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Income Tax Appellate Tribunal, “ G” BENCH,
Before: HON’BLE S/SHRI SAKTIJIT DEY (JM), & ASHWANI
आदेश / O R D E R
PER BENCH:
These are four appeals filed by the assessee against four separate orders dated 28.3.2013 passed by the ld.CIT(A)-40, Mumbai and these appeals relate to the different assessment years. Since issues raised in all these appeals are common, these appeals were heard together and decided by this consolidated order, for the sake of convenience.
First we take up appeal for the assessment year 2008-09.
In this appeal, the assessee has raised following grounds: “a) On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred in not appreciating the fact that the order passed by the AO is without jurisdiction and bad in law as the jurisdiction u/s 153A is vitiated.
b) On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred confirming addition made by AO on account of undisclosed brokerage of Rs.1,89,292/- which was never received by the appellant; c) On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred confirming addition of undisclosed brokerage income, even on the amount which pertaining to brokerage income from builders other than those who were searched and such addition amounted to Rs.146486/-“
At the time of hearing, the Ld. Counsel appearing for the assessee did not press ground no.1, therefore, dismissed as not pressed.
In ground no.2, the assessee has contested the action of ld. CIT(A) in confirming the addition made by the AO on account of undisclosed brokerage income of Rs.1,89,292/-, which according to the assessee, was in fact, not received by it.
During the course of hearing, the ld. AR at the very outset, submitted that this issue is now covered in favour of the assessee by the decision of the Mumbai Bench of the Tribunal in assessee’s own case in (AY-1999-2000) dated 24.7.2013.
On the other hand, the ld. DR relied upon the orders of authorities below.
We have gone through the arguments made by both the sides as well as orders of the lower authorities and also the decision of the Mumbai Bench of the Tribunal in assessee’s own case. The facts leading lo the above addition, as recorded in the assessment order, are that a search and seizure action u/s 132 of the IT. Act was conducted on Shri Naresh Bhaishankar Rawal Group on 20/11/2010 and the main firms of the group were M/s. Surgical Metal Industries and M/s. Tinwala Industries which were engaged in the business of construction of residential and commercial premises. The assessee was a broker working for the above mentioned two firms. During the course of the search, assessee’s statement was recorded u/s 132(4) of the IT. Act on 20/11/2010 at the office premises of M/s.Tinwala Industries, wherein he admitted that the mode of transactions in the case of the above mentioned two builders was by cheque as well as in cash and that market practice was to accept 25% to 30% sale consideration in cash. During the course of assessment proceedings, the AO noted that the assessee received brokerage @ 2% to 3% and that during the year under consideration had disclosed brokerage income of Rs.4,41,683/-. In view of the assessee’s admission in his statement recorded u/s 132(4) that the builders were accepting 25% to 30% sale consideration in cash, the AO worked out 2% of the cash component in sale consideration at Rs.1,89,292/- and added the said amount to the assessee’s total income as additional brokerage income of the assessee. During the course of appellate proceedings before Ld CIT(A), it was submitted that the income from brokerage was not received from the two parties, viz. M/s Surgical Metal Industries and M/s. Tinwala Industries, and, hence the amount worked out by the AO was based on erroneous presumption. It was further submitted that during the course of search, no evidence or document or loos paper was found by the department to indicate that any of the amounts were received by way of cash by the assessee and that there was no brokerage income received in cash during the year. It was also claimed that the same amount has been taxed twice since it is also taxed in the hands of the builder. The assessee further argued that no unaccounted cash deposit was found with the assessee. The assessee also relied upon plethora of judgments in support of his contention.
However, the ld. CIT(A) did not accept the submissions of 9. the assessee. It was held that by the Ld. CIT(A) that once the cash component has been admitted by two builders with whom the assessee having received brokerage income and the assessee admitted that cash component in such transactions, it was unbelievable that he did not receive any brokerage income on the cash component. With regard to the argument that no incriminating documents were found, it was held by the ld. CIT(A) that since the assessee himself admitted the fact in the statement recorded u/s 132(4), no further incriminating documents were required. All other arguments were rejected by the Ld. CIT(A), and dismissed the contentions by applying the ratio of the judgment rendered by the Hon’ble Supreme Court in the cae of McDowell (154 ITR 148(SC) and Azadi Bachao Andolan (263 ITR 706 (SC). It was held that once there was surrender by the builder and the assessee admitted the cash component, the brokerage is also bound to be in cash, and therefore rightly added by the AO.
