9911796707
TMI Blog2011 (5) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... search and seizure operation under section 132 of the I.T. Act, 1961 was carried out at the residential premises of the assessee on 26.07.2006. In response to the notice under section 153A(a), the assessee filed return of income declaring income for all the assessment years under appeal as under: Assessment Year Income declared 2001-02 2,81,150/- 2002-03 4,19,680/- 2003-04 6,66,830/- 2004-05 3,57,620/- 2005-06 1,36,890/- 2.1 Subsequently, the AO framed assessment under section 143(3) wherein the AO disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld the action of the AO for the detailed reasons given in para 3.2, which reads as under: I have considered the facts and the submissions. I do not agree with the appellant s view. The appellant has offered gross commission receipt at 0.25% and claimed expenses thereon at 40% which gives the net commission received at 0.15%. Whereas the Assessing Officer has allowed expenses at 20% which gives the net commission received at 0.20%. At the time of search, the appellant admitted that he was receiving commission and earning income from 0.15% to 0.25%. From this, it is evident that the appellant admitted that he was earning income by commission at the average rate of 0.20%. Therefore, the Assessing Officer is justified in allowing the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he controversy involved in ground no.1, contended that the ld. CIT(A) has erred in confirming the disallowance of 20% of estimated expenses. He contended that expenses claimed @40% was fair and reasonable. Therefore, the AO be directed to allow the expenses @40% as claimed in the return of income. 6. On the other hand, Shri R.R.Pathak, appearing on behalf of the Revenue, vehemently supported the order of the ld. CIT(A). 7. Having heard both the sides, we have carefully gone through the orders of the authorities below. It is pertinent to note that at the time of search, the assessee admitted that he was receiving commission and earning income from 0.15% to 0.25%. From this, it is clear that he was earning income by commission @0.20%. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age no.7 of the assessment order and calculated the commission by applying the rate of 0.25% instead of 0.08% shown by the assessee and made the addition in all the assessment years under appeal. 8.1 The Counsel of the assessee further submitted that in the impugned order, the ld. CIT(A) rejected the explanation of the assessee on doubts and suspicion. The counsel of the assessee pointed out that in the case of Sahyadari Textiles, no bogus bills were issued. He also drew our attention to page nos. 47 and 48 of the paper book which contain the return of income for the assessment year 2002-03 submitted by the assessee. The note no.4 of this return of income reads as under: 4. Assessee has also done business of cheque and draft discoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omparable case for application of the rate of commission at 0.25% instead of 0.08% shown by the assessee. 8.4 Finally, Counsel of the assessee pointed out that in the case of process houses, additions are made on account of bogus purchases on the basis of search materials and statement of the assessee recorded under section 131. In the assessment of such process houses, no bogus bills issued by Sahyadri Textiles were found by AO while assessing those cases. This conclusively proves that the assessee has not issued any bogus bills in the name of Sahyadri Textiles but bank account was only used for the purpose of cheques/drafts discounting business. Only other bank accounts were used for the purpose of crediting payment received on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Sahyadri Textiles, he is doing the business of cheque/draft discounting. Neither during the course of assessment proceedings nor in the impugned order, the ld. CIT(A) made any attempt to make cross-verification whether the assessee is engaged in the business of cheque/draft discounting. In case of cheque/draft discounting for 1 to 3 days, we are of the view that earning of commission @ 0.125% is fair and reasonable before allowance of expenditure as allowed by the AO in the assessment order. Looking to the facts and circumstances of the case, we are of the view that it will meet the ends of justice, if the contention of the assessee is accepted that in the case of Sahyadri Textiles, he was doing the business of cheques/draft discount ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
