Arvind Janardhan Pandey v. M.s.sanklecha, Jj

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1480 OF 2016 ALONG WITH INCOME TAX APPEAL NO.1655 OF 2016 Arvind Janardhan Pandey : Appellant. versus The Income Tax Officer, Central – II,: Respondent. Mr. Vikram Nankani, Senior Counsel a/w Mr. Prithviraj Choudhari I/by Mr.Chirag Sancheti for the Appellant. CORAM : AKIL KURESHI & M.S.SANKLECHA, JJ. DATE : 05th MARCH 2019. P.C.: 1Both these appeals are filed by the assessee to challenge thecommon judgment of the Income Tax Appellate Tribunal. The question framedby the assessee would suggest that the appellant assessee is disputing thevarious additions made by the assessing officer in the hands of the assesseewhich were confirmed by the CIT (Appeals). 2We have heard the learned Senior Counsel for the appellantassessee at considerable length. The facts that emerge from the Appeal is thatthe income tax authority had carried out search operation on various premises of the assessee during which incriminating documents were impounded andseized. These documents included a diary. Statements of the assessee werealso recorded. One Sonal Parag – the associate of the assessee was alsosubjected to search, during search a diary was found. These diaries containedentries in relation to the cash receipts and payments by the assessee. Theassessee was engaged in the activity of securing admissions for students invarious academic institutions upon payment of capitation fees in cash. Theseized diaries contained various entries of payments allegedly made by theassessee to various educational institutions for such purpose. During searchoperation the assessee was confronted with the entries in the diaries. Theassessee admitted several important aspects including the factum of paymentsmade as suggested in the diary and that the assessee was not maintaining anybooks of account where such transactions were recorded. 3The assessing officer during post search inquiries, sent severalnotices to the assessee and called for various details such as full name andaddress of the students on whose behalf such amount was collected and paidover to the educational institutions. In the order of assessment, the assessingofficer has recorded that the assessee did not supply such information and hadadopted non-co-operative approach. The assessing officer eventually carriedout estimation of what would be the assessee's income out of such activity andmade additions for both the assessment years which became subject matter of the appeals before the appellate commissioner. 4The appellate commissioner passed a detailed order. Heappreciated the evidence on record and by a speaking order gave limited reliefto the assessee and confirmed the rest of the additions made by the assessingofficer. Thereupon the assessee filed further appeal before the Tribunal. TheTribunal by impugned order gave partial relief to the assessee. The Tribunalreduced the additions to 20% of the total cash payments by way of assessee'sprofit as against 25% estimated by Commissioner (Appeals) with respect to oneof the years. In these appeals the assessee disputes the very foundation of theadditions as well as estimation thereof. 5Having heard the learned Senior Counsel for the appellant, wefind that the entire issue is factual in nature. Two revenue authorities and thetribunal have concurrently come to the conclusion that the assessee had earnedun-accounted income. Only question was of its estimation. The tribunalestimated the assessee's share of income at 20/25% of the total turn over. Itmay be that the Tribunal had adopted 25% commission for one year and 20%for another. However, that by itself would not have the order of the Tribunalwrong. Looking to the evidence on record, particularly the nature ofinvestments made by the assessee in purchase of several immovable propertiesnoted below around the same time, the fact that the assessee evaded sizable 5Having heard the learned Senior Counsel for the appellant, wefind that the entire issue is factual in nature. Two revenue authorities and thetribunal have concurrently come to the conclusion that the assessee had earnedun-accounted income. Only question was of its estimation. The tribunalestimated the assessee's share of income at 20/25% of the total turn over. Itmay be that the Tribunal had adopted 25% commission for one year and 20%for another. However, that by itself would not have the order of the Tribunalwrong. Looking to the evidence on record, particularly the nature ofinvestments made by the assessee in purchase of several immovable propertiesnoted below around the same time, the fact that the assessee evaded sizable unaccounted income from such activities cannot disputed. 6For variety of reasons we do not find any question of law arises.Firstly the entire issue as noted is fact based. The findings of the threeauthorities are concurrent. We find that the additions are not based merely onthe entries contained in the diaries collected from the assessee during search.The assessee during the course of recording of his statement had admitted tothe relevant entries contained therein. For example, the revenue authority hadconfronted the assessee with the analysis of the entries in the diaries whichshowed that the total payments made by the assessee to the institutions or sub-brokers and agents came to Rs.2906.30 lakhs. The assesee admitted that suchworking out by the revenue authority was correct and that the same was madewith his assistance. Thus, the assessee did not dispute the contents of thatdiary and in fact admitted that as shown in the diary he had made thepayments to the colleges and sub-brokers to the tune of Rs.2906.30 lakhs. In afurther question asking him to disclose his immovable assets, the assessee hadstated that he had purchased office at Navi Mumbai in 2007, a house in Goa inApril 2008, a house at Pune in 2008, two flats and a shop at Pune in 2008, twoflats at Goa in 2007, a house in his mother's name at Goa in 2007, a house inhis father's name at Raypur in 2007 and a plot of four and half acres at Goa in2005. 7When it is thus established that the assessee was engaged in theactivity of ensuring admissions of students in educational institutions by payingillegal capitation fees and when it is further established that such paymentsmade during two relevant assessment years came close to 2906.30 lakhs, theonly question remains to be decided would be as to what would be theassessee's earning out of such dealings by way of his commission. In absence ofthe assessee bringing on record any material to enable the revenue authoritiesto estimate the same with any degree of accuracy, the revenue was left with nochoice but to estimate the same on the basis of available material on record.What would be the calculation of percentage of amount that the assesseewould have retained in himself, in such circumstances, would always be amatter of estimation. The conclusion of the Tribunal cannot be stated to beperverse. No question of law arises. 8The Appeals are dismissed. [ M.S.SANKLECHA,J.] [ AKIL KURESHI, J ]