RAJEEV C BATRA, MUMBAI v. ACIT CEN CIR 18 & 19, MUMBAI

ITA 7772/MUM/2010 | 2003-2004
Pronouncement Date: 23-03-2011 | Result: Allowed

Appeal Details

RSA Number 777219914 RSA 2010
Assessee PAN AAIPB2350A
Bench Mumbai
Appeal Number ITA 7772/MUM/2010
Duration Of Justice 4 month(s) 11 day(s)
Appellant RAJEEV C BATRA, MUMBAI
Respondent ACIT CEN CIR 18 & 19, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 23-03-2011
Assessment Year 2003-2004
Appeal Filed On 11-11-2010
Judgment Text
1 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI SMC SMC SMC SMC BENCH BENCH BENCH BENCH MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI MUMBAI BENCHES MUMBAI BEFORE SHRI R K PANDA AM BEFORE SHRI R K PANDA AM BEFORE SHRI R K PANDA AM BEFORE SHRI R K PANDA AM ITA NO. ITA NO. ITA NO. ITA NO. 7772/MUM/2010 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2003 2003 2003 2003- -- -04 0404 04) )) ) SHRI RAJEEV C BATRA 302 PINNACLE TOWER 3 RD FLOOR 9 TH FLOOR TPS III KHAR (W) MUMBAI 52 VS THE ASST COMMR OF INCOME TAX CEN.CIR 18 & 19 MUMBAI ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO. AAIPB2350A A SSESSEE BY SHRI A KGHOSH R EVENUE BY SHRI R K GUPTA/DR PE PEPE PER R K PANDA AM R R K PANDA AM R R K PANDA AM R R K PANDA AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED13.8.2010 OF THE CIT(A)-39 MUMBAI RELATING TO ASSESSMENT YEAR 2003-04. 2 GROUNDS OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN CONFIRMING THE AOS ACTION IN ESTIMATING T HE CASH COMPONENT OF BROKERAGE INCOME AT RS. 1 00 000/- 2.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SEE SON OF SHRI CHATURBHUJ T BATRA IS A MEMBER OF BATRA GROUP WHO ARE ENGAGED IN CIVIL CONSTRUCTION AND REAL ESTATE BROKERS. IT CONSISTS OF TEN MEMBERS AS PER PAGE 2 OF THE ASSESSMENT ORDER. THE ABOVE GROUP WAS COVERED U/S 132 OF THE I T ACT 1961 ON 18.1.2007. DURING THE COURSE OF SEARCH THE BUSINESS PREMISES OF M/S SUN RISE ENTERPRISES 2 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) WAS COVERED U/S 133A OF THE I T ACT. THE OTHER RESI DENTIAL PREMISES INCLUDING LOCKERS WERE ALSO COVERED U/S 132 OF THE ACT. 2.2 THE ASSESSING OFFICER NOTED THAT THE GROUP IS B ASICALLY REAL ESTATE BROKERS BRANCHED OUT INTO CIVIL CONSTRUCTION AND THEIR FIRS T RESIDENTIAL BUILDING PROJECT IN THE NAME OF SUDHA IN THE KHAR (W) WAS NEARING COM PLETION WHEN ACTION U/S 132 WAS CONDUCTED. THE PROJECT CONSISTS OF 3 APART MENTS AND ONE UNIT WAS CLAIMED TO HAVE BEEN SOLD BY TAKING ADVANCE AT THE TIME OF ACTION U/S 132. ALL THE GROUP MEMBERS ARE ASSESSED TO INCOME TAX AND HA VE ADMITTED REAL ESTATE BROKERAGE INCOME IN THEIR RESPECTIVE REGULAR RETUR NS AND WERE ASSESSED WITH CIT-19 MUMBAI. 2.3 THE ASSESSING OFFICER NOTED THAT DURING THE COU RSE OF SEARCH THE BATRA BROTHERS ADMITTED RS.70 LACS AS THEIR UNDISCLOSED I NCOME IN REAL ESTATE BROKERAGE AND ANOTHER RS. 5 LACS TOWARDS THE PROFIT ON THE SALE OF ONE RESIDENTIAL APARTMENT IN THEIR BUILDING PROJECT SUDHA. HOWEV ER THE UNDISCLOSED INCOME WAS NOT REFLECTED IN ANY OF THE RETURNS FILED BY SH RI CHATURBHUJ T BATRA AND SHRI PREMKUMAR T BATRA. 