TaxTMI 
TaxTMI 
2024 (9) TMI 1715
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....return filed by the assessee, the Assessing Officer came to the conclusion that the source of the cash deposit of Rs. 6,09,74,438/- in the bank account remained unverified. He, therefore, reopened the assessment by recording the following reasons: "REASON FOR REOPENING The assessee is an individual and as per return of income the assessee is engaged in Financial Services Provider (Code 804) The assessee had filed return of income on 20/11//2012, declaring income at Rs 3,10,000/-. 2. In this case information has been received from the DCIT, Central Circle 4(4), Mumbai that during F.Y.2011-12 the assessee had deposited cash at Rs. 3,16,38,294/-in M/s Renuka Mata Multi State Urban Co-op Credit Society Ltd., in which case Search & Seizure Action was carried on 26/05/2017. During the action the above information had been revealed. 3 On verification of ITD system and ITBA system, it is seen that the assessee had declared gross business income at Rs. 3,33,134/- & salary income at Rs 2,41,276/- in the return of income filed for A.Y 2012-13. So from above facts it is clear that the total receipts by the assessee, amounting to Rs. 3,16,38,294/-, is not commensur....
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.... 6.1 As stated by the assessee that during the year under consideration he was into the business of brokerage commission, money lending & financial adviser. Further verification of the bank account statements it is seen that there is regular deposits and withdrawals are there for the entire year. Hence, it is clear that the assessee is into the business of different nature. Accordingly, the whole deposits of Rs. 6,09,74,438/- should be taken as the turnover for the year under consideration. Since, the assessee is into the business of money lending where the net profit is always higher side compare to bank loan interest However, considering the facts of the case and nature of business, the net profit is calculated @ 8% of turnover of Rs. 6,09,74,438/-. Accordingly, the net profit arrives at Rs. 48,77,987/-. Further, as per computation of income, the assessee has already offered income from business of Rs. 8,19,119/-. Hence, difference of amount of Rs. 40,58,868/- (Rs. 48,77,987/- Rs. 8,19,119/-) is added back to the total income of the assessee. Addition: Rs. 40,58,868/-" 4. In appeal, the CIT(A) / NFAC upheld the action of the Assessing Officer by observing as u....
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....e has not maintained proper books of accounts. During the course of assessment proceedings, the appellant while explaining the source of cash deposits, had claimed that it includes other deposits/transfers too but the appellant did not explain the sources of entire cash deposits. Since the appellant failed to explain the nature of all the cash deposits the AO has rightly considered the deposits as turnover of appellant from money lending and financing business. The appellant had admittedly not maintained proper books of accounts to explain the income earned from money lending business and brokerage/commission activity separately. The claim of the appellant that the entire activity was done by him on brokerage/commission basis and earned only 2% commission is not supported by any evidence. Therefore contentions raised by the appellant are not found acceptable. Further the AO while estimating the net profit at the rate of 8%, held that in the banking business, the net profit is much higher than 8%, however considering the mixed nature of activities of the appellant, the AO had estimated the net profit at the rate of 8%. Hence the addition made by the AO by estimating net profit at th....
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.... therefore, the same should be admitted. 8. The Ld. DR on the other hand strongly opposed the additional ground filed by the assessee and submitted that the assessee has not taken any such ground before the CIT(A) / NFAC and had participated in the assessment proceedings without raising any objection before the Assessing Officer. Therefore, the assessee should not be allowed to raise the additional ground. 9. We have heard both the sides on the issue of admission of additional ground. It is an admitted fact that the additional ground raised by the assessee is purely a legal one and all necessary facts are already on record and no new facts are required to be investigated, therefore, the additional ground raised by the assessee is admitted in the light of the decision of the Hon'ble Supreme Court in the cases of National Thermal Power Co. Ltd. Vs. CIT (supra) and Jute Corporation Of India Ltd. vs. CIT (supra). 10. The Ld. Counsel for the assessee at the outset drew the attention of the Bench to the reasons recorded and the provisions of section 153C of the Act. He submitted that as per the provisions of section 153C of the Act, if any information contained therein relat....
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....has estimated such profit in the preceding assessment year, the same cannot bind the Assessing Officer to adopt the rate of 2% for the impugned assessment year. He submitted that the CIT(A) / NFAC has passed a speaking order on this issue which should be upheld. 14. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer on the basis of information available that the assessee has deposited cash of Rs. 3,16,38,294/- in M/s. Shri Renuka Mata Multistate Credit Society Ltd. in which search and seizure operation was carried out on 26.05.2017, reopened the assessment u/s 147 of the Act, reasons of which are already reproduced in the preceding paragraphs. It is the submission of the assessee through the additional ground that since the information came to light during the course of search in the case of M/s. Shri Renuka Mata Multistate Credit Society Ltd., the proper course of action should have been invoking the provisions of section 153C of the Act and not the provisions....
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....assessment proceedings are concerned, we find that the case of the assessee was reopened on the basis of information received from the DCIT, Central Circle - 1, Pune according to which details emerged during the statement recorded u/s 132(4) of the Act of Shri Sachin Nahar and during search and post search enquiries by the Investigation wing and also during the course of enquiries conducted during search proceedings by the Central Circle - 1(1), Pune that the assessee has received cash loan of Rs. 6,20,00,000/- through Shri Sachin Nahar. Further, the various documents, note books, note pads and loose sheets found during the course of search contained the business details of Shri Sachin Nahar. The provisions of section 153C of the Act read as under: "153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, ....
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....r No. Pn/DCIT/CC 1(1)/Info./2019-20 dated 10.06.2019 vide which information about the cash loan was provided to you. In the case of Shri Sachin Nahar, Search was carried out on 04/08/2017, wherein Shri Sachin Nahar has admitted that various parties have taken cash loans from other parties through him, since he was a broker between these two parties, Shri Sachin Nahar has received commission for this transaction. The details of the parties who have taken cash loans have been obtained from Shri Sachin Nahar. There is also a mention of these persons in the seized documents (copy enclosed). 2. The case of NARENDRA BAFNA (PAN: AAVPB7561N), who has taken cash loan from various parties through Shri Sachin Nahar, pertains to your charge. The copy of statement recorded u/s. 132(4) of the IT Act, 1961 on 04.08.2017 of Shri Sachin Nahar as well as related documents regarding cash loan taken by the party along with the related pages of Shri Sachin Nahar's submission containing name of the above mentioned person and the Assessment Years in which the transactions were made are enclosed herewith for reference and necessary action at your end." 20. We find the Assessing Offic....