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TMI Blog2021 (1) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... sed sales turnover based on data retrieved from the impounded materials - HELD THAT:- AO has taken the profit percentage at 12% but he has held that in such a business, the normal profit percentage is 2 - 3% and he held that the ends of justice would be met if profit percentage is computed at 4% as in unaccounted transaction, the profit would be more as government taxes and levies are not paid and on this basis, he sustained the profit to the extent of 4% instead of 12%. In the case of Mr. M.A. Siddique Vs. DCIT [ 2020 (8) TMI 835 - ITAT BANGALORE] the facts are similar as noted by the Tribunal we hold that in the present case also, for Assessment Year 2012-13, profit from arecanut business should be computed by applying profit rate of 2% and this will meet the ends of justice in the facts of the present case. This ground is partly allowed. Addition of cash deposits in bank accounts - HELD THAT:- In the present case this is not the allegation of the AO that any bank account is unaccounted or that any deposit entry of such declared bank account is not accounted for in the books of assessee. Learned DR of the Revenue also could not point out any difference in facts in presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant was in possession of any money, bullion of valuables which represented any undisclosed income whether wholly or partly for the purposes of the income tax Act 1961 to warrant the issuance of the search warrant as the searches never revealed existence of any asset or valuables. Therefore, the search warrant issued to search and seizure in the premises of appellant's father was patently ultra vires the section 132 of the Act, 1961. e) The learned CIT(A)-2, Panaji on the facts and circumstances of the case, has grossly ignored the fact that, there was no material whatsoever with the department to induce a belief that the criteria for issuance of warrant u/s. 132(1) existed. Consequently, the right from the issuance of warrant, till its execution, the search seizure activities were not in accordance with the law and hence no valid assessments u/s. 153A could be made and therefore consequently proceedings initiated u/s. 153 A of the Act are against the law. f) The learned CIT(Appeals)-2. Panaji has failed to comprehend the fact that, the evidences unearthed were loose sheets and digital evidences which has got no evidentiary value and legally inadmissible under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant's father was patently ultra vires the section 132 of the Act, 1961. e) The learned CIT(A)-2, Panaji on the facts and circumstances of the case, has grossly ignored the fact that, there was no material whatsoever with the department to induce a belief that the criteria for issuance of warrant u/s. 132(1) existed. Consequently, the right from the issuance of warrant, till its execution, the search seizure activities were not in accordance with the law and hence no valid assessments u/s. 153A could be made and therefore consequently proceedings initiated u/s. 153A of the Act are against the law. f) The learned CIT(Appeals)-2, Panaji has failed to comprehend the fact that, the evidences unearthed were loose sheets and digital evidences which has got no evidentiary value and legally inadmissible under Section 34 of the Indian Evidence Act as held by the Supreme Court in the case of Common Cause (A Registered Society) Vs. Union of India (394 ITR 220/245 Taxman 214). g) Without prejudice to the above, the learned CIT(Appeals)-2, Panaji has erred in law and also on facts by upholding the estimation of profits at 4% which is not backed by any evidence or compar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial whatsoever with the department to induce a belief that the criteria for issuance of warrant u/s. 132(1) existed. Consequently, the right from the issuance of warrant, till its execution, the search seizure activities were not in accordance with the law and hence no valid assessments u/s. 153A could be made and therefore consequently proceedings initiated u/s. 153 A of the Act are against the law. f) The learned CIT(Appeals)-2, Panaji has failed to comprehend the fact that, the evidences unearthed were loose sheets and digital evidences which has got no evidentiary value and legally inadmissible under Section 34 of the Indian Evidence Act as held by the Supreme Court in the case of Common Cause (A Registered Society) Vs. Union of India (394 ITR 220/245 Taxman 214). g) Without prejudice to the above, the learned CIT(Appeals)-2, Panaji has erred in law and also on facts by upholding the estimation of profits at 4% which is not backed by any evidence or comparable cases, while in the case of supari business profits does not cross 2%. The Appellant craves leave to add, amend or alter any of the forgoing grounds. 