TaxTMI 
TaxTMI 
2021 (5) TMI 265
X X X X Extracts X X X X
X X X X Extracts X X X X
....IT-514/2014-15, CIT(A)-50/IT-515/2014-15 dated 31/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/03/2014 by the ld. Dy. Commissioner of Income Tax, Central Circle 47, Mumbai (hereinafter referred to as ld. AO). ITA No.4704/Mum/2016 to 4709/Mum/2016(AY: 2006-07 to 2011-12 ), ITA No.4879/Mum/2016 (A.Y.2006-07), ITA No.4881/Mum/2016(AY: 2007-08), ITA No.4883/Mum/2016 (A.Y: 2009-10) & ITA No.4884/Mum/2016 (A.Y: 2010-11) These appeals in ITA Nos. 4704/Mum/2016 to 4709/Mum/2016, 4879/Mum/2016, 4881/Mum/2016, 4883/Mm/2016 & 4884/Mum/2016 for A.Yrs. 2006-07, 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12 respectively arises out of the order by the ld. Commissioner of Income Tax (Appeals)-50, Mumbai in appeal Nos. CIT(A)-50/IT-505/2014-15, CIT(A)-50/IT-506/2014-15, CIT(A)-50/IT-507/2014-15, CIT(A)-50/IT-508/2014-15, CIT(A)-50/IT-509/2014-15, & CIT(A)-50/IT-510/2014-15 dated 31/03/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/03/2014 by the ld. Dy. Commissioner of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld AO observed that Shri Haresh Mohanlal Mehta earned unaccounted income from Rohan Group and same were partly applied for meeting business expenses as above and remaining applied for making investment in LIC in his name and in the name of his wife (Smt Hema Haresh Mehta), investment in jewellery, investment in Hotel Haredia, foreign travelling expenses and household expenses. The ld AO also observed in the assessment order that Shri Haresh Mohanlal Mehta had earned unaccounted income from Rohan group and made expenses from such unaccounted income. The ld AO also stated that Shri Haresh Mohanlal Mehta had furnished a statement u/s 132(4) of the Act in this regard, wherein it was admitted that unaccounted income was earned by him and out of which, he had incurred some unaccounted business expenses and also personal expenses in the form of investment in jewellery, investment in LIC policies in his name and in the name of his wife, investment in Hotel Haredia, foreign travel expenses, other household expenses etc. The ld AO further observed in the assessment order that the assessee submitted the details regarding the seized materials before him on 14.3.2014 and further furnished the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings. While referring to the tally accounts prepared on the basis of seized material, receipts and payments recorded under the head "Haresh Mehta' made on account of business purpose were used for arriving at a peak credit. After arriving at the peak credit for each year, the ld CITA reduced the revenue expenses incurred for the purpose of business for such years and remaining amount was confirmed. With respect to all the other entries including personal expenses, the ld CITA allowed telescoping of the entries reflected in the tally account. For entries which were not reflected in tally account, the ld CITA confirmed such additions. 3.5. Similarly, in respect of appeal in the case of Smt. Hema Haresh Mehta, the ld CITA allowed the telescoping of the amounts which have been considered in tally account of which peak addition has already been made in the case of Shri Haresh Mohanlal Mehta. 3.6. In respect of peak credit additions and other miscellaneous additions, the assessee has preferred appeals before us and revenue has filed appeals against the relief provided by the ld CITA for various years. 3.7. In this regard, it would be relevant to consider the nature o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 6,30,72,740 5,13,76,977 5,50,000 14,44,54,717 3.8. We find that the total on money receipts reflected in the seized materials for the Asst Years 2006-07 to 2011-12 is only Rs. 14,44,54,717 as tabulated supra, whereas the addition made by the ld AO in the hands of Shri Haresh Mohanlal Mehta itself works out to Rs. 16,56,97,919/- on account of business receipts and expenses and personal outgoings and investments. This results in great anamoly as total additions made exceeds the total on money receipts itself. It is not in dispute that the only source of unaccounted income for the assessee is the receipt of on money from construction business. Hence at any cost, the total additions made cannot exceed the construction on money receipts. Obviously, the on money receipts cannot be taxed in its entirety as assessee had also incurred certain business expenditure which were also kept out of books and which are also reflected in the same seized materials. It is well settled that the seized documents should be considered in its entirety and the revenue cannot consider that part of the seized material which is favourable to it and ignore that portion which is detrimental to reve....