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TMI Blog2019 (10) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... (Accountant Member) For the Assessee : Mr. Hari S. Raheja, AR For the Revenue : Ms. Samatha Mullamudi, DR ORDER PER BENCH The captioned appeals filed by the assessee are directed agains the order of the Commissioner of Income Tax (Appeals)-51 [hereinafter CIT(A) ] and arise out of the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961 (the Act). As common issues are involved, we are proceeding to dispose them off through a consolidated order for the sake of convenience. Facts being identical, we begin with the AY 2010-11. 2. The grounds of appeal filed by the assessee read as under: 1. On the facts and circumstance of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to levy penalty u/s 271(1)(c) after re-quantifying quantum additions as per the Hon'ble ITAT, Mumbai order dated 16.08.2017 2. On the facts and circumstance of the case and in law, the learned CIT(A) erred in confirming the penalty u/s 271(1)(c) was leviable in respect of estimated addition towards commission income on accommodation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 21.03.2014, the Assessing Officer (AO) inter-alia made the following additions : i. Addition on account of commission income on total accommodation entries ₹ 37,90,250/- ii. Addition on account of commission income on sale and purchase bills ₹ 15,05,204/- iii. Addition on account of DEPB ₹ 33,06,523/- Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A), who vide order dated 15.02.2016 restricted the above additions to the extent of the following amounts : i. Addition on account of commission income on total accommodation entries ₹ 21,65,857/- ii. Addition on account of commission income on sale and purchase bills ₹ 8,60,117/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come has been determined by the AO on estimate basis is rejected. Therefore, in principle, no infirmity is found on the levy of penalty u/s 271(1)(c) on the quantum addition of commission earned on providing accommodation entries and also on the quantum addition of commission earned on debits/credits as per the bank statements, treated as accommodation entries. However, the AO is directed to quantify the said 2 additions as per the order of the ITAT in the quantum appeal and levy penalty only on the amounts so determined. 5. Before us, the Ld. counsel for the assessee submits that in the instant case the AO has estimated the commission rate at 3.5% of the transaction value whereas the CIT(A) has reduced it to 2% of all type of transaction. Finally, the Tribunal has held that the rate of commission should be adopted at 1% as against 2% estimated by the CIT(A). Thus the Ld. counsel argues that because of such variation from 3.5% to 2% and again to 1%, this is not a fit case for imposition of penalty u/s 271(1)(c) of the Act. 6. On the other hand, the Ld. Departmental Representative (DR) submits that the penalty has been levied by the AO on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o in turn contacts hawala entry providers and it is possible that the beneficiary and the bogus bill provider may not know each other. In other cases, the bill provider may directly deal with beneficiary. Period of providing bogus bill is also one of the deciding factors. In short, many a factors affect the rate of commission. The Tribunal has, in the cases relied upon by both the parties, adopted on or other rate depending upon the particular facts of the case. The assessee was doing this business with the help of some persons including PKP and BH. Considering the above and the peculiar facts and circumstances of the case, we are of the opinion that commission rate for all the AY.s has to be estimated. We hold that the rate of commission should be adopted at 1% as against 2% estimated by the FAA. This rate has to be applied for all type of bogus transactions entered in to by the assessee for all the AY.s i.e. for bogus bills issued, for bogus entries provided or for cheques issued against cash receipt or any other kind of non-genuine entry. Effective ground of appeal, raised by the AO, stands dismissed for all the AY.s. involved. 7.1 Further, adj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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