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TMI Blog2023 (11) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... o dealing with the cheque discounting and commission on not just directly but through various other shroffs for whom the assessee has to pay commission in part. The net profit at 25% of gross commission adopted in Dahyalal I. Thakkar, the same rate should be adopted in the case of assessee as well as the same is justifiable through various records of commission income earned as well as commission paid to other shrifts by the assessee. Observation of the CIT(A) that there is no documentary evidence appears to be incorrect as the assessee has given clarification to that extent by giving the modus operandi of the working of the cheque discounting and commission paid thereon. The Revenue at no point of time disputed that the assessee is also providing cash to various parties on cheque and also taking cash for which the assessee is issuing cheque. Thus, the expenditure worked out at Rs. 75,388/- appears to be not justifiable and it is hereby directed to the Assessing Officer to give credit of the expenditure by allowing the same at 25% of gross commission as expenditure and quantify the same. - Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER For the Appellant : Shri Mehul K. Patel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for various Assessment Years are identical on the issues contested herein. Therefore, we are taking up ITA No. 1367/Ahd/2018 for A.Y. 2009-10 in case of Sagar Mahijibhai Rabari. The facts of the case are that the case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 and notice under Section 148 of the Act dated 05.02.2016 issued after recording reasons under Section 148 which was duly served upon the assessee. The assessee filed his return of income on 29.04.2016 declaring total income at Rs. 2,00,429/-. Thereafter, the assessee sought for copy of reasons recorded for reopening which was made available to the assessee by the Assessing Officer. Notice under Section 143(2) of the Act dated 05.05.2016 was issued and duly served upon the assessee. Notice under Section 142(1) of the Act dated 12.05.2016 was issued and served upon the assessee. In response to this notice, the CA/AR of the assessee attended and submitted the details as called for from time to time. The AR of the assessee filed objections dated 10.05.2016 against the reopening of the assessment under Section 147 of the Act which was disposed of by the Assessing officer vide order dated 12.05.2016. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of the assessee therein and dismissed the appeal filed by the Revenue. After discussing all the facts and statements, the Assessing Officer held that the commission income has been estimated on one side of transaction i.e. at the time of credit only as it is impossible that customers/shroffs comes for cheque discounting will pay double commission to the assessee. The Assessing Officer further held that even the assessee failed to produce any proof to that effect which proves that commission has already been paid to the various parties. Therefore, no deduction of commission and other expenses was allowed nor allowable as the same were likely to be paid in cash and hence the Assessing Officer made addition of Rs. 13,07,387/- on protective basis, stating that year-wise commission has been worked out for the benami concerns managed and controlled by the assessee. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. AR submitted that there is no benami transaction as concluded by the Tribunal in case of Dahyalal I. Thakkar and Jalaram Finvest Limited wherein it is categorically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less: Deduction u/s. 80C 14,542 - 5. Net Income offered in return [1+2-3-4] 1,91,771 2,17,665 AO s Action 6 Income assessed in the order by the AO [Gross Commission] 15,488 7,80,698 7 Less: Credit given for returned income 1,91,770 2,17,670/- 8 Net Addition made in the assessment order [5-6] - 5,63,028 9 Addition on account of difference in commission income - - 10 Addition by way of disallowance of expense claimed 7,970 5,63,033 11 Total of Addition [8+9] 7,970 5,63,033 12 Additional Commission income not considered by the AO 1,98,800 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18,29,926 3,66,056 7 Less: Credit given for returned income 3,40,510 1,59,400 1,78,300 4,30,900 2,09,550 8 Net Addition made in the assessment order [6-7] 11,38,033 2,57,835 12,85,957 13,99,026 1,56,506 9 Addition on account of difference in commission income - - - 99 - 10 Addition by way of disallowance of expense claimed 13,30,043 2,54,234 12,79,757 13,95,540 2,69,118 11 Total of Addition [9+10] 13,30,043 2,54,234 12,79,757 13,95,639 2,69,118 12 Deduction claimed u/s 80C not considered (3,000) (3,600) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,77,855 1,81,862 2,15,781 AO s Action 5 Income assessed in the order by the AO [Gross Commission] 8,07,040 21,17,791 3,72,971 4,14,197 9,43,785 6 Less: Credit given for returned income 1,58,070 1,58,370 1,77,860 1,81,860 2,15,780 7 Net Addition made in the assessment order [5-6] 6,48,970 19,59,421 1,95,111 2,32,337 7,28,005 8 Addition on account of difference in commission income - 74,281 58,561 - - 9 Addition by way of disallowance of expense claimed 6,48,970 18,85,140 2,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant in P L 10,47,378 17,81,265 12,64,510 8,04,389 3,67,944 1,25,735 4 Net Income Offered in Return [1+2-3-4] 1,38,950 2,48,952 1,60,000 1,80,000 1,88,245 1,93,236 AO s Action 5 Income assessed in the order by the AO [Gross Commission] 11,86,356 20,30,443 14,24,510 9,84,388 5,56,189 68,371 6 Less: Credit Given for Returned Income 1,38,950 2,48,952 1,50,000 1,80,000 1,88,245 1,93,236 7 Net Addition made in the assessment order [5-6] 10,47,406 17,81,491 12,64,510 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Gross Commission Income offered by the appellant in his P L 15,07,759 30,88,108 13,67,362 9,57,848 4,72,154 2 Other Income - - - - 45,000 3 Less: Expenses claimed by the appellant in P L 13,07,330 28,32,050 12,07,362 7,77,848 3,21,735 4 Net Income offered in return (1+2-3) 2,00,429 2,56,058 1,60,000 1,80,000 1,95,419 AO s Action 5 Income assessed in the order by the AO [Gross Commission] 15,07,816 30,88,693 13,67,362 9,57,848 4,72,154 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant's Facts 1 Gross Commission Income offered by the appellant in his P L 2,24,041 23,44,987 8,65,122 51,635 2 Other Commission Income 56,000 - 1,74,000 3 Less: Expenses Claimed by the appellant in P L 1 36 291 17,00,487 6,85,122 25,635 4 Net Income offered in Return [1+2-3] 1,43,750 4,44,500 1,80,000 2,00,000 AO'S Action 5 Income assessed in the order by the AO [Gross Commission] 2,24,041 21,44,987 8,65,122 51,635 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the addition on account of income earned from commission from cheque discounting in his hand. The assessee s plea is that the addition of income without giving credit for expenses incurred for earning this income is not justifiable on the part of the Assessing Officer. In case of Dahyalal I. Thakkar, net profit at 25% of the gross commission was taken and his statement recorded on various occasions clearly set out that half part of the commission received were paid to various intermediaries/shroffs as they are giving the work of cheque discounting to the assessee. The said contentions of the assessee was not accepted by the CIT(A) but from the perusal of records, it appears that the assessee is receiving only half part of the commission and not the entire commission as to divert the full amount of commission into perks to its various intermediaries which are giving the business to the assessee. In fact, it is an admitted position that the assessee is keeping the record of commission income and from the statement it emerges that the commission paid to other shroffs is also reflected from various statements. The fact in case of Jalaram Finvest Limited, net profit which was shown ..... X X X X Extracts X X X X X X X X Extracts X X X X
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