2.4 ON VERIFICATION OF SOME OF THE ENTRIES IN THE SEIZED MATERIALS AT PAGE NO.8 OF ANNEXURE A-1 AND PAGE 81 OF ANNEXURE A-3 THE AS SESSING OFFICER NOTED THAT THERE IS UNACCOUNTED CASH COMPONENT IN THE SALE PR ICE OF THE PROPERTIES IN WHICH THE ASSESSEE ACTED AS A REAL ESTATE BROKER AND RECE IVED BROKERAGE IN RESPECT OF CASH COMPONENT OF THE SALE PRICE. ACCORDING TO THE ASSESSING OFFICER THE BROKERAGE RECEIVED ON THE CASH COMPONENT OF THE SAL E CONSIDERATION WAS NOT 3 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE ASSESSI NG OFFICER THEREFORE ISSUED SHOW CAUSE NOTICE ASKING THE ASSESSEE TO EXPLAIN AS TO WHY THE ADDITION SHOULD NOT BE MADE ON ACCOUNT OF ENTRIES SHOWN IN THE SEIZ ED MATERIAL MENTIONED ABOVE. HE ALSO BROUGHT TO THE NOTICE OF THE ASSESS EE THE STATEMENT GIVEN BY SHRI CHATURBHUJ T BATRA RECORDED DURING THE COURSE OF SEARCH IN RESPECT OF THE FLAT AT RAGILAND SOMMERSET AND BAND STAND SEA FACI NG. THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS CIT REPORTED IN 214 ITR 801 (SC) AND IN THE CASE OF CIT VS DURGA PRASAD MOR E REPORTED IN 82 ITR 540 WERE ALSO BROUGHT TO THE NOTICE OF THE ASSESSEE AC CORDING TO WHICH CONSIDERATION OF THE SURROUNDING CIRCUMSTANCES AND APPLICATION OF THE TEST OF HUMAN PROBABILITIES IS A MUST TO ARRIVE AT A PROPER CONCLUSION. ACCORDING TO THE ASSESSING OFFICER THE REAL ESTATE TRANSACTION DONE BY THE BATRA FAMILY CONTAIN A CASH COMPONENT WHICH HAS GONE UNRECORDED IN THE BOO KS WHICH VARIES FROM 30% TO 70%. HE WAS OF THE OPINION THAT THE BATRA FAMILY MUST HAVE RECEIVED THE 1% BROKERAGE ON THE UNRECORDED PART OF THE SALE CONSID ERATION. HE THEREFORE PROPOSED TO MAKE REASONABLE ESTIMATE FOR SUCH BROKE RAGE IN WHICH THE BATRA FAMILY INDULGED HAVING 50% CASH COMPONENT. 2.5 THE ASSESSEE REPLIED TO SUCH NOTICE ISSUED BY T HE ASSESSING OFFICER AND STATED THAT FINDINGS GIVEN BY THE ASSESSING OFFICER ARE INCORRECT AND NOT SUPPORTED BY ANY MATERIAL ON RECORD BASED ON CONJE CTURE AND RESULT OF FAILURE TO CORRECTLY APPRECIATE THE THINGS IN THEIR PROPER PER SPECTIVE. IT WAS SUBMITTED THAT THE ASSESSING OFFICER FAILED TO MAKE ANY VALID ENQU IRY FROM THE PURCHASERS OF THE PROPERTY AND TO PROVE THAT THE RAGILAND PROPER TY WAS SOLD FOR RS. 2.55 4 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) CRORES AND SOMMERSET PROPERTY AT 1.55 CRORES WITH 8 0 LACS UNRECORDED CASH COMPONENT. 2.6 REFERRING TO THE DECISION IN THE CASE OF RAMJI DAYAWALA AND SONS (I) LTD VS INVERT IMPORT REPORTED IN AIR 1981 SC 2085 IT WAS SUBMITTED THAT MERE PROOF OF HANDWRITING OF A DOCUMENT WOULD NOT TANTAMOUNT TO A PROOF OF THE CONTENTS OR THE FACT STATED IN THE DOCUMENTS. THE TRUTH OR OTHE RWISE OF THE FACTS OR CONTENT SO STATED WOULD HAVE TO BE PROVED BY ADMISSIBLE EVI DENCE. VARIOUS OTHER DECISIONS WERE ALSO BROUGHT TO THE NOTICE OF THE AS SESSING OFFICER. 