4. For these and any other grounds that may be ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies were not in accordance with the law and hence no valid assessments u/s. 153A could be made and therefore consequently proceedings initiated u/s. 153A of the Act are against the law. f) The learned CIT(Appeals)-2, Panaji has failed to comprehend the fact that, the evidences unearthed were loose sheets and digital evidences which has got no evidentiary value and legally inadmissible under Section 34 of the Indian Evidence Act as held by the Supreme Court in the case of Common Cause (A Registered Society) Vs. Union of India (394 ITR 220/245 Taxman 214). g) Without prejudice to the above, the learned CIT(Appeal s)-2, Panaji has erred in law and also on facts by upholding the estimation of profits at 4% which is not backed by any evidence or comparable cases, while in the case of supari business profits does not cross 2%. 3. The Appellant craves leave to add, amend or alter any of the forgoing grounds. 4. For these and any other grounds that may be urged before the Hon'ble ITAT, it is prayed that the Hon'ble ITAT may allow the appeal with cost. ITA No. 59/Bang/2020 1. The learned CIT(A)-2, Panaji erred in Passing the Order in the manner he did. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The learned CIT(Appeals)-2, Panaji has failed to comprehend the fact that, the evidences unearthed were loose sheets and digital evidences which has got no evidentiary value and legally inadmissible under Section 34 of the Indian Evidence Act as held by the Supreme Court in the case of Common Cause (A Registered Society) Vs. Union of India (394 ITR 220/245 Taxman 214). g) Without prejudice to the above, the learned CI T(Appeal s)-2, Panaji has erred in law and also on facts by upholding the estimation of profits at 4% which is not backed by any evidence or comparable cases, while in the case of supari business profits does not cross 2%. 3. CASH DEPOSITS IN BANK ACCOUNT AMOUNTING TO ₹ 48,37,198/- TREATED AS UNDISCLOSED INCOME; a) The learned CIT(A)-2, Panaji on the facts and in the circumstances of the case, and in law, erred in upholding the additions made by the Assessing Officer amounting to ₹ 48,37,198/- by stating that, no compelling evidence has been produced before him by overlooking the various case laws relied on by the Appellant. b) The learned CIT(A)-2, Panaji on the facts and in the circumstances of the case has failed to appreciate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur, SMS in the cell phones of the employees at Nagpur. which is purely based on the assumptions and presumptions. c) The learned CIT(A)-2, Panaji has on facts and in the circumstances of the case has failed to appreciate that, Assessing Officer has grossly ignored the fact that, Assessing Officer has grossly ignored the fact that, appellant has declared total turnover of ₹ 34,84,067/- on which CST amounting to ₹ 33,896/- collected and paid. d) The learned CIT(A)-2, Panaji has overlooked the fact that, there was no material whatsoever at the time of issuance of warrant that the appellant was in possession of any money, bullion of valuables which represented any undisclosed income whether wholly or partly for the purposes of the income tax Act 1961 to warrant the issuance of the search warrant as the searches never revealed existence of any asset or valuables. Therefore, the search warrant issued to search and seizure in the premises of appellant's father was patently ultra vires the section 132 of the Act, 1961. e) The learned CIT(A)-2, Panaji on the facts and circumstances of the case, has grossly ignored the fact that, there was no material whatsoeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Panaji on the facts and in the circumstances of the case has failed to comprehend the fact that, Assessing Officer fails to cross verify the transaction between the appellant's and her spouse and other parties/contra entries e) Without prejudice to the above, the learned CIT(Appeals)-2, Panaji has erred in law and also on facts by upholding the entire cash deposits as undisclosed income, which is not backed by any evidence or comparable cases, while in the case of supari business profits does not cross 2%. 4. The Appellant craves leave to add, amend or alter any of the forgoing grounds. 5. For these and any other grounds that may be urged before the Hon'ble ITAT, it is prayed that the Hon'ble ITAT may allow the appeal with cost. ITA No. 61/Bang/2020 1. The learned CIT(A)-2, Panaji erred in Passing the Order in the manner he did. 2. UNDISCLOSED PROFIT FROM IN PORE BUSINESS OPERATIONS: a) The learned CIT(A)-2, Panaji on the facts and circumstances of the case, and in law, has erred in partly upholding the additions made by the Assessing Officer amounting to ₹ 60,64,077/-, as undisclosed profit from supari business operations from N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India (394 ITR 220/245 Taxman 214). g) Without prejudice to the above, the learned CIT(Appeals)-2, Panaji has erred in law and also on facts by upholding the estimation of profits at 4% which is not backed by any evidence or comparable cases, while in the case of supari business profits does not cross 2%. 