TaxTMI 
TaxTMI 
2024 (6) TMI 1538
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.... appeals by the assessee by two days for assessment years 2018- 19 and 2019-20. Considering the smallness of the delay and the reasons adduced thereon, the delay is hereby condoned for both the assessment years and the appeals of the assessee for assessment years 2018-19 and 2019-20 are hereby admitted and taken up for adjudication. ITA No. 19/Jab/2023 (Revenue's Appeal) ITA No.21/Jab/2023 (Assessee's Appeals) C.O. No. 5/Jab/2023 (Assessee's Cross Objection) For Assessment Year: 2018-19 4. The grounds raised by the assessee are challenging the additions on account of unexplained investment under section 69A of the Income-tax Act, 1961 (In short 'the Act') amounting to Rs.20,53,984/- and Rs.1,10,27,000/- for assessment year 2018- 19. 5. We have heard the rival submissions and perused the materials available on record. A survey under section 133A of the Act was conducted at the premises of Shri Devendra Shobhwani, c/o Nitin Jewellers, Shalimar Market, Katni. The premises covered were proprietorship concern of Shri Shankar Lal Ahuja. The nature of business of this concern is trading of imitation/ artificial jewellery, cosmetic etc. under the name ....
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....amount of Rs.1,10,27,000/- as undisclosed income on account of unaccounted cash payments to various parties, made addition to this extent as unexplained investment under section 69 of the Act. Though, the assessee was only an employee receiving salary income from his father proprietary concern, M/s Nitin Jewellers, the statement recorded by the survey team, based on the authorization given by the proprietor of M/s Nitin Jewellers i.e. Sh. Shankar Lal Ahuja, the statement has to be construed as recorded in the context of business of M/s. Nitin Jewellery and not in the individual capacity of the assessee. The assessee submitted before the learned CIT(A) that the figure of Rs.1,10,27,000/- added by learned Assessing Officer had no basis at all, as no workings for the same had been given by learned Assessing Officer for arriving at the said figure. The assessee also submitted before learned CIT(A) that the admission made during survey was under pressure from the survey team and, in any event, the statement recorded during survey has no evidentiary value. 8. With regard to the addition of Rs.20,53,984/- on account of undisclosed purchases, the assessee drew attention of learned CIT(A....
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.... appellate proceedings. This was done as the assessee had objected to the fact that the learned Assessing Officer had not provided the basis of adoption of figure of Rs.1,10,27,000/- while framing the addition. The assessee provided the workings in the remand proceedings. Learned CIT(A) tabulated the entire whatsapp chats based on the impounded documents and arrived at the figure pertaining to assessment years 2018-19 and 2019- 20 as under :- LP12 Transactions relating to AY 2017-18 Page no. Name of the persons with whom conversation was done Date Whatsapp chat contents Amount appears to be relating to money transfer (in Rs.) Amount appears to be relating to purchase (in Rs.) 8 Bhai 16.03.2017 Rs 10. 44L359487 0 0 Bhai 24.03.2017 50000 0 Bhai 29.03.2017 Rs. 100. JCS. 593103, mama Jaipur 0 0 Total 50000 Page no. Name of the persons with whom conversation was done Date AY Whatsapp chat contents Amount appears to be relating to money transfer (in Rs.) Amount appears to be relating to purchase (in Rs.) 2. Wahe....
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.... Amount appears to be relating to money transfer (in Rs.) Amount appears to be relating to purchase (in Rs.) 1. Mumba Devi 09.06.2018 36B765324 Note Number 0 0 Pooja Bangles 18.10.2018 597 : 00 Net( 622:26- 25:26) 0 62226 Pooja Bangles 24.05.2018 2241177B Note Number 0 0 Bhai 12.04.2018 114900 0 9 Shree DabbiJi 03.05.2018 1 kg lena h, ok done, total balance 14734 100000 0 11 Sanjay Rewa 12.05.2018 75A9J4882 INR 10 6260776907 sudhirrewa 10 kg 1000000 0 12. AmrapaliMalad 04.05.2018 2134-40 (net january), 261507, 24/4 0 474947 AmrapaliMalad 14.05.2018 2241178 rv jewellers 1 kg mangawa lijiye 100000 0 13 Shweta Jaipur 16.05.2018 644680 total, 500000 jama, balance 144680, jama 300000 - 08.05, 200000 16.05 500000 jama. 0 644680 AmrapaliMalad 18.04.2018 1 kg manga lijiye 100000 0 AmrapaliMalad 04.05.2018 261507 0 261507 ....
