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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO
The assessee has filed the aforesaid appeal challenging the impugned order dated 08/02/2023, passed by the learned Commissioner of Income Tax (Appeals)–3, Nagpur, [“learned CIT(A)”], for the assessment year 2020–21.
2. Following grounds have been raised by the assessee:–
“1. The order passed U/s. 143(3) is illegal, invalid and bad in law. 2. The learned Commissioner of Income Tax (Appeals)-3, Nagpur erred in confirming addition of Rs.1,27,074/- is unjustified, unwarranted and excessive. 3. The learned Commissioner of Income Tax (Appeals) 3, Nagpur erred in confirming addition made by the learned assessing officer under the head income from business is illegal, invalid and bad in law.
2 Shyamkumar Chanduulal Sugandh ITA no.303/Nag./2023
4. On the facts and circumstances the learned Commissioner of Income Tax (Appeals)-3, Nagpur erred in not accepting the contention of the assessee that assessee has not made any cash transaction with Kamnani Group as alleged cash transaction of Rs.25,41,479/- and treated the same as unaccounted cash transaction though the same belongs to Shyambhai and not with Shyamkumar Chandulal Sugandh, therefore addition confirmed is illegal, invalid and bad in law.
5. 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 of Shyambhai 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 @5% as average estimated profit and confirmed the addition. Therefore addition confirmed is unjustified, unwarranted and excessive.
6. 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. 6. 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 147 days in filing the present appeal by the assessee. The assessee has filed application dated 08/09/2023, 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 147 days in filing the present appeal is hereby condoned. I now proceed to dispose off the appeal on merit.
3 Shyamkumar Chanduulal Sugandh ITA no.303/Nag./2023
Facts in Brief:– The assessee is engaged in the business of brokerage and commission business of Betel Nuts (supari) as commission agent under the name and style of “M/s. Shyamkumar Sugandh”. The assessee filed its return of income on 26/11/2020, declaring net taxable income at ` 42,50,705, which includes income from house property, income from business and income from other sources and agricultural income at ` 2,09,937. The assessee earned commission @ 1% and for brokerage the assessee earned brokerage @ 1% only. In the return of income, the assesse has shown income from business namely M/s. Shyamkumar Sugandh, and shown net profit at ` 20,93,207, and income from other sources at ` 15,72,749, which includes saving bank interest of ` 27,693, and interest from deposits with other concern at ` 15,45,056. 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 documents were 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 transactions with Kamnani Group of Nagpur during previous year relevant to Asstt. Year 2020-21. The assessee has also raised strong objection on issue of notices. The assessee submitted that Shri Ajay Kamnani, is not known to assessee and assessee not knowing any business concern of Kamnani Group. In the notice it is mentioned that "Shyam Bhai" but the name of the assessee is "Shyamkumar Chandulal
4 Shyamkumar Chanduulal Sugandh ITA no.303/Nag./2023 Sugandh" and not “Shyambhai” as stated in jotting and noting. It was submitted that the assessee has neither made sales nor made any cash transaction with Kamnani Group. The Assessing Officer has not accepted the contention of the assessee and relied on the basis of loose paper bundle found at the premises of Shri Ajay Kamanani, which is showing some “Shyambhai” has made cash transactions of ` 25,41,479, against the various bills. The assessee further submitted that as the assessee is not doing any trading business with Kamnani Group, hence there is no question of making any payment against the bills, 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 ` 2,03,318, @ 8% of transaction of ` 25,41,479. Being aggrieved the assessee preferred appeal before the first appellate authority.
3. The learned CIT(A) held that considering the nature of the business of the assessee and the submissions of the appellant, he was of the opinion that profit @ 5% is reasonable and hence he directed the Assessing Officer to calculate profit @ 5% on cash transaction of ` 25,41,479. Still aggrieved, the assessee is in further appeal before the Tribunal.
I have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. Keeping in view the overall facts and circumstances of the case and the assessee being a small businessman carrying on trading business of Betel Nut (suprai) as commission agent, to meet the ends of justice, I deem it fit and appropriate
5 Shyamkumar Chanduulal Sugandh ITA no.303/Nag./2023 to set aside the impugned order passed by the learned CIT(A) and direct the Assessing Officer to calculate the profit @ 3% on cash transaction of ` 25,41,479. Thus, grounds no.1 to 5, are partly allowed.
Ground no.6, relates to charging of interest under section 234A, 234B and 234C of the Act.
Charging of interests being consequential and mandatory in nature, the Assessing Officer is directed to give consequential effect while computing the income of the assessee keeping in view my findings as aforesaid.
In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 09/09/2024