Being aggrieved by the decision of ld. CIT(A), the assessee has contested the order of ld. CIT(A) before us.
It is noted by us, as brought to our notice by the ld. Counsel, that in the immediately preceding year, an identical issue in assessee’s own case came up before the Tribunal. The Hon’ble Tribunal decided this issue in favour of the assessee by observing as under:
“5. After considering the submissions on perusing the material on record, I found that there was no basis to make addition in the hands of the assessee. Neither there was any document nor any loose paper nor any evidence proving that the assessee was also earning brokerage on the amount of cash received by the builders was on account of transactions entered into with purchasers. The contention of the assessee that even the assessee has not made any transaction for these two parties for the year under consideration in respect of any flat or premises built by the builder and, therefore, for this reason also no addition should have been made in the hands of the assessee presuming that the assessee must have earned brokerage income. There should be some live link between the transaction relating to the assessee. The order of the AO and CIT(A) are very clear as no paper in respect of any brokerage income was found. Without any material addition made in the case of search, in my considered view, is not justified. In view of the above facts and circumstances of the case, I delete the addition of Rs.24,857/-, made and confirmed by the lower authorities”
The Tribunal has considered the facts of the case and amount of brokerage income added by the AO was deleted by the Tribunal, interalia, on the ground that there was no incriminating evidence to show that the brokerage income was earned by the assessee. Keeping in view the facts and circumstances of the case, the addition made by the AO on this ground was deleted by the Tribunal. Respectfully following the order of the Tribunal, we are bound by the order of the Tribunal and therefore, respectfully following the order of the Tribunal in assessee’s own case (supra) we delete the addition of Rs.1,89,292/-made by the AO. Thus, Ground No.2 is allowed.
The ld. Counsel submitted that by virtue of relief given by the Tribunal in the ground no.2 of this appeal, Ground no.3 becomes infructuous.
Since, we have decided ground no.2 in favour of the assessee, therefore, this ground is dismissed as infructuous.
As result, the appeal of the assessee is partly allowed.
Now we shall take up the appeals for the assessment years 2009-10 and 2010-11.
We find that the grounds raised in these appeals are identical to that in the appeal for the assessment year 2008-09. Since we have decided the appeal for the assessment year 2008-09 in favour of the assessee, to maintain the consistency with the view taken by us in earlier years, here also we direct the AO to delete the addition made by the AO.
As a result the appeals of the assessee are partly allowed.
Now we shall take up the appeal for the assessment year 2011-12
Grounds No.1 to 3: these grounds are identical to that of the grounds decided by us in earlier appeals. Since, we have decided the above grounds in favour of the assessee, therefore, we direct the AO to follow our order of earlier years.
In Ground No.4, the assessee has contested the action of the ld. CIT(A) in not directing the AO to give credit of advance tax of Rs.11,50,000/- being the amount confiscated during the search action.
During the course of hearing, it was submitted by the Ld. Counsel that the direction was given by Ld CIT(A) to the AO and the same is pending for implementation on the part of the AO, and therefore, he requested for re-enforcement of the direction given by the ld.CIT(A).
On the other hand, the ld. DR mentioned that he has no objection if the direction is given for giving credit of the amount confiscated from the assessee.
We have gone through the order of ld. CIT(A) and noted that the ld.CIT(A) has directed the AO to take necessary action, in this regard, as per law. It is further noted that the assessee has filed rectification petition u/s 154 of the Act on 13.3.2013 for seeking credit of advance tax being amount of Rs.11,50,000/- which was confiscated by the Income Tax Department during the course of search, which belonged to the assessee.
In view of the aforesaid factual position, we direct the AO to dispose of rectification petition filed by the assessee and to give credit of the above said amount in accordance with law and facts. We direct accordingly.
In the result, appeals of the assessee are partly allowed.
Pronounced accordingly on 18th Nov, 2015. घोषणा खुले �यायालय म� �दनांकः 18th Nov, 2015 को क� गई ।