ITO 13(3)(2), MUMBAI vs. RAJESH P. GHATALIA (HUF), MUMBAI

None appeared on behalf of the assessee even though the notices of hearing were sent on more than one occasion. Hence, we proceed to dispose of the appeals ex-parte, without the presence of the assessee.

We heard the ld. DR and perused the record. The assessee was running a business under the name and style of M/s Nimit Petroleum in his capacity of HUF. The assessee filed return of income last for the assessment year 1999-2000. Thereafter it did not file returns of income. The additional Director of Income Tax received information from the Crime Branch, Mumbai Police that the assessee and some other persons were involved in adulteration of petroleum products. It was further noticed that the assessee is maintaining a bank account with Corporation Bank in which huge amount of deposits were seen made. Hence, the AO reopened the assessment for both these years by issuing notice under section 148 of the Act. Since the assessee did not respond to the notices issued, the AO completed the assessments of both the years by estimating income from business at Rs.90000/- per year and also by assessing the aggregate amount of deposits made in the bank account in both the years as unexplained cash credit u/s 68 of the Act. The aggregated amount deposited by the assessee was Rs.70.40 lakhs and Rs.42.47 lakhs respectively for the assessment years 2002-03 and 2003-04 respectively.

In the appellate proceedings, the ld.CIT(A) noticed that the assessee has been exonerated from the charges of adulteration. The assessee also pleaded before the ld. CIT(A) that the deposits made in the bank account made by way of account payee cheques. Hence, the ld. CIT(A) proceeded to estimate the income of the assessee in both the years as under : a) 10% of aggregating amount of deposits as unexplained investment; b) 5% of the amount of deposits as net profit; and c) 2% of the amount of deposits as additional income earned by the assessee.

The revenue is in appeal before us, challenging the relief granted by the ld.CIT(A) and the assessee is in appeal before us challenging the income estimated by the ld. CIT(A).

Having heard the ld. DR and also upon perusal of the orders passed by the ld. CIT(A), we are of the view that the ld. CIT(A) has taken a judicious view of the matters in both the years under consideration. Accordingly, we are of the view that the orders passed by the ld. CIT(A) do not call for any interference. Accordingly, we uphold his orders for both the years under consideration.

In the result, the appeals filed by the revenue and by the assessee are dismissed. Order pronounced in the open court 17th ,Dec,2015. (संदीप गोसधई/SANDEEP GOSAIN) ( बी.आर.बधस्करि/ B.R.BASKARAN) न्यधनयक सदस्य/Judicial Member ऱेखध सदस्य /Accountant Member मुंबई Mumbai; ददनांक Dated.. 17th, Dec,2015 व.नि.स./ SRL, Sr. PS आदेश की प्रतिलऱपप अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- concerned 3. 4. आमकय आमुक्त / CIT concerned 5. ववबागीम प्रतततनधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai concerned गार्ड पाईर / Guard file. 6. आदेशानुसाय/ BY ORDER,सहामक ऩंजीकाय (Asstt.