COMMISSIONER OF INCOME-TAX Vs. JAYESH S MEHTA

JUDGEMENT

(1.) THESE two appeals are preferred by the Revenue challenging the order dated 17 -12 -2007 passed by the Income Tax Appellate Tribunal, Bangalore Bench 'B' (hereinafter referred to as 'the Tribunal' for short) wherein the Tribunal held that it is reasonable to estimate the gross profit in the range of 2% taking the average of subsequent three years.

(2.) THE assessees are Jayesh S Mehta and Shanthilal O Mehta. Sri.Jayesh S Mehta is in individual and M/s.Shanthilal O Mehta is a partnership firm doing the business of sale of Copra and Coconuts. In the course of search, certain bank accounts were found. Sri.Jayesh Mehta admitted in course of search that the amounts deposited in those bank accounts represented the part of sale proceeds that was not offered to tax in the returns of income filed by him and the firm M/s.Shanthilal O Mehta. Further in the course of search itself, Sri.Jayesh Mehta offered Rs.62,27,305/ - as undisclosed income earned from unaccounted trade in Copra. He also explained how that undisclosed income was invested in various assets that were outside the books of account.

(3.) THE firm, M/s.Shanthilal O Mehta was carrying on business from 1 -4 -1995 to 31 -3 -1999 on which date it was dissolved. The said business was carried over by its partner Sri. Jayesh Mehta from 1 -4 -1999 to 31 -3 -2003. Therefore, in the block period, for the earlier portion, the assessment was made in the name of firm and for the subsequent period, it was made in the made of an individual as proprietor.