2.7 HOWEVER THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT NO RETURN OF INCOME RELATING TO ASSESSMENT YEAR 2002-03 HAS BEEN FILED. THEREFORE HE ESTIMATED THE BROKERAGE INCOME AT RS. 1 LACS ON REASONABLE BASIS. WHILE DO ING SO HE OBSERVED THAT THE ASSESSEE IS RECEIVING 50% OF THE BROKERAGE INCOME I N CASH WHICH IS UNACCOUNTED IN THE BOOKS WHICH IS CLEARLY PROVED BY THE FACT T HAT IN RESPECT OF THE TRANSACTIONS IN FOUR OF THE CHINAR PROPERTIES WIT H M/S VINITA ESTATE P LTD SHRI C T BATRA HAS RECEIVED ABOUT 51% OF THE BROKERAGE IN CASH. THE ENTRIES RELATING TO THE ABOVE TRANSACTIONS ARE FOUND IN THE SEIZED PAPE R PAGE 4 IN ANNEXURE A SEIZED FROM THE RESIDENCE OF SHRI C T BATRA DURING THE COURSE OF SEARCH. HE REFERRED TO THE ASSESSMENT ORDER OF SHRI C T BATRA IN WHICH THE TOTAL COMMISSION PAYABLE TO SHRI C T BATRA IN RESPECT O F CHINAR PROPERTIES IS RS. 24 01 940/- AND OUT OF THE ABOVE AN AMOUNT OF RS. 12 50 000/- IS PAID IN C WHICH ACCORDING TO THE ASSESSING OFFICER IS CASH . THE REMAINING AMOUNT IS 5 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) PAID IN CHEQUE AND ENTRIES TO THIS EFFECT ARE FOUND IN THE IMPUGNED SEIZED PAPER PAGE NO.4 OF ANNEXURE A. THEREFORE THERE IS REASO N TO CONCLUDE THAT THE FAMILY MEMBERS OF SHRI C T BATRA AND HIS BROTHER SHRI PREM KUMAR BATRA AND HIS FAMILY MEMBERS ALSO INDULGED IN THE PRACTICE OF RECEIVING APPROXIMATELY 50% OF THE BROKERAGE IN CASH. 3 BEFORE THE CIT(A) THE ASSESSEE MADE DETAILED ARG UMENTS AND ALSO FILED CERTAIN ADDITIONAL EVIDENCES WHICH WERE FORWARDED BY THE CIT(A) TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE CIT(A) CAL LED FOR A REMAND REPORT FROM THE ASSESSING OFFICER . AFTER RECEIVING THE COMMENT S OF THE ASSESSING OFFICER HE CONFRONTED THE SAME TO THE ASSESSEE WHO ALSO FILED COUNTER REPLY. 3.1 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE COPY OF THE REMAND REPORT OF THE ASSESSING OFFICER AND THE REJOINDER O F THE ASSESSEE TO SUCH REMAND REPORT THE CIT(A) UPHELD THE ADDITION OF 1 LACS ON ESTIMATE MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER( PARA 11 TO 1 1.4 OF HIS ORDER) 11. I HAVE GONE THROUGH THE ISSUE. IN THIS GROUP SE ARCH TOOK PLACE ON 18.1.2007 I.E. IN THE ACCOUNTING PERIOD RELEVANT TO AY 2007-08. IT IS SEEN THAT THE AO HAS ESTIMATED THE ALLEGED BROKERAG E RECEIVED IN CASH WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNTS FOR AYS 2001-02 TO 2006-07 AT 100% OF THE BROKERAGE ADMITTED IN THE RE TURN OF INCOME (I.E. THE AO HAS HELD THAT 50% BROKERAGE IS RECEIVE D IN CHEQUE AND 50% IN CASH) IN THE RESPECTIVE YEARS AND ADDED THA T AMOUNT IN EACH ASST YEAR. SUCH ADDITIONS HAVE BEEN MADE IN ALL THE ASST YEARS FROM AYS 2001-02 TO 2006-07 IN ALL THE MEMBERS OF THIS F AMILY. 