9911796707
TMI Blog2022 (6) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... ing grounds of appeal in Appeal for AY 2011-12 :- ""1. On the facts and circumstances of the case and in law, the Ld Commissioner of Income Tax (Appeal) erred in allowing 10% of expenses incurred towards earning commission income received in respect of banking transactions and also in respect of loose papers found during the course of search proceedings. 2. On the facts and circumstances of the case and in law, the Ld' Commissioner of Income Tax (Appeal) erred in deleting the addition of undisclosed income amounting to Rs.17,50,458/- as estimated on hawala business of transporting cash from one place to another as per modus operandi as admitted by the assessee; without appreciating the fact that the assessing officer has rightly ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 imitation jewellery. He stated that he did not have any bank account for his business carried on and all the transactions are carried out in cash. The transactions are written on loose papers. Accordingly, notice u/s 153A of the act was issued to the assessee for assessment year 2011 - 12 on 24/9/2013. Initially, Assessee challenged the notice and raised several objections. On issue of show cause notice, the objections were withdrawn and assessee filed return of income on 27/2/2015. 04. The learned assessing officer found that that from the premises of the assessee various bank accounts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed at Rs. 152,603/- by assessment order dated 20/11/2015. 07. The learned assessing officer further noted that seized materials pertaining to assessment year 2013 - 14 were found and seized which shows that entries in those loose papers are written in abridged form using the quotient 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 Rs. 478,336,903/- has been worked out on a date to the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the basis of the documents found for assessment year 2013 - 14, therfore in such circumstances, extrapolation cannot be upheld. To stretch the estimation of money to other years, there has to be some basis. Without any single document found in the search for any of the assessment year 2007 - 08 to 2012 - 13, there is no ground for any estimation. Accordingly he deleted the estimated addition on extrapolation of seized documents found for assessment year 2013 - 14 based on which the addition has been made in this year was deleted. 09. The learned assessing officer is aggrieved with the order of the learned CIT - A, has preferred this appeal. The learned assessing officer is aggrieved with two aspects of the order of the learned and CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 business. However the explanation 1 provides that any expenditure incurred by the assessee, which is prohibited by law, is not considered as an expenditure incurred by the assessee wholly and exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seized material pertains to assessment year 2013-14 and not assessment year 2010 - 11. Therefore, in absence of any incriminating material the learned CIT - A has correctly deleted the addition for assessment year 2010 - 11. Further, for assessment year 2011 - 12, no scrutiny assessment was pending. Therefore, it is also a concluded assessment as on the date of search. As no incriminating evidences are pertaining to this assessment year, the learned CIT - A has correctly deleted the addition. Accordingly, ground numbers 2 - 4 of the appeal for both the assessment years are dismissed.
015. In the result, appeals of the learned assessing officer are partly allowed.
Order pronounced in the open court on 09.06.2022. X X X X Extracts X X X X X X X X Extracts X X X X
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