3. CASH DEPOSITS IN BANK ACCOUNT AMOUNTING TO ₹ 4,04,000/- TREATED AS UNDISCLOSED INCOME: a) The learned CIT(A)-2, Panaji on the facts and in the circumstances of the case, and in law, erred in upholding the additions made by the Assessing Officer amounting to ₹ 4,04,000/- by stating that, no compelling evidence has been produced before him by overlooking the various case laws relied on by the Appellant. b) The learned CIT(A)-2, Panaji on the facts and in the circumstances of the case has failed to appreciate the fact that, the books of accounts of the appellant were seized at the time of search proceedings and all the sources of cash deposits were available with the assessing authority since those transactions were recorded in the books of accounts. Therefore assessing officer erred in law and on facts by making additions towards the cash dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Vs. DCIT in ITA Nos. 62 to 66/Bang/2020 dated 17.08.2020, (copy submitted), similar facts were noted by the Tribunal in para 5 on page 14 of this Tribunal order and it is held by the Tribunal in that case that after holding this that the case of the assessee squarely falls outside the purview of section 153A, learned CIT(A) should have held that the Assessment Order passed under section 153A is bad in law and he should have allowed the appeal of the assessee instead of holding that the appeal is partly allowed and in the same para, the Tribunal held that the Assessment Order passed by the AO in that case under section 153A is bad in law and therefore, other grounds regarding merit of various additions are academic and no adjudication is called for about those grounds. He pointed out that in the present case also, the facts are similar because in para 5.8 of his order, learned CIT(A) has given a similar finding that the assessee's case squarely falls outside the purview of section 153A of the Act and no new material was found or unearthed during the course of search. He also pointed out that in para 5.7 of his order, learned CIT(A) has noted about the same 3 judgments of Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. M.A. Siddique Vs. DCIT (supra). This para reads as under: 5. We have considered the rival submissions. We find that in these two paras, learned CIT(A) has noted several judicial pronouncements cited by the learned AR of the assessee before him and have given a categorical finding that the case of assessee squarely falls outside the purview of section 153A because the assessment has not abated and no new material was found or unearthed during the course of search and hence, these judgments are squarely applicable. These findings of CIT(A) are in favour of the assessee and the same have attained finality because no appeal is filed by the revenue against these findings of CIT(A). But in spite of this finding in para 6 of his order, the learned CIT(A) has held in para 7 of his order that the appeal of the assessee for A.Y. 2012 - 13 is partly allowed. In our considered opinion, after holding this in para 6 that the case of assessee squarely falls outside the purview of section 153A, learned CIT(A) should have held that the assessment order passed by the AO u/s. 153A is bad, in law and he should have allowed the appeal of the assessee instead of holding that the appeal is partly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd No. 2, the grievance is about of addition of ₹ 98,48,665/- made by the AO to the extent of 12% of the alleged undisclosed sales turnover of ₹ 820,72,201/- based on data retrieved from the impounded materials. PC of the assessee 's business premises at Nagpur. SMS in the cell phones of the employees of at Nagpur wherein contents were mentioned in coded words and numbers. As per para 5.2.9 of his order in this year also, although learned CIT(A) has noted that in the business of Arecanut, the books of accounts disclose profit @ 2 - 3% but while computing income of unaccounted turnover, taxes and levies etc. are evaded and therefore, the profit will be higher and he directed the AO to assess income @ 4% of undisclosed turnover as against 12% rate adopted by the AO. In the written submissions dated 11.06.2020 filed by the learned AR of the assessee for A.Y. 2016 - 17 also, similar submission is that the coded words and figures found noted in impounded materials were disclosed in audited books of accounts and therefore, no addition is justified in this regard but no evidence was filed before us in support of this contention and therefore, this argument is rejected. