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TMI Blog2022 (9) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, the Assessing Officer asked the assessee to provide necessary evidence in support of the claim that no commission was charged in case of said transfer entries. However, the assessee failed to provide any such evidence before the Assessing Officer. The assessee has neither filed any such evidence before the Ld. First Appellate Authority nor before us and therefore in such circumstances, the claim of the assessee cannot be accepted the ground raised by the assessee is accordingly dismissed. Allowance of 50% of the expenses claimed by the assessee in the return of income - assessee has also filed Nil return of income and claimed expenses against the revenue shown from the business income - Since, the facts and circumstances of the assessee are identical in the other group cases wherein also addition for commission income from accommodation entry income has been assessed therefore, respectfully following the finding of the Tribunal [ 2016 (11) TMI 1668 - ITAT MUMBAI] we direct the AO to allow 50% of the expenses against the commission income. The ground of the appeal of the assessee is accordingly allowed. - ITA No. 69/MUM/2022, 70/MUM/2022, 71/MUM/2022 & 72/MUM/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses claimed should be allowed against income estimated @0.15%. 8. The appellant craves leave to add to, alter, amend and/ or delete in all the foregoing grounds of appeal. 3. Briefly stated, facts of the case are that consequent to search action u/s 132(1) of the Act carried out at the premises of Mahasagar Group of cases [re-named as Alag Securities Pvt. Ltd. ], assessment u/s 143(3) r.w.s. 153A was passed on 08.12.2011 wherein the Assessing Officer assessed the total income at ₹1,12,12,150/- as against Nil income declared by the assessee. In the course of search, it was found that the companies of Mahasagar Group of cases were involved in providing accommodation entries by way of cheque against receipt of cash from the customers seeking cheques. The Assessing Officer estimated income from commission @ 2% for issuing accommodation entries on the sum of the credit entries appearing in the bank accounts of the assessee. Against assessment order passed, the Ld. First Appellate Authority confirmed the additions by way of a combined order dated 31.07.2012 for assessment year 2004-05 to assessment year 201011. On further appeal by the assessee, the Tribunal by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. The Assessing Officer has applied commission income @ 2% on the deposits found in the bank accounts. Whereas, the assessee is seeking commission income @ 0.15% in view of decisions in other group cases and including decision of the Hon ble Bombay High Court in ITA No. 1512 of 2017 in the case of the assessee for assessment year 200304. We find that the Assessing Officer in the impugned order has estimated the rate of 2% for commission income mainly on the ground that decision of the Tribunal in group cases have not been accepted by the Department and appeals have been preferred to the Hon ble Bombay High Court in other group cases. But we find that no stay has been obtained by the Department on the operation of the order of the Tribunals in other cases including the finding of Hon ble High Court in the case of the assessee for assessment year 2003-04 wherein @ 0.15% of the commission income has been upheld. The relevant finding of the Hon ble Bombay High Court is reproduced as under: 18. Since Tribunal had relied upon its own decision in the case of M/s. Goldstar Finvest Pvt. Ltd., it would be useful to examine the same. In M/s. Goldstar Finvest Pvt. Ltd. whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in bank account out of gross receipts for estimating the commission income. We find that during the assessment proceedings, the Assessing Officer asked the assessee to provide necessary evidence in support of the claim that no commission was charged in case of said transfer entries. However, the assessee failed to provide any such evidence before the Assessing Officer. The relevant finding of the Assessing Officer is reproduced as under: 5.2 Secondly, in the set aside proceedings the assessee company has claimed transfer entries other deductions against the total of hawala entries worked out by the AO in assessment order stating that such deduction represents entries given to sister concerns etc. First and foremost, in support of its claim the assessee company has not submitted any evidence nor the names of companies to whom such entries were given and whether these entries were accounted for in the assessment orders of such group companies and therefore such claim is found to be not acceptable. Similarly, Mr. Mukesh M. Choksi was asked whether such claim was ever made before the Ld. CIT(A) or Hon'ble ITAT in appeal proceedings and was shown copy of Form No. 35A and For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn are submitted. The claim so made by assessee company is considered, however, such claim is found to be not acceptable as the said letters are filed in original scrutiny assessments submitting details evidences of expenses claimed in return of income. As per the assessment order in response to Notice u/s. 153A assessee company filed return of income declaring NIL income i.e. all the expenses claimed in the return were set off against income offered in return of income and thereafter NIL income was filed. As against Nil income returned by the assessee commission income is assessed by the AO taking 2% of hawala entries. Thus the expenses claimed in the set aside proceedings are over and above the expenses claimed in return of income filed in response to Notice u/s. 153A since the said expenses are claimed against commission income worked out by the AO in the assessment order. This fact is also evident from the computation of total income made in the original assessment orders wherein the income of the assessee is assessed at only commission income and no other addition or deduction of income or expenses is made therein. Further, in the assessment orders commission income was work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the decision in the case of Goldstar Finvest Pvt. Ltd. (supra) reproduced as under: 4. In all these cases of the Group concerns of Sri Mukesh Chowksi including assessee, the assessments have been made in the wake of search and seizure action under section 132(1) dated 25.11.2009 carried out in the cases of M/s Mahavir Securities Private Limited; M/s Mihir Agencies P. Ltd; M/s Alliance Intermediaries and Network P Ltd and other Group companies including assessee which was managed by Shri Mukesh Choksi himself and his family members. In all the Group concerns as well as in the case of the assessee, the main issues involved were determination of commission #ecome or net profit for providing bogus share trading entries and other accommodation entries. Department has held that the commission/net profit from such bogus entries should be taken at 2%. We find that, in the various Tribunal orders, which have been referred to above as well as in the case of the assessee. itself, the net profit rate of 0.15% have been accepted. Not only that 50% of the expenses claimed have also accepted, in other words, only balance claim of expenditure of 50% have been confirmed. The relevant obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue has been decided. in the following manner: 4. On the other hand, the ld. DR relied upon the order of AO. Nothing has been brought on record by him to distinguish the orders relied upon by the ld. Counsel. 5. We have gone through the orders of lower authorities and the orders of the co-ordinate bench of Tribunal in assessee's own case and other orders relied upon by the assessee. It is noted by us that identical issue had came up before the Tribunal in assessee's own case for the assessment year 2002-03. The relevant observations from the Tribunal's order are reproduced below: 12. Having, carefully examined the various orders in the case of different assessees' it has become amply clear that in these types of activities, brokers are only concerned with their commission on the value of transactions. Now the question comes what would be the reasonable percentage to the commission on the total turnover? The assessee has also made out a case that the customers do not come directly to him and they come through a sub- broker who also charges a particular share of commission. In all the judgments what has been stated is that an average percentage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en, the same have not been argued before us on the ground that they will become purely academic. Accordingly, the appeal of the assessee is treated as allowed. As stated in the operating part of the order that similar issues are involved in all the appeals, therefore, this finding will apply mutatis mutandis in all the impugned years. Thus, all the appeals filed by the assessee are treated as allowed. 10. Since, the facts and circumstances of the assessee are identical in the other group cases wherein also addition for commission income from accommodation entry income has been assessed therefore, respectfully following the finding of the Tribunal (supra), we direct the Assessing Officer to allow 50% of the expenses against the commission income. The ground of the appeal of the assessee is accordingly allowed. 11. In the result, the appeal of the assessee of assessment year 2005-06 is partly allowed. 12. The ground raised in the assessment years 2008-09 to 2010-11 are identical to grounds raised in assessment year 2005-06, therefore, following our finding in assessment year 2005-06. The grounds of the assessee in AY 2008-09 to 2010-11 are decided mutatis mutandis. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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