DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), KOLKATA, KOLKATA vs. SOBHA CHAND BHANSALI, KOLKATA

Per Rajesh Kumar, AM:

These are appeals preferred by the Revenue against the orders of the Commissioner of Income-tax (Appeals), Kolkata-20 (hereinafter referred to as the “Ld. CIT(A)”] dated 30.12.2024, 02.01.2025 for the AYs2011-12 to 2017-18.

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 ₹15,42,994/-, being brokerage earned as against the addition of ₹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 ₹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 ₹2,70,116/-. Thereafter, notice u/s 143(2) and 142(1) of the Act along with questionnaire were issued and assessee replied the said notices/questionnaires. The ld. AO during the course of assessment proceedings, noted that the assessee has disclosed ₹20.00 crores before Additional DIT

3.2. In the appellate proceedings, the ld. CIT (A) partly allowed the appeal of the assessee after taking into consideration the submissions and contentions of the assessee and also the evidences filed during the appellate proceedings. The ld. CIT (A) called for the remand report from the ld. AO and the assessee was confronted with the same. The assessee filed rejoinder to the remand report, which was extracted by the ld. CIT (A) in the appellate order. The ld. CIT (A) also called for the assessment records from the ld. AO and found that notices were issued u/s 133(6) of the Act to few parties and their replies were available in the assessment folder. Finally, the ld. CIT (A) after considering all these facts on record partly allowed the appeal of the assessee by observing and holding as under by

“7.1 I have duly considered the facts of the case, submissions of the appellant, assessment order and remand repot of the A.O. I find that the assessee was a finance broker earning income from brokerage in financing activities 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 assessee could not prove that the transactions were related to other parties. The AO also observed that presence of Rukka does not prove that the brokerage was the only source of income of the assessee. The AO also relied on the statement of Deepak Bhansali and the assessee to support the addition of Rs.20 crores bifurcated in number of years. The AO issued show cause notice on 22.10.2018 wherein it was stated that the disclosure was made on the basis of incriminating material. However, no such incriminating document was enclosed along with the said show cause notice. In reply to the said show cause notice the assessee denied any suchdisclosure and asked for the copy of such alleged statement. It was stated by himthat all seized documents speak of his brokerage business and that he was finance broker. The assessee also stated that some Rukkas were seized from his custody which belonged to the clients and that it was evident from such Rukka that he was a finance broker. After the reply of the assessee, the AO provided the assessee with the copy of the alleged statement vide notice dated 19.11.2018 which again was replied by the assessee reiterating that he was only finance broker. The assessee also filed an affidavit retracting the statement. The AO again issued show cause notice. The assessee replied to the said show cause notice denying any disclosure and reiterated that he was only a finance broker. The AO concluded the assessment and assessed the total income on the basis of the statement of disclosure made by the assessee. However, the AO in the process also computed the total income based on the seized documents which computation is also part of the assessment order and is annexed as Annexure -2 of the assessment order. The AO, also referred to the seized documents having ID/ DB/8 page 3 with regard to the cash transaction of 50lakhs wherein interest @ 7% was mentioned for 6 months. The AO also referred to seized paper ID DB.9 page 14 wherein again cash transaction of 10 lakhs was mentioned. I have looked into the said two pages. The seized paper DB/8 page 3, is a Rukka issued by Srijan Building tomorrows in favour of R K Jain. It is

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, the said claim is not accepted. The undisclosed income as worked out from the seized documents is taken at Rs.15,42,994/-. Accordingly, the total undisclosed income for the assessment 2011-12 is reduced to Rs.15,42,994/-. ” 3.3. After hearing the rival contentions and perusing the materials available on record, we note from the assessment orders for all the years that the income has been assessed by the AO only on the basis of disclosure made by the assessee during the search operation. We note that the assessee has denied having made any disclosure during search. We note that the assessee prepared a statement of income from the seized books as required by the Ld. AO which is annexure II of the assessment order and the Ld. AO has treated the same as unaccounted cash inflow and cash outflow. We

A.Ys. 2012-13 to 2017-18 IT(SS)A No. 56 to 60/KOL/2025 & ITA No. 1090/KOL/2025 4. The issue raised in these appeals are similar to one as decided by us in IT(SS)A No.55/Kol/2025 (supra). Accordingly, our decision would, mutatis mutandis, apply to this appeal of assessee in IT(SS)A No. 56 to 60/Kol/2025 and ITA No. 1090/Kol/2025. Hence, the appeals of the Revenue are dismissed.

Order pronounced in the open court on 02.12.2025.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 02.12.2025 Sudip Sarkar, Sr.PS

Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata