TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 603
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....ther hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. A.Y. 2011-12 IT(SS)A No. 55/KOL/2025 3. The issue raised in ground no.1 is against the order of ld. CIT (A) restricting the addition to Rs. 15,42,994/-, being brokerage earned as against the addition of Rs. 1.00 crore made by the ld. AO, based on the seized documents in search conducted u/s. 132 of the Act. 3.1. The facts in brief are that the assessee filed the return of income on 31.03.2012, declaring total loss of Rs. 2,07,116/-, which was processed u/s. 143(1) of the Act on 19.04.2012, accepting the returned loss. Thereafter, a search action u/s. 132 of the Act was conducted on the assessee on 03.02.2017 and some incriminating documents were found and seized. The assessee derived income by way of director remuneration, commission, brokerage and interest etc. Notice u/s. 153A of the Act was issued on 01.02.2018. The assessee complied with the said notice by filing the return of income on 05.04.2018, declaring total loss of Rs. 2,70,116/-. Thereafter, notice u/s. 143(2) and 142(1) of the Act along with ques....
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....ivities of cash as well as cheque transactions. This fact is not denied by the AO and in fact the same has been accepted as can be seen from the assessment order itself. The nature of business of the assessee in the assessment order is described as "Commission and Brokerage". It is also on record that main search was in the case of one of the financier and client of the assessee namely Sri B L Bothra and Vikash Bothra which can be seen from the question No. 6 raised before Sri Deepak Bhansali whose statement was recorded u/s. 132(4) on 5.2.2017 in the course of search. It is also stated in question no. 7 wherein Sri Deepak Bhansali stated that they are earning income from brokerage by arranging funds. The AO has relied on the disclosure made by the assessee for the purpose of making the addition. 7.2 As per assessment order, the A.O has made the addition on the basis of the statement of disclosure made by the assessee. In the course of assessment proceeding the assessee submitted that he was only a broker and was not aware of any disclosure petition. On being given the copy of statement, the assessee immediately retracted the same. However, the AO was of the view that asse....
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.... proves that the assessee was only a middleman. Similarly, DB/9 page 14 is also a Rukka issued by Parakh Creation of 7 Hardutt Rai Chamaria Road, Howrah in favour of Tusharji. This also proves the same fact as in DB/8 page 3. 7.3 The AO while making the assessment has relied on the statement made by the assessee. However, no specific details of the seized material have been referred while making the addition. I find that at all stages of the proceedings, the assessee is accepted to be a finance broker. The search party also raised its question nos. 8,9,10,11,12,13 and 14 to Deepak Bhansali son of the assessee who was available at the time of search which questions also suggests that the assessee was a broker. 7.4 It is apparent from those questions and replies that everywhere the assessee is accepted as broker. This is further proved from the tabulation prepared in reply to question no. 27 of the statement dated 5.12.2018 wherein the AO himself has stated the name of the borrowers and lenders, the amount, duration and rate of interest. Therefore, there cannot be any doubt that the assessee was acting as finance broker on behalf of investors. I also find from the R....
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....itted that the same was retracted very late. The assessee has submitted the reasons for the delay as according to the assessee the retraction was filed immediately after the copy of the statement was received. The assessee submitted that he was not aware of the disclosure since he as broker. Therefore, there was no occasion to file a separate statement admitting some income other than brokerage income. There appears to be some logic in the submissions of the assessee. In any case assessment has to be based on analysis of the seized materials and not on the basis of disclosure statement unless the same is backed by seized documents or any other corroborative material. As stated, the assessee filed the disclosure statement before Investigation wing. However, I find that the assessee also filed a separate computation of undisclosed income /receipts and expenditure along with said disclosure with the heading "synopsis of Income inflows from various seized materials" which was prepared from all the seized documents. The AO has also enclosed the same as annexure B of the assessment order. The said computation has not been disputed by the AO. In the said statement, year wise receipts/inco....
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....as relied on by the AO in his favour was from DB/8 page 3. The said party duly replied, accepted the transaction, disclosed the same and paid tax. The other parties stated above did not reply even though notices were served on them which suggest that they did not deny the transaction. The AO relied on another paper DB/9 page 14 which is Rukka issued by Parekh Creation. Notice was served on the said party but did not reply. I also called for the assessment records of Sri Babulal Bothra. I find that he has made disclosure of a very large sum before the Settlement Commission wherein the name of the assessee also appeared. Shri Bothra admitted before the Settlement Commission that he did financial transaction through the assessee and his son. Therefore, it cannot be disputed that assessee acted as finance broker and income was from brokerage on these transactions. 7.9 In my opinion, thus the assessee was a finance broker for arranging cash loans and was a middleman between the lenders and borrowers. This fact is also corroborated form the questions raised, reply given before the investigation wing, the assessment order, seized materials including Rukkas, the remand report sent....
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....otations of the loan transactions which means that during the block period the total rotation was twice Rs. 20 crores i.e. 40 cores. If the brokerage income is taken at 3% in average on the total transaction, the brokerage will be about Rs. 1.20 crores which can be said to have been earned by the assessee as broker. Therefore, higher of the two amounts i.e. the undisclosed income as per annexure B and estimated brokerage can safely be taken as undisclosed income of the assessee from the brokerage business. Since the assessee's computation as worked out from seized documents for all the years is higher, the same also being not disputed by the AO, is considered as undisclosed income of the assessee. I find that the assets found with the assessee in the course of search is less than the amount worked out in annexure "B". The said Annexure "B" is as under: - Though the assessee has disputed the said computation on the ground that the same also included the income already disclosed, but there is no such indication in the statement so prepared. Since the said computation was filed before the AO which does not show that the income disclosed in the return was also included therein....
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....on by Ld CIT (A) vide page 19 of his order) stated that no addition should be made on confessions but addition should be based on the seized material. The judgments/decisions on this issue were also cited in page 16 to 20 of the CIT(A)'s order. We note that the disclosure petition which was not only retracted but even otherwise there was no material for name sake to support the figures taken as income. In our considered view the addition cannot be based on disclosure petition alone unless there is corroborative materials. It was stated before us that this statement was available with the AO and prepared at his instance. Therefore, the Ld CIT(A) on the facts was perfectly justified in adopting the said figures of undisclosed income for the purpose of addition. It is stated that the Ld CIT(A) has relied on the judgements in the case of ACIT Vs. Shri Pankaj Khandelwala (supra) and CIT, Central-I, Kolkata Vs. Pramod Sharma(supra) to decide that in finance brokers cases only brokerage income is to be added. The Ld CIT(A) also recorded his finding that no material in support of the disclosure was brought on record or collected by the AO in the appellate order vide para 7.5. In the re....