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... addition on account of unexplained investment in LIC policies. In this regard, we have already held that profit percentage on money receipts should be determined at 8% of Rs. 35,90,000/- for the Asst Year 2006-07. Accordingly, the question of any addition on account of peak credit does not arise. Further, the business payment as well as administrative expenses are deemed to be allowed once the profit percentage is applied to the total turnover. Further, with respect to the personal expenses, the year wise details of the same were filed by the ld AR in a tabular form which was also placed before the ld CITA.Once the business profit is determined at 8% of undisclosed receipts, then what is required to be seen is whether the said profit of 8% is sufficient to explain all the outgoings in the form of personal expenses and personal investments made by the assessee year on year and accordingly the assessee would be entitled for benefit of telescoping. Hence there cannot be any separate addition for personal expenses as made by the lower authorities. Hence wherever, the aggregate of personal expenditure , investment in LIC premiumsetc., are more than the profit arrived as above, the e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ized documents already on record before the ld AO cannot be considered as additional evidences filed by the assessee and hence we hold that there is no violation of provisions of Rule 46A of the IT Rules. 5. We find that the issue raised in assessee's appeal for the Asst Year 2007-08 in ITA No. 4705/Mum/2016 in the case of Shri Haresh Mohanlal Mehta is the same as was raised in Asst Year 2006-07. Hence the decision rendered by us for the Asst Year 2006-07 will hold good for Asst Year 2007-08 also. 5.1. With respect to revenue's appeal in ITA No. 4881/Mum/16 for the Asst Year 2007-08 in the case of Shri Haresh Mohanlal Mehta, we find that the tax effect on the disputed issues before us is less than 50 Lakhs and therefore, the same deserves to be dismissed as per CBDT CircularNo. 17 of 2019 dated 8.8.2019. We also find that the ld DR before us was not able to point out that the case falls under any of the exceptions provided in Para 10 of the said Circular of CBDT. It is well settled that the circular issued by the CBDT are binding on the tax authorities and hence the appeal of the revenue is hereby dismissed as not maintainable. 6. We find that the issue raised in assessee'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to revenue's appeal in ITA No. 4884/Mum/2016 for the Asst Year 2010-11 in the case of Shri Haresh Mohanlal Mehta, we find that the decision rendered by us for the revenue appeal in Asst Year 2006-07 will hold good for Asst Year 2010-11 also. 9. We find that the issue raised in assessee's appeal for the Asst Year 2011-12 in ITA No. 4709/Mum/2016 in the case of Shri Haresh Mohanlal Mehta is the same as was raised in Asst Year 2006-07. Hence the decision rendered by us for the Asst Year 2006-07 will hold good for Asst Year 2011-12 also. 9.1. We find that no appeal was filed by the revenue for the Asst Year 2011-12 in the case of Shri Haresh Mohanlal Mehta. 10. Now coming to the appeal filed in the case of Smt. Hema Haresh Mehta, we find that the ld AO made addition in respect of notings found in the seized documents in her premises. During the appellate proceedings, the assessee submitted that all the notings are owned up by her husband Shri Haresh Mohanlal Mehta. We find that the ld CITA held that since the entire notings of receipts and payments mentioned in the seized documents are considered in the Tally accounts, no addition was to be made in the hands of the Smt. Hema....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... have you done for Hotel Haredia and what amount is received by you for the work done by you at Hotel Haredia ? Ans: I have made the re-polishing of all the furniture / painting of walls and done the work of drainage system for the period April 2010 to June 2010. The interior work cost approx. Rs. 50 Lacs. Rs. 1.5. lacs is due from Mr Haresh M.Mehta for the work done by me which was not paid by him." 11.1. From the aforesaid statement, it could be safely inferred that there is absolutely no allegation or even mention of any cash payment of Rs. 48,50,000/- made by Shri Haresh Mohanlal Mehta to Shri Jerry D'Cunha. The third party only says that Rs. 1.50 lacs is due from Mr Haresh M Mehta which was not paid by him. The interior work costed approximately Rs. 50 lacs. Even the actual amount was not mentioned by him in his statement. Hence it could be safely concluded that the reliance placed on a third party statement is without any substance and deserves to be ignored at once. On the contrary, we find that Smt Hema Haresh Mehta had furnished the Audited Balance Sheet of M/s Haredia Hotel, proprietory concern of Smt Hema Haresh Mehta, as on 31.3.2011 relevant to Asst Year....