THE SAME AS TO WHY THE ENTRIES FO UND IN THE SEIZED MATERIAL WERE NOT DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT. WE HAVE ALSO CAREFULLY EXAMINED THE STATEMENT RECORDED BY THE REVENUE AUTHORITIES AND ALSO THE ORDERS OF THE LOWER AUTHORITIES IN WHICH THE DETAILS OF SEIZED MATERIALS WERE DISCUSSED BY THE ASSESSING OFFICER. SINCE THE ASSESSEE HAS NOT FILED THE COPY OF SEIZED MATERIAL WE CANNOT DRAW ANY INFERENCE WITH REGARD TO THE VERACITY OF THE SEIZED MATERIAL. IN THE ABSENCE OF SEIZED MATERIAL WE HAVE EXAMINED THE STATEMENT RECORDED BY THE REVENUE AUTHORITIES AND THE DISCUSSION OF THE SEIZED MATERIAL MADE BY THE ASSESSING OFFICER AND WE FIND THAT THE ENTRIES IN THE SEIZED MATERIALS WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. UNDER THESE CIRCUMSTANCES THE ASSESSING OFFICER HAD NO OPTION BUT TO ESTIMATE THE PROFIT EARNED BY THE ASSESSEE ON SALES & PURCHASE OF OLD CARS. 8.1 WE HAVE ALSO CAREFULLY EXAMINED THE VARIOUS JUDGMENTS REFERRED TO BY THE ASSESSEE ON THE ISSUE THAT NO ADDITION CAN BE MADE IN THE ABSENCE OF INCRIMINATING M ATERIAL. THE JUDGMENTS REFERRED TO BY THE ASSESSEE IN THIS REGARD ARE AS UNDER: ( I ) COMMISSIONER OF INCOME - TAX VS RAJENDRA PRASAD GUPTA [2001] 248 ITR 350 (RAJ) ( II ) COMMISSIONER OF INCOME - TAX VS C.J. SHAH AND CO . [2000] 247 ITR 671 (BOM) ( III ) COMMISSIONER OF INCOM E - TAX VS SMT. USHA TRIPATHI [2001] 249 ITR 4 (ALL) ( IV ) ASHOK KUMAR RASTOGI VS. CIT [1991] 100 CTR (ALL) 204 ( V ) ADDL. CIT VS. PRASANT AHLUWALIA [2005] 92 TTJ 464 ( VI ) PATNI CHEMICALS LTD. VS. ADDL. CIT [2004] 91 TTJ (DEL) 228 ( VII ) H.C. CHANDNA (P) LTD. VS. DCIT [2004] 91 TTJ (DEL) 243 ( VIII ) SATYABHUSHAN VS. DCIT [2004] 84 TTJ (BANG) 165 ( IX ) D.D. MALHANA VS. DCIT [2004] 91 TTJ (DEL) 947 ( X ) N. K. MALHANA VS. DCIT [2004] 91 TTJ (DEL) 938 ( XI ) CIT VS. R.M.L. MEHROTRA [2010] 320 ITR 403 12 8.2 WE HAVE CAREFULLY EXAMINED ALL THESE JUDGMENTS REFERRE D TO BY THE ASSESSEE AND WE FIND THAT IN THESE JUDGMENTS IT HAS BEEN REPEATEDLY HELD THAT IN BLOCK ASSESSMENT NO ADDITION CAN BE MADE IN THE ABSENCE OF INCRIMINATING MATERIAL. IN THIS REGARD THERE IS NO DISPUTE WITH THIS LEGAL PROPOSITION. BUT IN THE IN STANT CASE THE REVENUE HAS COLLECTED ENORMOUS EVIDENCE WHICH SPEAKS THAT THE ASSESSEE WAS ENGAGED IN SALES & PURCHASE OF OLD CARS BESIDES EARNING COMMISSION. THE TRANSACTIONS WITH REGARD TO SALE AND PURCHASE OF CARS WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. THEREFORE THE ASSESSING OFFICER HAD NO OPTION BUT TO ESTIMATE THE PROFIT ON TOTAL SALES & PURCHASE OF TRANSACTIONS UNDERTAKEN BY THE ASSESSEE ON THE BASIS OF SEIZED MATERIAL. THEREFORE WE FIND NO INFIRMITY IN THE ORDERS OF THE LOWER AUTHOR ITIES THROUGH WHICH THE ADDITIONS WERE MADE ON ACCOUNT OF UNDISCLOSED PROFIT AND UNDISCLOSED INVESTMENT. ACCORDINGLY WE CONFIRM THE ORDER OF CIT(A). 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON 1 1 / 0 4 / 2 0 1 4 ) SD/. SD/. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMB ER JUDICIAL MEMBER DATED: 1 1 / 0 4 / 2 0 1 4 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R. I.T.A.T. LUCKNOW ASSTT. REGISTRAR