6 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) 11.1 IT IS SEEN THAT THE AO HAS TAKEN THIS VIEW ON THE BASIS OF SEIZED DOCUMENTS WITH REGARD TO TWO PROPERTIES: I) REGILAND FLAT IN 5 TH FLOOR II) FLAT AT SOMMERSET BUILDING. AT THE OUTSET IT IS TO BE MENTIONED THAT THERE IS NO CLEAR CUT EVIDENCE AVAILABLE TO SHOW THAT ANY CASH COMPONENT IS INVOLV ED IN THIS TRANSACTION. THE AO HAS INTERPRETED THE WORDS 70/3 0 AS 70% IN CHEQUE AND 30% IN CASH. HOWEVER THE APPELLANT EXPL AINED THAT 70/30 MEANS 70% IS CARPET AREA AND 30% IS SUPER BUILT UP AREA. THE AO INTERPRETED 800( C) AS RS. 80 00 000/- AS CASH COM PONENT. HOWEVER THE APPELLANT EXPLAINED THAT 800 ( C) IS PRECEDED BY THE WORDS AREA AND HENCE 800 MEANS CARPET AREA IS 800 SQ.F T. APART FROM THAT NO ENQUIRY HAS BEEN MADE WITH THE PURCHASER OR SELLER OF THE FLATS TO FIND OUT IF ANY CASH COMPONENT IS INVOLVED IN TH E TRANSACTION. NO FURTHER ACTION HAS BEEN TAKEN IN THE HANDS OF BUYER AND SELLER. 11.2 WITH REGARD TO THE FIRST FLAT AT RAGILAND T HE APPELLANT CONTENDS THAT THIS TRADE ENQUIRY IS RELATED TO THE SALE OF THE FLAT BY MRS SAEEDA MEMON AND OTHERS IN THE ACCOUNTING YEAR RELE VANT TO ASST YEAR 2008-09 AND THE TRADE ENQUIRY IS RECORDED IN T HE SEIZED PAPERS DURING THE FINANCIAL YEAR 2006-07. IN THIS REGARD T HE APPELLANT HAS FILED EVIDENCES. IN THE SEIZED PAPERS IN CERTAIN PAGE DA TE IS MENTIONED I.E. ON PAGE NO.6 OF ANNEXURE A1 IS DATED 27.6.206. IN V IEW OF THIS THE APPELLANT CONTENDS THAT THE ENTIRE MADE IN PAGE 8 SHOULD BE ALSO IN THAT PERIOD AND HENCE CONTENDS THAT THE SEIZED MATE RIAL IS NOT AT ALL CONNECTED WITH FINANCIAL YEAR 2004-05. CONSIDERING ALL THESE FACTS SUBMISSIONS AND EVIDENCES FILED IT APPEARS THAT TH E ENTRY IS A TRADE ENQUIRY MADE IN THE FY 2006-07. IT IS SUFFICE TO SA Y THAT THERE IS NO CONCLUSIVE EVIDENCE TO HOLD THAT THIS SEIZED PAPER BELONGS TO ASST YEAR 2005-06 AND THERE IS NO CONCLUSIVE EVIDENCE TO PROV E THAT ANY CASH COMPONENT IS INVOLVED IN THE SALE. 11.3 AS FAR AS THE SECOND FLAT IS CONCERNED (I.E. I N SOMMERSET BUILDING) THERE IS NO EVIDENCE TO SHOW THAT THE TR ANSACTION TOOK PLACE 7 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) THROUGH THE APPELLANT. THE APPELLANT SUBMITS THAT I T IS ONLY TRADE ENQUIRY AND THE TRANSACTION HAS NOT GONE THROUGH. T HERE IS NO EVIDENCE AVAILABLE CONTRARY TO THE APPELLANTS SUBM ISSION. FURTHER THE ENTRY 800(C) IS APPEARING IN PAGE 80 OF THE SEIZED MATERIAL AND IT READS AS FOLLOWS: 1.35 CR SOMMERSET AREA - 800 (C) 1.32/1.35 7 TH FROM THIS ENTRY IT APPEARS THAT 800 REPRESENTS ONLY CARPET AREA. 11.4 FROM THE ABOVE DISCUSSION SUBMISSIONS EVIDEN CES FILED I AM CONVINCED THAT THESE SEIZED DOCUMENTS DOESNT INDIC ATE ANY CASH COMPONENT OF BROKERAGE RECEIVED BY THE APPELLANT HE HOWEVER DID NOT DELETE THE ADDITION OF RS. 1 L ACS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BROKERAGE INCOME RECEIVED IN CASH AND CONFIRMED THE SAME ON THE GROUND THAT THE ASSESSEE WAS HAVING UNACCOUN TED CASH DEPOSIT IN BANK ACCOUNT WHICH PROVES THAT THE ASSESSEE WAS NOT ACCO UNTING THE BROKERAGE INCOME CORRECTLY. HE NOTED THAT ALREADY AN AMOUNT O F RS. 98 765/- HAS BEEN SUSTAINED FOR UNACCOUNTED BANK DEPOSIT. SINCE HE HA D ALREADY SUSTAINED ANOTHER ADDITION OF RS. 23 140/- HE DIRECTED THE ASSESSING OFFICER TO TELESCOPE THE ADDITION. 