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned AR of the assessee regarding ground No. 2 (g) only which is similar to ground No. 2 (g) raised by the assessee in Assessment Year 2012-13. Hence, in this year also, we hold and infer that ground Nos. 2a to 2f are not pressed by learned AR of the assessee and accordingly, these grounds are rejected as not pressed and regarding ground No. 2 (g) we decide the issue on similar line as decided by us in Assessment Year 2012-13 as per above para and AO is directed to compute the income from unaccounted arecanut business @ 2% of unaccounted sales and accordingly ground No. 2 (g) is partly allowed in this year also. 13. In the result, the appeals of the assessee for Assessment Years 2013-14 is partly allowed. 14. Now we take up the appeal of the assessee for Assessment Year 2014-15 in ITA No. 59/Bang/2020. Regarding this year, it was submitted by learned AR of the assessee that in para 6 of his order, learned CIT(A) has given the same finding as were given by him in Assessment Year 2010-11 and 2011 - 12 that the AO can make assessment under section 153A only in the case which is pending for regular assessment under section 143 and as per the letter dated 14.10.2019 submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it can be seen that the facts in this case are similar to the facts in the case of Mr. M.A. Siddique Vs. DCIT (supra). Learned DR of the revenue supported the order of CIT(A). 18. We have considered the rival submissions. First of all, we reproduce paras 15 to 17 of the Tribunal order rendered in the case of Mr. M.A. Siddique Vs. DCIT (supra). These paras are as under: 15. As per Ground No. 4, the grievance is about of addition of ₹ 65,68,862/- made by the AO by alleging that Cash deposit in bank account is higher than declared turnover. In Para 5.6.5 of his order, learned CIT(A) has noted that the entire cash deposit of the year may not the turnover of the particular year and he observed that it may contain cash receipts from the credit sales of the earlier years, contra entries, loans and advances etc. After making these observations, he jumped to this conclusion that the assessee has failed to lead any evidence in this regard before him or before the AO and therefore, He has no option but to confirm this addition. 16. In the written submissions dated 11.06.2020 filed by the learned AR of the assessee, this is the submission that books of accounts of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no specific finding of the AO that a particular bank account is not appearing in the books of the assessee or that some specific entries of the declared bank accounts is not appearing in the books of the assessee, this cannot be said that there is any unexplained deposit in bank merely for this reason alone that it exceeds the declared turnover. In this regard, these observations of CIT(A) clinches the issue in favour of the assessee that entire cash deposit of the year may not be the turnover of the particular year and he also observed very correctly that it may contain. cash receipts from the credit sales of the earlier years, contra entries, loans and advances etc. Under these facts, we hold that there is no valid basis of this allegation of the AO that there is unaccounted cash income simply on this basis that deposits in bank accounts exceed the declared turnover. We delete this addition. This Ground No. 4 is allowed. 19. As per these paras reproduced from the Tribunal order, it is seen that in that case also, this was the objection of the AO that cash deposit in bank account is higher than declared turnover. In the present case also, it is noted by the AO on page 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -16 is allowed. 20. In the result, assessee's appeal in Assessment Year 2015-16 is partly allowed. 21. Now we take up the appeal of the assessee for Assessment Year 2016-17 in ITA No. 61/Bang/2020. In this year also, the assessee has raised ground Nos. 2a and 2f but regarding these grounds, no argument was raised by learned AR of the assessee and therefore, it is inferred that these grounds are not pressed and dismissed accordingly. As per ground No. 2 (g), the issue in dispute in this year also is same that the income from arecanut business should be computed at 2% as against 12% by AO and 4% by learned CIT(A). In line with our decision in Assessment Years 2015-16 as per above para, in this year also, we direct the AO to compute income from arecanut business @ 2% of turnover instead of 12% by AO and 4% by CIT(A). Ground No. 2 (g) is partly allowed. 22. In this year, the assessee has raised one more ground No. 3 regarding addition of ₹ 4,04,000/- in respect of alleged cash deposit in bank accounts. In course of hearing, learned AR of the assessee submitted that this ground is not pressed and accordingly, ground No. 3 for Assessment Year 2016-17 is also rejected a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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