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.... 7241170003 01.05.2018 rajdhani new 222, 57900 0 57900 7241170003 02.05.2018 jaipur 1 kg dena h 100000 0 7241170003 21.04.2018 3 kg 300000 0 7241170003 03.04.2018 998800 kg dena h, chhoteki bade, patijobahulaya h ** pure not 2000k dena h, kaha rakhe h, 998800 0 20 Raja Ahuja 12.10.2018 1 kg mayaaaya, 5 kg pagal kodiya 600000 0 Raja Ahuja 27.10.2018 10 ka 07b064015, 9301234526. D: Amt 1479000/- 147900C 0 TOTAL (A) 7242700 2411160 LPI-4: Transactions relating to A.Y.2019-20 3 Don 16.06.2018 mahipke pass na, ji ha, ok, 40 kg 4000000 0 Don 18.06.2018 28 kg ravi mama enko bulake de dena, mama ko bolo call karle, aapp h kr ke bula lo mera naam bata dena 2800000 0 2. Don 31.07.2018 Mahip, 70 kg 7000000 0 Don 03.08.2018 25 kg Amit 2500000 0 Sanjay Bhai Bhopal 19.07.2018 devenka no nahi he 3 kg aurden....
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....e ratio between sales and purchases worked out to 1.51 (10,32,390/6,83,450). The learned CIT(A) applied the same ratio of 1.51 in the value of tainted purchases of Rs.23,68,390/-and arrived at the unaccounted sales of Rs.35,76,282 (Rs.23,68,399 X 1.51). Learned CIT(A) observed that during the year under consideration, the assessee shown gross profit and net profit at the rate of 26.40%. He applied the said profit percentage on the unaccounted sales of Rs.35,76,282/- and arrived at the unaccounted profit of Rs.9,44,138/- (Rs.35,76,282 X 26.40%). Accordingly, learned CIT(A) restricted the addition to Rs.9,44,138/- as against addition of Rs.20,53,984/- made by learned Assessing Officer based on the impounded material LPI-1. 14. Aggrieved by the reliefs granted by learned CIT(A), the Revenue is in appeal before us. Aggrieved by the additions sustained by learned CIT(A), the assessee is in appeals before us. Further, the assessee has also preferred cross objections before us, which are only supportive of the order of learned CIT(A) in respect of reliefs granted to the assessee. 15. At the outset, we find that there are two additions made by learned Assessing Officer :- (i....
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....ported in 263 ITR 610 (MP) and Manmohan Sadani vs. CIT reported in 304 ITR 52 (MP) had concluded that only the profit element embedded in the unaccounted sale transaction should be brought to tax in the hands of the assessee. In the instant case before us, the assessee had made both unaccounted purchases as well as unaccounted sales. Hence, the profit element embedded thereon could alone be brought to tax. For this purpose, the learned CIT(A) had applied the profit percentage declared by the assessee itself at the rate of 26.40% and made addition of Rs.9,44,138/ -. We concur with the findings given by learned CIT(A) that the statement recorded and the replies given thereon with regard to whatsapp chats (LPI-1, LPI-2 and LPI-4) pertain only to the assessee and his brother Sh. Rahul Ahuja and not pertaining to the business of M/s. Nitin Jewellers. Hence, arguments advanced by learned AR before us that the profit percentage shown by M/s. Shankar Lal Ahuja in his books of account should be adopted, has no basis and is devoid of merit. We do not find any infirmity in the said finding of learned CIT(A). Accordingly, the grounds raised by the assessee for assessment year 2018-19 are dismi....
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....ssessee has escaped assessment. The law is very well settled that sufficiency of reasons need not be gone into at the time of recording of reasons and what is required is only a prima facie belief on the part of learned Assessing Officer. Hence, ground no. 1 raised by the assessee for assessment year 2019-20 challenging the validity of reassessment is hereby dismissed. 20. The ground nos.2 to 6 raised by the assessee for assessment year 2019-20 and ground nos.1 and 3 raised by the Revenue in their appeals are exactly identical to ground nos. 1 to 5 raised by the assessee for assessment year 2018-19 and ground nos. 1 to 3 raised by Revenue for assessment year 2018-19, hence, the decision rendered hereinabove for assessment year 2018-19 shall apply mutatis mutandis to assessment year 2019-20 also, except with variance in figures. 21. With regard to Ground No.2 raised by the revenue for deletion of addition made on account of excess stock of Rs 24,02,767/- is concerned, we find that the learned CIT(A) had given a categorical finding that the addition was made by the learned assessing officer on the ground that the same was admitted as unaccounted income by the assessee during su....