SHRI KASHYAP SURESH BRAHMBHATT,AHMEDABAD vs. DCIT, CENTRAL CIRCLE-2(3),, AHMEDABAD

The assessee, in the present case, is an individual. The Vigilance Squad of State Police, Gandhinagar conducted a raid at his residential premises at 13, Vakharia Nagar-II, Kalol, Dist. Gandhinagar on 21.01.2012. & 1266/Ahd/2018 Shri Kashyap Suresh Brahmbhatt Vs. DCIT AY : 2011-2 & 2012-13 2 During the course of the said raid, cash of Rs.43,88,500/- was found and seized besides some incriminating documents and articles such as laptops, mobiles, TV etc. On the basis of the information received relating to this raid conducted by the Vigilance Squad of State Police, Gandhinagar and the seizure of cash and incriminating documents and articles, an authorization under Section 132A of the Income-tax Act, 1961 (“the Act” in short) was issued on 30.01.2012. An application was also made before the Additional Chief Judicial Magistrate, Kalol for requisition of assets, in response to which the police authority was directed by the Court vide order dated 15.05.2012 to handover all seized assets which were ultimately requisitioned under Section 132A of the Act on 05.09.2012. Although a different stand was taken by the assessee in respect of cash of Rs.43,88,500/- found during the course of raid, he finally claimed that he was engaged in the business of real estate agency and the said cash represented his commission income earned from the said business. Consequent to action under Section 132A of the Act, proceedings under Section 153A of the Act were initiated in the case of the assessee inter alia for both the years under consideration i.e. AY 2011- 12 and 2012-13 by issuing notices on 24.06.2013. During the course of assessment proceedings, copies of printouts taken from the seized laptops were provided to the assessee and he was asked to explain the transactions of Rs.33,09,01,900/- and Rs.111,48,49,350/- relating to AYs 2011-12 and 2012-13 respectively as found recorded in his laptop. He was also called upon to produce 11 persons whose names appeared in the entries made in his laptops for verification and examination regarding the relevant transactions. In his letter dated 30.12.2014 filed before the Assessing Officer, it was stated by the assessee that all these names were fake as no persons involved in betting used to give their true names and identity. The assessee again was asked by the Assessing Officer to explain the nature of entries as & 1266/Ahd/2018 Shri Kashyap Suresh Brahmbhatt Vs. DCIT AY : 2011-2 & 2012-13 3 found recorded in his laptops and show-cause as to why income from the said entries relating to cricket betting should not be added on estimated basis. In reply, the following explanation was offered by the assessee before the Assessing Officer in writing:-

"I am not having an established and regular business and as per opportunities coming to me I am inclined to earn my livelyhood. I have petty brokerage business and for 2 yrs I have done cricket betting brokerage also. However I have declared all my income from all the source in return of income filed by me. I am as small person and no books of accounts or any records are maintained by me. The income earned is also in cash hence the details of parties is not available with me. In fact I have filed my return of income for A.Y. 2012-13 based on assets i.e. cash in hand and not on the basis of income. I do not have any other assets except one house which belongs to my wife regarding value of transactions in A.Y. 2011-12 & 2012- 13 I beg to submit that no profit or loss is linked to value of transactions. To explain more I submit as under:-

The above explanation offered by the assessee was not found acceptable by the Assessing Officer for the following reasons given in paragraph No.7 of his order:-

The Assessing Officer thus estimated the income of the assessee at Rs.33,09,019/- and Rs.1,11,18,493/- from the business of cricket betting for & 1266/Ahd/2018 Shri Kashyap Suresh Brahmbhatt Vs. DCIT AY : 2011-2 & 2012-13 6 AYs 2011-12 and 2012-13 respectively being 1% of the total transactions as found recorded in the seized laptops and made addition to that extent to the total income of the assessee in the assessments completed under Section 143(3) r.w.s. 153A of the Act vide orders dated 19.01.2015.

Against the orders passed by the Assessing Officer under Section 143(3) r.w.s. 153A of the Act for both the years under consideration i.e. AYs 2011-12 and 2012-13, appeals were preferred by the assessee before the learned CIT(A) and the submissions made before the Assessing Officer were mainly reiterated on behalf of the assessee before the learned CIT(A) while challenging the additions of Rs.33,09,019/- and Rs.1,11,18,493/- made by the Assessing Officer for AYs 2011-12 and 2012-13 respectively on account of income from cricket betting as estimated by applying a net profit rate of 1% on the total transactions as found recorded in the laptops. The learned CIT(A) did not find merit in the said submission made on behalf of the assessee and proceeded to confirm the additions of Rs.33,09,019/- and Rs.1,11,18,493/- made by the Assessing Officer for the following reasons given in paragraph No.6 of his impugned order:-

Aggrieved by the order of the learned CIT(A), the assessee has preferred these appeals before the Tribunal.

