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TMI Blog2020 (6) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... n similar type of transactions to be a reasonable percentage of commission. Therefore Tribunal accepted the percentage of commission at 0.15% disclosed by the assessee itself. This finding is a plausible one and it cannot be said that the rate of commission was arrived at in an arbitrary manner. The same does not suffer from any error or infirmity to warrant interference, that too, under Section 260-A of the Act. - Decided against revenue. - INCOME TAX APPEAL NO.1512 OF 2017 - - - Dated:- 12-6-2020 - UJJAL BHUYAN MILIND N. JADHAV, JJ. Mr. Suresh Kumar for Appellant. P.C.: Heard Mr. Suresh Kumar, learned standing counsel, Revenue for the appellant. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (briefly 'the Act' hereinafter) has been preferred by the Revenue assailing the order dated 18.11.2016 passed by the Income Tax Appellate Tribunal, Mumbai Bench 'A', Mumbai ('Tribunal' for short) in ITA No.886/Mumbai/2012 for the assessment year 2003-04. 3. The appeal has been preferred by the Revenue projecting the following questions as substantial questions of law:- 1. Whether on the facts and in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the higher authority. After hearing the assessee and considering the materials on record, Assessing Officer passed the assessment order dated 31.12.2010 under Section 143(3) read with Section 147 of the Act. Assessing Officer held that the identity of the parties involved in the transactions were not furnished as well as genuineness of the transactions relating to total cash deposits of ₹ 4,78,94,000.00 were not satisfactorily explained by the assessee. Holding that the source, nature, genuineness and credit worthiness of the creditors relating to the transactions were not proved by the assessee, the aforesaid amount which were found in deposits in various bank accounts was added back to the total income of the assessee as unexplained income from undisclosed sources under Section 68 of the Act. 7. Aggrieved by the above and raising other issues as well, assessee preferred appeal before the Commissioner of Income Tax (Appeals)-37, Mumbai (referred to hereinafter as 'CIT (A)' or 'the First Appellate Authority'). By the appellate order dated 08.11.2011, CIT (A) noted that the same issue had cropped up before the Tribunal in several appeals including in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. 12. At the outset it would be apposite to deal with the assessment order in question. As already noticed above, following search and seizure operation under Section 132(1) of the Act assessment order under Section 143(3) read with Section 153C of the Act was passed on 26.12.2008 by the Assessing Officer determining the total income of the assessee at ₹ 62,480.00 as against the returned loss of ₹ 14,596.00. 13. Another search action under Section 132(1) of the Act was carried out subsequently on 25.11.2009 in the case of Mahasagar Group of Companies, now known as Alag Securities. Assessee was one of the companies of the above group. Consequent thereto, the concluded assessment was reopened after recording reasons and after taking prior approval of the higher authority. It was mentioned in the reasons recorded that the assessee along with the related 34 odd companies forming part of the Mahasagar Group of Companies, now Alag Securities, were engaged in fraudulent billing activities and in the business of providing bogus entries. Shri Mukesh Choksi and Shri Jayesh K. Sampat were directors of those companies. From their statements, it came to light that the said g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee was only concerned with the commission earned in providing accommodation entries. Tribunal had noted that in earlier cases the average percentage of commission was between 0.15% to 0.25% which was found to be reasonable. Since the assessee i.e. Mihir Agencies Pvt. Ltd. had itself declared the commission at 0.15%, the same was accepted. CIT (A) held that facts of the present case were identical to the facts of Mihir Agencies Pvt. Ltd. Therefore, following the above decision, CIT (A) directed the Assessing Officer to adopt only 0.15% of the total deposits as commission in the hands of the assessee and to delete the balance addition. 17. When this issue came up before the Tribunal in appeal by the Revenue, Tribunal noticed that similar issue had arisen before it in the cases of M/s. Goldstar Finvest Pvt. Ltd., M/s. Mihir Agencies Pvt. Ltd., M/s. Alliance Intermediateries and Network Pvt. Ltd. and Shri Mukesh Choksi, which were relied upon by the assessee. In fact, Tribunal found that in the case of M/s. Goldstar Finvest Pvt. Ltd., the dispute pertained to the assessment year 2003-04 which was also the assessment year in the appeal relating to the assessee and that the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered to be reasonable by the Tribunal, the same should be accepted. Accordingly, Tribunal accepted the commission declared by the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd., and set aside the order of CIT (A). Tribunal further noticed that the above stand had been consistently followed by the Tribunal in various orders. No distinguishing feature could be brought on record by the Revenue. Therefore, Tribunal following the above orders including the order in the case of the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd. in the immediately preceding year had upheld the order of the CIT (A). 19. As noticed above, Tribunal observed that this issue was present in all the appeals of the group of entities controlled by Mr. Mukesh Choksi. Be it stated that assessee was also part of the said group of entities. Therefore, maintaining uniformity Tribunal held that CIT (A) made no mistake in arriving at the impugned decision which was in conformity with the position taken by the Tribunal in all the cases pertaining to the said group of entities. Thus, order of the CIT (A) was affirmed and appeal of the Revenue was dismissed. 20. We are in agreement with the view taken by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, it was held that the assessee had failed to discharge the onus which lay on it to establish the identity of the investor companies and the credit worthiness of the investor companies. In such circumstances, the entire transaction was found to be bogus. But as already discussed in the preceding paragraphs, assessee never claimed the cash credits as its income. It admitted its business was to provide accommodation entries. In return for the cash credits it used to issue cheques to the customers / beneficiaries for slightly lesser amounts, the balance being its commission. Moreover, the cash credits had been accounted for in the respective assessment of the beneficiaries. Therefore, the decision in NRA Iron and Steel Pvt. Ltd. (supra) is clearly distinguishable and not attracted to the facts of the present case. 23. On a thorough consideration of all relevant aspects, we have no hesitation to hold that the impugned order of the Tribunal does not suffer from any error or infirmity to warrant interference and no substantial question of law arises therefrom. There is no merit in the appeal. Appeal is accordingly dismissed. However, there shall be no order as to costs. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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