VINOD SANWALDAS DHINGRA,NAGPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2(2), NAGPUR

Following grounds have been raised by the assessee :-

On the facts and circumstances the learned Commissioner of Income Tax (Appeals)-3, Nagpur erred in making addition of noting and jotting made by the Kamnani group and relied on the rough seized material from the premises of Kamnani group and without granting any opportunity to cross examine and on the basis of rough noting and jotting treated the same as unaccounted financial transaction and estimated income @3% as average estimated profit and confirmed the addition. Therefore addition confirmed is unjustified, unwarranted and excessive.

The appellant denies liability to be assessed to interest u/s 234A, 234B and 234C. Without prejudice the levy of interest u/s 234A, 234B and 234C is unjustified, unwarranted and excessive.

The appellant seeks permission to add any other ground of appeal or amend or alter the aforesaid ground of appeal at the time of hearing of the appeal.”

During the course of hearing, the Registry has pointed out that there is a delay of 222 days in filing the present appeal by the assessee. The assessee has filed application dated 21/11/2023, seeking condonation of delay which is also supported by a duly sworn affidavit. As per the learned Authorised Representative’s own admission, the delay in filing the second appeal before the Tribunal lies on the part of the learned Authorised Representative and not the assessee and since the balance of convenience lies on the part of the assessee, therefore, I am of the opinion that the assessee’s appeal cannot remain un-admitted due to the fault on the part of the learned A.R. representing the assessee. However, despite the delay, in the interest of justice, I am of the opinion that the assessee is prevented in filing its appeal belatedly and thus the delay of 222 days in filing the present appeal is hereby condoned. I now proceed to dispose off the appeal on merit.

Fact in Brief :- The assessee is engaged in the interest business and assessee is given loan and advances to various parties. The assessee also derived income from commission. The assessee filed its return of income on 14/12/2020, declaring net taxable income at ` 5,28,030, which includes income from business. A search and seizure action under section 132(1) of the Income Tax Act, 1961 (“the Act”) was conducted at residential and business premises of the Kamnani Group, Nagpur, on 16/01/2020, and it was concluded on 28/01/2020. During the search and seizure action in Kamnani Group, some rough noting on document was found. The contention of the Department is that the assessee has made cash transaction with Kamnani Group and there were some jotting and noting. The case of the assessee is that, the assessee has not made any cash transaction with Kamnani Group of Nagpur during the previous year relevant to assessment year 2020-21. The assessee has also raised strong objection on issue of notice. The assessee submitted that there is no such transaction with Kamnani Group and no cash transaction were made with Kamnani Gourp. The contention of the assessee that transaction made with Kamnani Group by cheque and through proper banking channel and duly recorded in the books of account of the assessee, hence there is no question of transactions made in cash, which were shown in the seized materials. The Assessing Officer has not accepted the contention of the assessee and treated unaccounted cash transaction and made addition of ` 4,59,272, @ 8% of transaction of ` 57,40,900. Being aggrieved, the assessee preferred appeal before the first appellate authority.

I have heard the rival arguments, perused the material available on the record and gone through the order of the authorities below. The learned A.R. appearing for the assessee submitted that the assessee could not appear before the first appellate authority as the circumstances of the assessee was beyond control. The learned A.R. thus prayed that the assessee be granted one opportunity to appear before the learned CIT(A) by restoring the entire matter back to the file of the learned CIT(A) for denovo adjudication. Keeping in view the overall facts and circumstances of the case and the assessee being a small businessman having commission income, I deem it fit and appropriate to set aside the impugned order passed by the learned CIT(A) and direct him to calculate the profit @ 2% on transaction on cash sale of ` 57,40,900 i.e., ` 1,14,818, on account of brokerage on interest. Thus, grounds No.1 to 5 are partly allowed.