4 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL 5 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E CONCLUSION MADE BY THE ASSESSING OFFICER THAT 50% OF THE BROKERAGE INCOME RECEIVED BY THE ASSESSEE IN CASH IS INCORRECT. HE SUBMITTED THAT PAGE 83 OF THE SEIZED DOCUMENT REFERS TO 8 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) FLAT AT SOMMERSET BUILDING AND PAGE 84 OF THE SEIZE D DOCUMENTS RELATES TO REGILAND FLAT. REFERRING TO THE ORDER OF THE CIT(A) HE SUBMITTED THAT THE CIT(A) HAS GIVEN A FINDING THAT THERE IS NO EVIDENCE TO SH OW THAT THE TRANSACTION IN RESPECT OF RAGILAND FLAT TOOK PLACE. IT IS ONLY A TRADE ENQUIRY AND THE TRANSACTION HAD NOT GONE THROUGH. REFERRING TO PAGE NO.9 TO 12 OF THE PAPER BOOK HE SUBMITTED THAT THE RAGILAND BUILDING WAS AGREED T O BE SOLD DURING THE FINANCIAL YEAR 2004-05 I.E. RELEVANT TO ASSESSMENT YEAR 2005- 06. THEREFORE NO BROKERAGE INCOME COULD HAVE BEEN RECEIVED DURING THE YEAR. TH E FLAT WAS ULTIMATELY SOLD DURING THE FINANCIAL YEAR 2007-07 RELEVANT TO ASSES SMENT YEAR 2008-09. NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT PROPERTY HA S BEEN SOLD DURING THE YEAR. SIMILARLY AS REGARDS THE FLAT AT SOMMERSET THE SA ME HAS NOT BEEN SOLD AND THERE IS NO MATERIAL FOUND RELATING TO THE CURRENT YEAR. FURTHER THE ASSESSEE HAS NOT CHALLENGED THE ADDITION OF RS. 98 765/- CONFIRM ED BY THE CIT(A) ON ACCOUNT OF UNEXPLAINED BANK DEPOSIT. THE ONLY INCOME OF THE AS SESSEE IS FROM BROKERAGE. ACCORDINGLY IT WAS SUBMITTED THAT THERE CANNOT BE ANY ESTIMATED ADDITION ON ACCOUNT OF BROKERAGE. 5.1 THE LD DR ON THE OTHER HAND RELIED ON THE ORDER S OF THE ASSESSING OFFICER AND THE CIT(A). 6 I HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY B OTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I FIND THE ASSESSING OFF ICER RELIED ON THE ORDER IN THE CASE OF SHRI C B BATRA AND HELD THAT THE ASSESSEE I S RECEIVING 50% OF THE 9 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) BROKERAGE IN CASH WHICH IS UNACCOUNTED IN THE BOOKS . I FIND THE ASSESSING OFFICER HAS TAKEN THIS VIEW ON THE BASIS OF SEIZED DOCUMENTS WITH REGARD TO TWO PROPERTIES NAMELY REGILAND FLAT IN 5 TH FLOOR AND FLAT AT SOMMERSET BUILDING. NO INDEPENDENT ENQUIRY FROM THE PURCHASERS HAS BEEN MA DE. I FIND THE CIT(A) HAD MENTIONED IN PARA 11.1 OF HIS ORDER THAT AT THE OUTSET IT IS TO BE MENTIONED THAT THERE IS NO CLEAR CUT EVIDENCE AVAILABLE TO SHOW TH AT ANY CASH COMPONENT IS INVOLVED IN THIS TRANSACTION. FURTHER THE SUBMISSIONS OF THE ASSESSEE BEFORE TH E CIT(A) THAT THE SEIZED