KAMALRAMDAS TARATE,BEED vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), PUNE, PUNE

It transpires during the course of hearing with the able assistance coming from the parties that the instant batch of appeals has arisen out of the very section 132 search action dt 05.05.2016 in case of M/s. Rajdeep Buildcon Pvt. Ltd. and group concern (including these twin taxpayers). We thus, take up the instant nine appeals together for disposal for the sake of convenience and brevity.

There is hardly any dispute between the parties that keeping in mind the impugned search action dt 05.05.2016, assessment years 2012-13 to 2014-15 are “unabated” assessment years wherein no proceedings were “pending” in light of section 153A(1)(2nd proviso) at that point of time. It is in this factual backdrop that both these assessees raise their first and foremost identical legal ground in the impugned “unabated” assessment years i.e. 2012-13 to 2014-15; as the case may be, in light of (2023) 454 ITR 212 (SC) PCIT vs. Abhisar Buildwell P. Ltd. that section 153A assessments herein deserve to be quashed once there is no addition made on the basis of alleged incriminating material found / seized by the departmental authorities during search action.

There would be hardly any dispute between the parties so far as the above legal question having got settled in hon‟ble apex court regarding ambit and scope of section 153A assessments viz. unabated assessment years. We thu proceed to examine the instant first and foremost legal question in case of the former assessee Smt. Kamal Ramdas Tarate. A perusal of Assessing Officer‟s assessment(s) herein makes it clear that he had assumed section 153A jurisdiction on the basis of the alleged seized material reproduced in page 8 para (g), which turns out to be some notarized document dt 30.05.2015. The same admittedly falls in AY 2016-17 whereas we are in AYs 2013-14 and 2014-15 only in IT(SS)A No.1 & 2/PUN/2023. This clinching fact has gone un- rebutted from the departmental side that the foregoing seized document nowhere relates to AYs 2013-14 and 2014-15. Faced with this situation, we find force in former assessee‟s instant first and foremost legal ground in these twin assessment years and quash the impugned assessments since based on no incriminating material found or seized during the course of search going by PCIT vs. Abhisar Buildwell P. Ltd. (supra). Smt. Kamal Ramdas Tarate

The Revenue‟s cross appeal IT(SS)A No.9/PUN/2023 for AY 2014-15 filed in case of Smt. Kamal Ramdas Tarate follows the suit in very terms. Dismissed accordingly.

We now advert to the latter assessee Shri Prasad Giridhar Deshpande‟s former three appeals IT(SS)A Nos.5 to 7/PUN/2023 for AYs 2012-13 to 2014-15 so far as the instant legal issue of validity of section 153A assessments is concerned. Suffice to say, learned counsel fails to rebut the clinching fact that the departmental authorities had come across the assessee‟s cash deposits during the course of search which were found to be over and above the turnover declared in section 44AD returns filed at the first instance. This is indeed coupled with the fact that departmental authorities had seized jewellery purchased invoice(s) in AY 2013-14 and other incriminating documents pertaining to the last AY 2014-15 in his case. This being the clinching factual position, there is no merit in the latter assessee Shri Prasad

We now come to former assessee Smt. Kamal Ramdas Tarate‟s remaining appeals IT(SS)A Nos.3 & 4/PUN/2023 for AYs 2015-16 and 2016-17, respectively. Her first and foremost substantive ground in AY 2015-16 is regarding estimation of profits only. There is hardly any dispute between the parties inter- alia, about the clinching fact that the assessee herein is engaged in civil construction and related works business. Her post search section 153A return(s) had declared 9% profit rate on the turnover which stood enhanced to 25% in Assessing Officer‟s assessment dt 31.12.2018 and reduced to 18% in the CIT(A) discussion. Learned counsel is fair enough in not rebutting the fact that the assessee‟s books in question have been rightly rejected in both the lower proceedings. There is also no denial coming from the Revenue side that both the learned lower authorities have nowhere given any comparative instances before disturbing the assessee‟s profit rate(s) in above terms. Faced with the situation, we are of the

The assessee‟s next substantive ground in AY 2015-16 is that both the lower authorities have erred in law and on facts in confirming commission disallowance of Rs.10,16,441/- in the course of assessment as upheld in the CIT(A)‟s order. Learned counsel could hardly dispute that the assessee has not been able to substantiate his impugned claim in both the lower proceedings. We thus find merit in the Revenue‟s vehement arguments supporting the same. Smt. Tarate‟s latter substantive ground in IT(SS)A No.3/PUN/2023 is declined in very terms. This appeal is partly accepted therefore.

We are now left with Smt. Tarate‟s last appeal IT(SS)A No.4/PUN/2023 for AY 2016-17 raising sole substantive ground of

We now come to the latter assessee Mr. Prasad Giridhar Deshpande‟s four appeals IT(SS)A Nos.5 to 8/PUN/2023 for AYs 2012-13 to 2016-17 so far as the remaining grounds therein are concerned. We reiterate that the first and foremost legal ground challenging validity of section 153A assessments has already been adjudicated against him and in Revenue‟s favour.

