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Rakesh S. Shah, Versus Income Tax Officer, Wad 5 (3) , Baroda

2012 (11) TMI 1197 - ITAT AHMEDABAD

I.T.A. No. 300, 301, 302 & 303/Ahd/2010 - Dated:- 2-11-2012 - SHRI G. C. GUPTA, HON BLE VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER Appellant by: Shri S N Soparkar, Sr. Adv. Respondent by: Shri A Tirkey, Sr. DR O R D E R PER SHRI A. K. GARODIA, AM:- All these four appeals are filed by the assessee which hare directed against combined order of Ld. CIT(A) V, Baroda dated 07.11.2009 for the assessment years 1999-2000, 2000-01, 2003-04 & 2004-05. Since the issue involved in these ap .....

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and arguments are also identical and therefore, appeal for the assessment year 1999-2000 may be first decided and for the remaining assessment years, the decision in assessment year 1999-2000 can be followed. 4. Brief facts till the assessment stage are noted by Ld. CIT(A) in para 4 to 4.4 of his order which are reproduced below: 4. A survey u/s 133A of the IT. Act, 1961 was carried out by ADIT (Investigation)- Baroda on 30.03.2005 at the business premises of M/s. Durga Finance (Proprietor Smt. .....

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essment year 2000-01, the notice u/s 148 of the Act was issued on 23.03.2007. 4.1. During survey proceedings, the ADIT had impounded books of accounts, loose papers and vouchers from the premises of M/s. Durga Finance. The documents so impounded included the daily transaction sheet of M/s. Durga Finance which contained the particulars of arrangement of demand drafts / bankers cheque for few parties which also includes the transactions of the appellant. On enquiry with Shri Harin Thakkar, Manager .....

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es discounted from M/s. Durga Finance. This statement of the assessee was not found to be in conformity with the statement of Shri Harin Thakkar who had denied of having undertaken any money lending transaction with the appellant. Accordingly, the details of transactions recorded in his name in the books / material impounded from M/s. Durga Finance were furnished to the appellant. However, the AO was not convinced with the explanation offered by the appellant as according to him some of the dema .....

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ant had entered into a partnership with him by nominating his nephew Shri Snehal Shah as partner, though the entire management was controlled by the appellant through his Manager Mr. Bindesh Nakum. Mr. Mahida has also stated that the demand drafts for purchase of petroleum products from I.O.C, were always arranged by the appellant from M/s, P.P. Shroff & M/s. Durga Finance and that Mr. Mahida had never dealt with these firms issuing the demand draft as this entire affair was managed by the a .....

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r establishment of relationship with M/s. Durga Finance. 4.2 The A.O. also conducted enquiries with Indian Oil Corporation, M/s. Liladhar Petroleum, M/s. Durga Finance and Gas Authority of India Ltd, the outcome of which is reflected as under: a) Indian Oil Corporation confirmed that they had issued material against three demand drafts received from M/s Liladhar Petroleum and M/s. Veer Shahid Petroleum. b) Shri Samantsinh Mahida, partner of M/s Liladhar Petroleulm, in his statement recorded stat .....

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ial to M/s. Shri Petro Chem Industries of Megh Nagar, Dist. Jabhua of Madhya Pradesh against the DD found to have been issued by.M/s. Durga Finance. 4.3. The A.O. also noted that the business premises of M/s. Durga Finance was subjected to search by Central Bureau of Investigation (CB1), where it was found that they had submitted a list to CBI showing the details of demand drafts arranged by it at the request of the appellant Mr. Rakesh Shankerlal Shah, Baroda. On the basis of above enquiries an .....

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y evidences impounded from the premises of M/s. Durga Finance conclusively lead to the evidence that the transactions of purchase of demand drafts wherein the name of Mr. Rakesh S. Shah was mentioned on the slips actually pertained to him only. He further held that the income-tax proceedings being civil proceedings, the evidences as required in criminal proceedings are not necessarily required to prove the transactions as relating to the appellant for assessment of the income. 4.4 The AO on the .....

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rough M/s. Durga Finance and he directed the A.O. to assessee commission income @5% of the total amount of demand draft/pay order sold by the assessee in these four years. Now, the assessee is in further appeal before us regarding the part addition upheld by Ld. CIT(A) to the extent of 5%. On query by the bench, it was submitted by the Ld. D.R. that no appeal has been filed by the revenue in respect of the relief allowed by Ld. CIT(A). 6. Various arguments were raised by the Ld. A.R. regarding t .....

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of his order and for the sake of ready reference, the same are reproduced below: I have carefully considered the submissions of the appellant, the orders of the A.O. for the years under reference and also the A.Y. 2000-01 and the remand report dated 28/03/2008 and 04/11/2009. The overwhelming issue in the present case is regarding purchase of drafts or cheques, pay orders etc., from M/s Durga Finance favouring Indian Oil Corporation or Gas Authority of India Ltd on behalf of certain parties, as .....

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hrough parties like Liladhar Petroleum, Veer Shaheed Petroleum, Shri Rang Petroleum Industries etc were recorded in their books, which was not disproved by the AO by cogent reasons. Initially, M/s Durga Finance, represented by its manager Shri Harin, K. Thakkar stated that the drafts etc., were purchased by the appellant, based on which the AO has come to the conclusion that these were the unaccounted purchases of the appellant. However, Shri Harin. K. Thakkar has denied later on through, an aff .....

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s not been denied or disproved by the AO. In the circumstances, it is very difficult to treat the appellant as purchaser. 6.5.1. It may be noted here that that the next immediate question is, whether he is a commission agent? The answer appears to be yes. It is an admitted fact that M/s. Durga Finance has issued voluminous number of demand drafts at the instance of the appellant and the fact was also recorded in various slips. The amounts of transaction has not been denied which is based on the .....

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fact that he is not recording the commission in his books cannot exonerate him in light of the material found by the AO, where in the finance companies concerned recorded his name as facilitator for issuance of cheques, drafts, pay orders etc. No body indulges in such a voluminous transaction for charity. The commission charged or received from the parties concerned has not been recorded for the obvious reasons that such transactions were in cash. It may also be noted here that purchase of draft .....

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