The Commissioner Of Income Tax-14,Mumbai v. K.k. Shah (

13.ITXA.764,765&768-11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION [1] INCOME TAX APPEAL NO.764 OF 2011 The Commissioner of Income Tax-14,Mumbai. Vs. K.K. Shah (Prop. K.K. Jewellers) ..Appellant. ..Respondent. [2] INCOME TAX APPEAL NO.765 OF 2011 The Commissioner of Income Tax-14, Mumbai. Vs. K.K. Shah (Prop. K.K. Jewellers) ..Appellant. ..Respondent. [3] INCOME TAX APPEAL NO.768 OF 2011 The Commissioner of Income Tax-14, Mumbai...Appellant. Vs. K.K. Shah (Prop. K.K. Jewellers) ..Respondent. .... Mr. Suresh Kumar, for the Appellant. Mr. Jitendra Jain a/w. Mr. Jas Sanghavi i/b. PDS Legal, for the Respondent. 2 CORAM : J. P. DEVADHAR & A.R. JOSHI, JJ. A.R. JOSHI, JJ. th JANUARY, 2012. DATED : 24 P.C. 1.Following questions of law are raised by the Revenue in these Appeals.Appeals. “(a) Whether, on the facts and circumstances of the case and in law, the Tribunal is right in upholding the order of the CIT(A) in directing the AO to adopt the unaccounted turnover from sale of jewelery at Rs.9.00 crores and from sale of bullion at Rs.3.00 crores per annum without appreciating that the bifurcation of turnover between jewelery and gold is not possible on the basis of the seized material? (b) Whether, on the facts and circumstances of the case and in law, the Tribunal is right in holding that there was no justification of extrapolation for the purpose of estimating turnover and the decision of the Hon'ble Supreme Court in case of H.M. Esufali is not applicable on the facts of the assessee's case?” 2.The assessment years involved herein are A.Ys. 2002-03, 2003-04 & 2004-05. 3. On 19.9.2003 a search action was carried out at the premises of the assessee wherein a paper was found which contained transactions of purchase and sale of jewellery and bullion during the period from 1.1.2002 to 11.8.2002. Though the transactions recorded in the seized paper related to partly A.Y. 2002-03 (1.1.2002 to 31.3.2002) and partly A.Y. 2003-04(1.4.2002 to 11.8.2002), the Assessing Officer applied the estimated turnover for the entire period of assessment for all the assessment years and accordingly made additions in all the assessment years. 4.On appeal filed by the assessee, the CIT (A) arrived at a conclusion that the turnover of the transactions recorded for the period from 1.1.2002 to 11.8.2002 cannot be applied for the entire period. The CIT(A) further held that there is evidence to show sale of jewellery and bullion and accordingly directed the Assessing Officer to treat 25% of the turnover related to sale and purchase of bullion and 75% of the turnover related to sale and purchase of jewellery. 5.On further appeal, the ITAT directed the Assessing Officer on the basis of the material on record to treat 54% from jewellery transaction and 46% from bullion transaction. In our opinion, the decision of the ITAT is based on a finding of fact and no question of law arises, and hence the first question cannot be entertained. 6.As regards the second question is concerned, this Court in the case of CIT Vs. C.J. Shah & Co. reported in 246 ITR 671 and in the case of CIT Vs. Dr.M.K.E. Memon reported in 248 ITR 310, has held that in case of search, additions can be made only on the basis of the materials found during the course of search and for the period recorded therein and same cannot be applied for the entire block period. In this view of he matter, second question also cannot be entertained. 7.All the three appeals are dismissed accordingly. (A. R. JOSHI, J.)(J. P. DEVADHAR,J.)