TMI Blog2022 (6) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the income of the business. Apparently, Hawala business carried on by the assessee is opposed to the public policy and is prohibited by the law. Expenditure incurred is in furtherance of hawala business. Assessee also did not submit any proof of incurring any expenditure. Income was also not assessed on net basis @ 0.30 %. No proof of incurring any expenditure is available on record. Therefore, naturally no expenditure is incurred by assessee. Therefore, the action of the learned CIT A in granting deduction of 10% of the gross income earned by the assessee is not in conformity with the provisions of Section 37 (1) of the act. Therefore, we reverse the order of the learned CIT A in allowing deduction at the rate of 10% as expenditure incurred. Accordingly, ground number 1 of the appeal of the learned AO Allowed. Addition based on the incriminating material found during the course of search - Admittedly, incriminating material found during search were for AY 2013-14 only. As on the date of the search, assessment year 2010 11 is a concluded assessment. Therefore, if any addition is required to be made in concluded assessment it has to be based on incriminating material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usafali 90 ITR 271? 4. The Appellant, therefore, prays that on the grounds stated above, the order of the CIT(A)-48, Mumbai may be set aside and that of the Assessing Officer restored. 5. The appellant craves leave to add to, amend or withdraw the aforesaid ground of appeal. 02. Grounds of appeal for AY 2010-11 are similar. 03. Brief facts of the case shows that assessee is an individual. Search and seizure action u/s 132 of the act was carried out on 8/11/2012 in case of Shri Gajmangal Alias Rajendra M Hirani and assessee. During the course of search, various incriminating documents were found from both the above persons. Locker number 464, which is in the name of the assessee, also contained incriminating material. Statement u/s 131 of the act was recorded on 8/1/2013 of Mr. Rajendra M HIrani wherein he stated that the premises is given on rent to the assessee who uses it for carrying on his business of imitation jewellery. Therefore, all the documents were pertaining to the assessee. Therefore, the statement u/s 131 of the act was recorded on 4/2/2013 wherein assessee stated that Gaj Mangal is his proprietorship concern in which he carries on the business of im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of 100 and therefore his business of money transfer on which he is earning commission income of 0.3%. AO noted that, as is a common practice of all operators no books of accounts maintained therefore to work out the commission earned in the year under consideration Year wise turnover has been worked out based on turnover of banking transactions. For assessment year 2013 14 a commission income of ₹ 478,336,903/ has been worked out on a date to the total income of the assessee. Therefore on the product are basis applying the ratio of turnover down in the respective year discussed in the assessment order passed for assessment year 2013 14 the learned assessing officer also imputed the undisclosed income of ₹ 1,526,038/ for assessment year 2011 12 and ₹ 152,603 four assessment year 2010 11. Consequently assessment order for assessment year 2011 12 computed the total income of the assessee at ₹ 1,902,200/ against the returned income of ₹ 151,750 and ₹ 324,300/ for assessment year 2010 11 against the returned income of ₹ 147,500/ . 08. Both these additions were contested before the learned CIT A who passed an order dated 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that though there is no evidence found for the relevant assessment years during the course of search but the addition is required to be extrapolated based on the business being carried out by the assessee. He submitted that there is no change in the business carried on by the assessee and therefore the extrapolation made by the learned assessing officer deserves to be upheld. 012. Despite notice to the assessee, none appeared on behalf of the assessee and therefore the appeals are decided on merits in absence of the assessee as per information available on record. 013. We have carefully considered the rival contention and perused the orders of the lower authorities. Undisputedly assessee is engaged in the carrying on of the hawala business which is proved by the statement of the assessee and corroborated by the incriminating evidences found during the course of search from locker number 464 owned by the assessee. It is also the statement of the assessee. According to the provisions of Section 37 (1) of the act, any expenditure incurred by the assessee wholly and exclusively for the purpose of the business should be granted as deduction to the assessee from the income of b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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