Mr. Prasad Giridhar Deshpande‟s remaining latter substantive grounds in AY 2012-13‟s appeal IT(SS)A No.5/PUN/2023 challenge unexplained cash deposit addition of Rs.13,25,400/- representing the difference between the declared turnover u/s 44AD of the Act i.e. Rs.36,35,000/- and bank deposits amounting to Rs.49,75,400/-, respectively. We may make it clear that neither the assessee has been able to prove source of the impugned cash deposits as attributable to his receipts u/s 44AD nor the Revenue could rebut the inference that the assessee had been carrying on regular business activities and therefore, this amount is a cash receipt in civil construction and related activities only. Faced with this situation, we deem it appropriate that larger interest of justice would be met in case the impugned addition of Rs.13,25,400/- is assessed at GP rate of 10% (supra) only in the peculiar facts and circumstances of the case. Ordered accordingly. Necessary computation shall follow as per law. This appeal IT(SS)A No.5/PUN/2023 is partly allowed in above terms.

Shri Prasad Giridhar Deshpande‟s second appeal IT(SS)A No.6/PUN/2023 raises second substantive ground that both the

The assessee‟s last substantive ground in AY 2013-14 appeal seeks to reverse unexplained jewellery addition of Rs.6,66,775/- made in both the lower proceedings. A perusal of the assessment discussion in pages 14 and 15 indicates that the learned Assessing Officer has himself extracted the corresponding alleged purchase vouchers. Learned departmental representative fails to dispute that the actual amounts paid as per the said vouchers turns out to be much less than the impugned addition of Rs.6,66,775/-. Rather his assessment discussion in para 8.1 suggests that the assessee‟s claim all along was to have actually paid of Rs.3.74 lakhs i.e. Rs.24,000/- as advance and Rs.3.5 lakhs as per the latter invoice; respectively. We thus, go by the statutory presumption u/s 292C to restrict the impugned addition of Rs.6,66,775/- to the extent of actual payment of Rs.3.74 lakhs only. Necessary computation shall follow as per law. This appeal IT(SS)A No.6/PUN/2023 is partly allowed.

Shri Prasad Giridhar Deshpande‟s appeal IT(SS)A No.7/PUN/2023‟s sole surviving substantive ground is only regarding profit estimation @ 18%, is directed to be re-computed @ 10% (supra) in foregoing terms by adopting judicial consistency in absence of any distinction on facts or law; as the case may be. Ordered accordingly. This appeal IT(SS)A No.7/PUN/2023 is partly allowed.

Shri Prasad Giridhar Deshpande‟s last appeal IT(SS)A No.8/PUN/2023 for AY 2016-17 raises the first and foremost issue of addition of Rs.13,38,500/- in respect of alleged loan given to one Mr. Gaikwad family. Learned counsel could hardly dispute the Assessing Officer‟s detailed discussion in paragraphs 4 to 5 wherein he had come across the seized material representing an MOU dt 14.07.2015 falling in the previous year, which carries statutory presumption u/s 292C. Learned counsel vehemently argued that there is no clarity as to when the impugned actual payment of loan was made. We find no force once the assessee has duly acknowledged the impugned cash loan in the MOU dt

The assessee‟s latter substantive ground seeks to reverse both the learned lower authorities‟ action adding Rs.20 lakhs representing “unpaid” price involving the former taxpayer Smt Kamal Ramdas Tarate. Suffice to say, we have already deleted the impugned addition in preceding paragraphs in case of Smt. Kamal Ramdas Tarate. We adopt the very reasoning herein as well to accept the instant latter substantive ground. This impugned addition of Rs.20 lakhs stands deleted therefore. IT(SS)A No.8/PUN/2023 is partly allowed.

It is made clear before parting that the learned Assessing Officer shall consider telescoping benefit as well in all these cases while framing his consequential computation as per law.

To sum up, former assessee Smt. Kamal Ramdas Tarate‟s appeal IT(SS)A No.1/PUN/2023 is allowed. Her second appeal IT(SS)A No.2/PUN/2023 is also allowed whereas Revenue‟s cross-appeal therein IT(SS)A No.9/PUN/2023 is dismissed. Smt. Tarate‟s appeal IT(SS)A No.3/PUN/2023 is partly allowed and last appeal IT(SS)A No.4/PUN/2023 is allowed as hereinabove. Latter assessee Shri Prasad Giridhar Deshpande‟s three appeals IT(SS)A Nos.5 to 7/PUN/2023 are partly allowed and last case IT(SS)A No.8/PUN/2023 is allowed in above terms. A copy of this common order be placed in the respective case files.