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TMI Blog2022 (6) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee herein for the Asst Year 2015-16. Moreover, for the same block period pertaining to Asst Years 2008-09 to 2014-15, we find that this tribunal in ITA No. 2669/Mum/2018 dated 6.8.2021 had estimated the commission income in the hands of Shri Bhanwarlal Jain on substantive basis. Hence consistently, the substantive addition has always been made only in the hands of Shri Bhanwarlal Jain for this commission income. Hence there could be no confusion that would lie in the mind of the revenue, as to in whose hands this commission income should be assessed, in order to justify its protective addition. Hence we direct the ld. AO to delete the protective addition of commission income made in the hands of the assessee herein for the Asst Year 2015-16. Addition of Gross profit made on account of alleged low gross profit declared by the assessee - HELD THAT:- AO had estimated the gross profit of the assessee by taking a view without prejudice to the addition of alleged undisclosed commission income. This addition was solely made on the basis that the assessee had shown less gross profit as compared to the other alleged concerns of Shri Bhanwarlal Jain. We find that the very same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015-16) This appeal in ITA No.315/Mum/2022 for A.Y.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-47, Mumbai in appeal No.CIT(A)-47, Mumbai/10163/2019-20 dated 30/12/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 20/11/2019 by the ld. Asst. Commissioner of Income Tax, Central Circle-1(3), Mumbai (hereinafter referred to as ld. AO). ITA No.345/Mum/2022 (A.Y.2015-16) This appeal in ITA No.345/Mum/2022 for A.Y.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-47, Mumbai in appeal No.CIT(A)-47, Mumbai/10168/2019-20 dated 30/12/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 19/11/2019 by the ld. Asst. Commissioner of Income Tax, Central Circle-1(3), Mumbai (hereinafter referred to as ld. AO). ITA No.383/Mum/2022 (A.Y.2015-16) This appeal in ITA No.383/Mum/2022 for A.Y.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-47, Mumbai in appeal No.CIT(A)-47, Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the addition of gross profit, on estimation basis, of a percentage of the total turnover, without appreciating the fact that both such additions cannot coexist together. 5. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in confirming addition of alleged commission income arising out of alleged bogus unsecured loans, bogus sales and bogus purchases, without appreciating the fact that for the very same assessee for previous assessment years, being A.Y. 2012-13 to A.Y. 2014-15, the Ld. CIT(A) has deleted the protective addition of alleged commission income, thereby not following the principal of consistency. 6. On the facts and in the circumstances of the case and in law, the Ld. C1T(A) erred in changing protective addition of commission income on alleged bogus sales to substantive addition on the incorrect presumption that the same was not considered in the order of the Hon'ble ITAT in the case of Shri Bhanwarlal Jain. 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in changing protective addition to substantive addition without issuing any show cause notice or opportunity of being heard to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued the grounds on merits first, therefore, we have taken up the grounds raised on merits for adjudication. As far as the addition made in the sum of Rs 19,78,180/- towards commission income for providing accommodation entries, we find that the very same sum has been already added in the hands of Shri Bhanwarlal Jain on substantive basis, on which fact, there is absolutely no dispute. We find that in the assessments framed in the hands of the assessee herein pursuant to search for Asst Years 2008-09 to 2014-15, similar protective addition on account of commission income for providing accommodation entries was deleted by the ld. CIT(A) in the hands of the assessee and the revenue did not even challenge the same further before this tribunal. We further find that the ld. AO in para 6 of his order had emphatically mentioned that all the activities during the previous year relevant to the block period are identical to that of the assessee s activities during the previous year under consideration. While this is so, there is no reason for the ld. CIT(A) to take a divergent stand of confirming the protective addition of commission income in the hands of the assessee herein for the Asst Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of trading of diamond recorded in books of account as genuine and making addition for low gross profit rate. The ld. CIT(A) has also confirmed this addition to compensate low gross profit rate. The ld. Counsel of the assessee submitted that the Income-Tax authorities cannot blow hot and cold in the same breath. According to him if Income Tax Department has accepted the assessee as controlled and managed by Shri Bhanwarlal Jain for providing accommodation entries, then addition to compensate gross profit rate is not justified. The ld. D.R also could not controvert the fact that the assessee has been held a concern controlled by Shri Bhanwarlal Jain engaged only for providing accommodation entry bills. In our opinion such circumstances, the lower authorities are not justified in sustaining the addition to cover the low gross profit rate on the basis of books of account of the assessee which has not been accepted by the department and percentage commission has been assessed treating the purchase and sales recorded in books of accounts. Similarly commission income has also been estimated on the unsecured loan advanced by the assessee also. We have noted that in the case of Bhanwarla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of this tribunal in the case of Shri Bhanwarlal Jain in ITA No. 2669/Mum/2018 dated 6.8.2021 had incorrectly concluded that the said order of Shri Bhanwarlal Jain did not consider the addition on account of commission on sales, and accordingly made substantive addition in the hands of the assessee. This is factually incorrect in as much as we find that this tribunal had duly considered the addition on account of alleged commission on sales in the order of Shri Bhanwarlal Jain in Page 30 under point 2 of the table under the caption Accomodation entries of bogus purchases provided by assessee . If entries of bogus purchases are provided by assessee, then the same represents sales made by assessee. This has not been understood by the ld. CIT(A) while making this substantive addition. In any case, the substantive addition of commission income has already been made in the hands of Shri Bhanwarlal Jain and the similar addition was also confirmed in his hands during the block period also. Hence there cannot be any further addition of Rs 2,65,830/- in the hands of the assessee herein even on protective basis. Accordingly, the same is deleted. 7. In view of the aforesaid observations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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