At the time of hearing fixed in this case on 27.06.2022, none has appeared on behalf of the assessee. There was a similar non-compliance on the part of the assessee when these appeals were fixed for hearing before the Tribunal on 28.05.2021, 11.08.2021, 11.11.2021, 02.03.2022 and 02.05.2022. A letter dated 23.02.2022 filed by the Authorized Representative of the assessee, however, is available on record wherein a request has been made to decide these appeals based on the paper-book filed by the assessee containing certain documents as well as written submission. These appeals are accordingly being disposed of ex-parte qua the appellant-assessee after hearing the arguments of the learned DR and perusing the relevant material available on record including the written submission and paper-book filed by the assessee. It is observed that the first main contention raised by the assessee in the written submission is that the cash of Rs.43,88,500/- found and seized in the raid conducted by the Vigilance Squad of State Police, Gandhinagar was stated by the assessee to be relating to his cricket betting business in the first statement and the Assessing Officer was not justified in treating the same as dalali (brokerage) income of the assessee from the real estate agency business on the basis of the statement recorded subsequently. It is submitted that even in the said statement it was stated to be dalali & 1266/Ahd/2018 Shri Kashyap Suresh Brahmbhatt Vs. DCIT AY : 2011-2 & 2012-13 8 income of the assessee without any reference to the real estate agency business. We are unable to accept this stand of the assessee. As already noted, different explanation was offered by the assessee in respect of cash found and seized during the raid conducted by the Vigilance Squad of State Police, Gandhinagar, and although it was initially stated to be the income of the assessee relating to his cricket betting business, this stand was subsequently changed by the assessee by stating that the same was belonging to his brother-in-law Mr. Himanshu and even the affidavit of Mr. Himanshu was also filed owning the said cash. Thereafter, in the statement recorded on 19.10.2012, the assessee again changed this stand by stating that the cash found and seized was his income from dalali. Even though there was no mention of any real estate agency business in the said statement, there was a specific mention by the Assessing Officer on page No.7 of his order that a letter dated 09.09.2014 was filed by the assessee during the course of assessment proceedings stating that he was doing dalali business of sale and purchase of land, flat & bungalows in the last two years. Keeping in view the same as well as all other facts of the case, we do not find any infirmity in the orders of the authorities below to treat the cash of Rs.43,88,500/- found and seized during the raid conducted by the Vigilance Squad of State Police, Gandhinagar at the residential premises of the assessee as his commission/dalali income from real estate agency business.

The second contention raised by the assessee in the written submission filed before the Tribunal is that the addition of 1% of total transactions relating to cricket betting, as made by the Assessing Officer on estimated basis, has been done purely out of whims and fancies without any basis and the learned CIT(A) is not justified in confirming the same. In this regard, it is pertinent to note that the transactions as found recorded in the & 1266/Ahd/2018 Shri Kashyap Suresh Brahmbhatt Vs. DCIT AY : 2011-2 & 2012-13 9 laptops found from the residence of the assessee were related to the cricket betting as found by the Assessing Officer on the basis of relevant material and there was nothing brought on record by the assessee to dispute or doubt the same. The assessee also never offered any satisfactory explanation regarding the nature of the said transactions as well as the income earned by him from the said transactions despite sufficient and specific opportunity afforded by the Assessing Officer in this regard during the course of assessment proceedings. He also did not produce any books of account or other relevant details to show the exact amount of income earned by him from the said transactions. The Assessing Officer, therefore, was left with no option but to estimate the income of the assessee at 1% of the total transactions for both the years under consideration as found recorded in the laptops found from the possession of the assessee. The question now is whether the estimate so made by the Assessing Officer and confirmed by the learned CIT(A) is fair and reasonable in the facts and circumstances of the case? In this regard, it is observed that no details whatsoever were furnished by the assessee to show or even suggest the income actually earned by the assessee from the relevant transactions of cricket betting. The only submission made by him in this regard was that he had to pay 100% of the amounts due to bet-winners, whereas the recovery from the bet-losers was only 60-70%. This claim of the assessee, however, was not accepted by the Assessing Officer as well as by the leaned CIT(A) for the cogent and convincing reasons given in their respective orders – the relevant portions of which are already extracted by us in the foregoing portion of this order. It is also noted that neither before the authorities below nor even before the Tribunal, the assessee has brought anything on record to show that the profit actually earned by him from the transactions of cricket betting was lower than 1% as estimated by the Assessing Officer ITA Nos. 1265 & 1266/Ahd/2018 Shri Kashyap Suresh Brahmbhatt Vs. DCIT AY : 2011-2 & 2012-13 10 and confirmed by the learned CIT(A). Keeping in view all these facts and circumstances of the case, we are of the view that the estimate made by the Assessing Officer of the assessee’s income at 1% of the total transactions of cricket betting as found recorded in the laptops seized from the possession of the assessee is quite fair and reasonable and the learned CIT(A) was fully justified in confirming the same. In that view of the matter, we find no justifiable reason to interfere with the impugned order of the learned CIT(A) on this issue and upholding the same, we dismiss both the appeals filed by the assessee.

In the result, both the appeals filed by the assessee are dismissed.