DOCUMENT RELATING TO THE R ESIDENTIAL FLAT WAS A TRADE ENQUIRY WHICH WAS SOLD TWO YEARS AFTER AND DOES NOT RELATE TO ASSESSMENT YEAR 2003-04 COULD NOT BE CONTROVERTED BY THE LD DR. FU RTHER THE SUBMISSION OF THE ASSESSEE BEFORE THE CIT(A) THAT FLAT AT SOMMERSET BUILDING HAS NOT BEEN SOLD AND THE FINDINGS OF THE CIT(A) THAT THERE IS NO EVI DENCE TO SHOW THAT THE TRANSACTION TOOK PLACE THROUGH THE ASSESSEE ALSO C OULD NOT BE CONTROVERTED BY THE LD DR. I FIND IN PARA 11.4 OF THE CIT(A)S O RDER THE LD CIT(A) HAS MENTIONED THAT HE WAS CONVINCED THAT THESE SEIZED DOCUMENTS DO NOT INDICATE ANY CASH COMPONENT OF BROKERAGE RECEIVED BY THE ASSESSEE. I FIND DESPITE GIVING THIS FINDINGS WHICH ARE REPRODUCED ELSEWHERE IN THIS OR DER THE CIT(A) SUSTAINED THE ADDITION ON THE GROUND THAT THE APPELLANT WAS NOT A CCOUNTING THE BROKERAGE INCOME CORRECTLY. THIS IN MY OPINION IS UNCALLED FOR. IT HAS BEEN HELD BY VARIOUS JUDICIAL PRONOUNCEMENTS THAT PRESUMPTIONS AND SURMI SES HOWEVER STRONG MAY BE CANNOT BE THE BASIS FOR ANY ADDITION. (DHAKESW ARI COTTON MILLS LTD VS CIT 26 ITR 775 ) IN THE INSTANT CASE THERE IS NO EVIDENC E ON RECORD TO SHOW THAT THE ASSESSEE HAS RECEIVED BROKERAGE INCOME ON ACCOUNT O F CASH COMPONENTS. THE CIT(A) HAS ALREADY SUSTAINED THE UNEXPLAINED DEPOSI T OF RS. 98 765/- AND THE ASSESSEE IS NOT IN APPEAL FOR THE SAME BEFORE THE T RIBUNAL. IT HAS ALSO BEEN HELD BY THE CIT(A) THAT THE ONLY INCOME OF THE ASSESSEE IS FROM BROKERAGE. THEREFORE 10 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) WHEN THE UNEXPLAINED DEPOSIT OF RS. 98 765/- HAS BE EN ADDED AND THE ONLY SOURCE OF INCOME OF THE ASSESSEE BEING BROKERAGE A ND SINCE THE ASSESSEE HAS NOT CHALLENGED THE SAME THEREFORE CONFIRMING THE ADDITION OF RS. 1 LACS MADE BY THE ASSESSING OFFICER ON ESTIMATE BASIS AND TELE SCOPING THE SAME IN MY OPINION IS NOT JUSTIFIED. I THEREFORE SET ASIDE T HE ORDER OF THE CIT(A) ON THIS ISSUE. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY AL LOWED. 7 GROUNDS OF APPEAL NO 2 READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 23 140/- MADE BY THE AO ON ACCOUNT OF PAGE 78 OF IMPOUNDED MATERIAL DESPITE THE FACT THE INCOME IS OFFERED TO TAX IN THE AY 2004-05. 8 FACTS OF THE CASE IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED FROM PAGE NO.78 OF THE IMPOUNDED MATERIAL IN THE LOOSE PAPER FILE CONTAINING PAGES 1 TO 116 IMPOUNDED FROM THE PREMISES OF M/S SUNRISE ENTERPRISES AT NO.321 TRILO K KHAR WEST THAT THE ABOVE PAGE IS A PROFORMA BILL DATED 23.2.2003. THE SAME IS IN THE NAME OF SHRI PRITAM DAYAL CHOWDUARY HUF FOR THE SERVICES RENDERED FOR ARRANGING A LEAVE AND LICENCE ARRANGEMENT IN RESPECT OF THE PREMISES NO.4 B AT DIAMOND HOUSE CHS PLOT NO.515 TPS-III 35 TH ROAD BANDRA WEST MUMBAI FOR AN AMOUNT OF RS 23 140/- INCLUDING SERVICE TAX OF RS. 1 640/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE ABOVE PROFORMA BILL. IT WA S SUBMITTED BY THE ASSESSEE THAT THE AMOUNT OF RS. 23 140/- HAS BEEN RECEIVED B Y HIM BY CHEQUE DATED 22.2.2003 AND IT HAS BEEN ACCOUNTED FOR. ON VERIFI CATION OF THE ASSESSEES BANK ACCOUNT WITH M/S SARASWAT CO-OP BANK KHAR AND IDBI BANK KHAR THIS AMOUNT OF 11 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) RS. 23 140/- WAS NOT FOUND TO BE CREDITED IN ANY OF THESE BANK ACCOUNTS. THE ASSESSING OFFICER THEREFORE HELD THAT THE ASSESSE E HAS RECEIVED THE AMOUNT IN CASH WHICH HE HAS NOT DISCLOSED. HE ACCORDINGLY MA DE THE ADDITION OF RS. 23 140/- 8.1 IN APPEAL THE CIT(A) CONFIRMED THE ADDITION MA DE BY THE ASSESSING OFFICER ON THE GROUND THAT THE RECEIPT ACCOUNTED IN THE NEX T YEAR NEED NOT BE THE INCOME EARNED OF RS. 23 140/- IN THIS YEAR. AGGRIEV ED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 9 THE LD COUNSEL FOR THE ASSESSEE REFERRING TO THE COPY OF THE BANK ACCOUNT MAINTAINED WITH M/S SARASWAT COOP BANK LTD COPY O F WHICH IS PLACED AT PAGE 2 & 3 OF THE PAPER BOOK SUBMITTED THAT THE AMOUNT OF RS. 23 140/- HAS BEEN CREDITED IN THE BANK ACCOUNT ON 23.2.2004 WHICH REL ATES TO ASSESSMENT YEAR 2004-05. REFERRING TO PAGE 4 OF THE PAPER BOOK HE SUBMITTED THAT THE AMOUNT OF RS. 23 140/- HAS BEEN CREDITED TO THE BROKERAGE ACC OUNT. REFERRING TO PAGE 6 OF THE PAPER BOOK HE SUBMITTED THAT THE ABOVE AMOUNT OF RS. 23 140/- IS RECEIVED AS PER RECEIPT VOUCHER NO.65 DATED 23.2.2004 ON ACC OUNT OF BROKERAGE FROM SHRI PRITAM DAYAL CHOUDHARY HUF. HE SUBMITTED THAT THE AMOUNT HAS BEEN RECEIVED IN THE SUBSEQUENT YEAR AND HAS BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND THE AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT IN THE SUBSEQUENT YEAR. THEREFORE NO ADDITION IS CALLED FOR DURING THIS YE AR. 12 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) 9.1 THE LD DR ON THE OTHER HAND RELIED ON THE ORDER S OF THE ASSESSING OFFICER AND THE CIT(A). 10 I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE PARTIES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I FIND FORCE IN THE SUBMIS SION OF THE LD COUNSEL FOR THE ASSESSEE THAT THE ABOVE AMOUNT OF RS. 23 140/- RECE IVED FROM SHRI PRITAM DAYAL CHOUDHARY HUF WAS DEPOSITED IN THE BANK ACCOUNT ON 23.2.2004 AND DECLARED AS INCOME FOR THE FINANCIAL YEAR 2003-04. THEREFOR E I AM OF THE OPINION THAT THE ADDITION OF RS. 23 140/- FOR THIS YEAR IS UNCALLED FOR SINCE THE ASSESSEE HAS RECEIVED THE AMOUNT DURING THE FINANCIAL YEAR 2003- 04 AND ACCOUNTED FOR IN THE FY 2003-04 RELEVANT TO ASSESSMENT YEAR 2004-05. TH EREFORE THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 11 IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 23 RD DAY OF MAR 2011. SD/- ( R K PANDA ) ( R K PANDA ) ( R K PANDA ) ( R K PANDA ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED:23 MAR 2011 RAJ* 13 . ITA NO. 7772/MUM/2010 (ASST YEAR 2003-04) COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI