AI Insights
The case involves 27 appeals filed by six different assessees against various orders passed by the CIT(A), Ahmedabad for the Assessment Years 2009-10 to 2014-15. The appeals were consolidated due to the similarity in the grounds and issues involved. The primary contention revolved around the validity of the reopening of assessments under Section 147 of the Income Tax Act, 1961, and the subsequent additions made to the income on account of disallowance of expenditure claimed against gross commission income. The tribunal examined the modus operandi of the cheque discounting business operated by the assessees and the commission structure involved.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 129673 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 3 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-08-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
SMC
Next Hearing Date
12-07-2023
Assessment Year
2010-2011
Appeal Filed On
23-05-2018
Judgement Text
ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 1 of 12 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA Nos.1345 & 1346/Ahd/2018 Assessment Years: 2013-14 & 2014-15 respectively Girish Ambalal Thakkar, 401, Building No.34, Anandnagar Flats, 100 Ft. Ring Road, Satellite, Ahmedabad – 380 015. [PAN – AGMPT 9327 K] Vs. The DCIT, Central Circle – 1(1), Ahmedabad. ITA Nos.1351, 1352, 1353, 1354 & 1355/Ahd/2018 Assessment Years: 2009-10, 2010-11, 2012-13, 2013-14 & 2014-15 respectively Ankur Mrugeshchandra Acharya, 15, Nutan Sardarnagar Society, Ambica Nagar, Odhav, Ahmedabad – 382 415. [PAN – AEZPA 5190 A] Vs. The DCIT, Central Circle – 1(1), Ahmedabad. ITA Nos.1356, 1357, 1358, 1359 & 1360/Ahd/2018 Assessment Years: 2010-11, 2011-12, 2012-13, 2013-14 & 2014-15 respectively Nareshkumar Manilal Senma, 87, Kundanlal Ni Chawl, Last Bus Stop, Gayatri Park, Meghaninagar, Ahmedabad – 380 016. [PAN – BRKPS 5699 P] Vs. The DCIT, Central Circle – 1(1), Ahmedabad. ITA Nos.1361, 1362, 1363, 1364, 1365 & 1366/Ahd/2018 Assessment Years: 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 & 2014-15 respectively ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 2 of 12 Subhashbhai Bharatbhai Hindocha, B-353, 1, Parwshwanath Township Part, Sector-2, Krishnagar, Nava Naroda, Ahmedabad – 382 325. [PAN – ADTPT 1264 B] Vs. The DCIT, Central Circle – 1(1), Ahmedabad. ITA Nos.1367, 1368, 1369, 1370 & 1371/Ahd/2018 Assessment Years: 2009-10, 2010-11, 2011-12, 2012-13 & 2013-14 respectively Sagarbhai Mahjibhai Rabari, 504, Rabari Vasahat, Nava Vadaj, Ahmedabad – 380 013. [PAN – AGZPR 4505 N] Vs. The DCIT, Central Circle – 1(1), Ahmedabad. ITA Nos.1372, 1373, 1374 & 1375/Ahd/2018 Assessment Years: 2009-10, 2010-11, 2011-12 & 2012-13 respectively Anilkumar Mukeshkumar Kadiya, 3772/1/B, Ambliwalo Khancho, Nr. Ladusha Pir, Kadia Kui, Dariapur, Ahmedabad – 380 001. [PAN – AVZPK 0475 F] The DCIT, Central Circle – 1(1), Ahmedabad. (Appellants) (Respondents) Assessee by Shri Mehul K. Patel, AR Revenue by Shri B.P. Makwana, Sr. DR Da te o f He a r in g 13.07.2023 Da te o f P ro n o u n ce m e n t 01.09.2023 O R D E R These twenty seven appeals are filed by six different assessees against various orders passed by the CIT(A), Ahmedabad for various Assessment Years starting from 2009-10 till 2014-15. All these appeals were heard together and, therefore, as a matter of convenience, all these 27 appeals are being disposed of by way of this consolidated order. ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 3 of 12 2. Since identical grounds of appeal are raised by the assessees and common issues are involved in all these appeals, and hence grounds raised in ITA No.1367/Ahd/2018, which is the lead matter, are being reproduced hereunder:- “1. The ld. CIT(A) has grievously erred in holding that the reopening of assessment u/s.147 of the Act is valid. 2. On facts and in law, it ought to have been held that based on the reasons recorded, the entire assessment order is void-ab-initio and invalid. 3. The ld. CIT(A) has grievously erred in confirming the addition to the extent of Rs.12,31,999/- out of total addition of Rs.13,07,387/- made by the AO on account of disallowance of expenditure claimed against gross commission income while allowing only 5% of the expenditure claimed. 4. The ld. CIT(A) has ignored the fact that in case of similar business of cheque discounting in case of the group company Jalaram Finvest Limited, the same AO has accepted the net profit in the range of 9.50% to 12.50% of the gross commission income. Hence, estimation of 95% net profit by the ld. CIT(A) without any evidence or comparable case brought on record is illogical and bad in law. 5. The ld. CIT(A) has erred in ignoring and/or not considering the appellate order of ld. CIT(A)-11, Ahmedabad rendered in case of other assessee’s of the group on identical facts, observations and findings as made in case of the appellant.” 3. These are 27 appeals for various Assessment Years starting from 2009-10 till 2014-15 by six assessees in respect of search action carried out in the Dahyalal I. Thakkar group of cases/Jalaram Finvest Limited. At the time of hearing, the Ld. AR argued that the matter in respect of the assessee Sagar Mahijibhai Rabari relating to Assessment Year 2009-10 is the lead case. At the time of hearing, the ld. AR submitted that the other 26 appeals including the assessee’s appeals for other Assessment Years as well as other assessees 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 ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 4 of 12 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. Search action under Section 132 of the Act was carried out in the D.I. Thakkar group of cases on 16.01.2014. During the survey, it was found that Dahyalal I. Thakkar has been operating through many concerns in the name of his employees/family members. The commission so earned in the business of cheque discounting through these concerns. The modus operandi of such activities is that persons having post dated cheques and who need cash/DD/RTGS etc. immediately gave him crossed bearer cheques and against such cheques, they provide them cash/DD/RTGS through their concerns. The Assessing Officer observed that during the search proceedings, Dahyalal I. Thakkar vide question no.13 of statement recorded under Section 132(4) on 16.01.2014, was asked to explain the working of the cheque discounting business. Dahyalal I. Thakkar stated that the persons having post dated cheques and who need cash/DD/RTGS etc. immediately give him crossed bearer cheques. Against such cheques, he provides them cash/DD/RTGS etc. through his concerns. Similarly those who are having cash and need RTGS/DD/Cheque against cash, they are provided RTGS/DD/.Cheque through bank accounts of his concerns. For both type of work, commission is received. Generally work comes through small shroffs and the cash is not deposited in their bank accounts because cash received is given to customers who need cash against discounting of cheque. Reply to question no.14 of the statement under section 132(4) of the Act dated 16.01.2014, Dahyalal I. Thakkar was also asked about maintaining of records of such transactions for which the said Dahyalal I. Thakkar submitted that entry of commission received is made in the books. After taking cognisance of the statement of Dahyalal I. Thakkar, the Assessing Officer observed that Dahyalal I. Thakkar is in the business of cheque discounting through various benami concerns in the name of various employees including the assessee as well as in ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 5 of 12 the name of M/s. Jalaram Finvest Limited, a flagship company of the group. But, at the time of hearing, the Ld. AR submitted that in case of Dahyalal I. Thakkar and M/s Jalram Finvest Limited for A.Y. 2008-09, 2011-12 & 2013-14 respectively, the Tribunal vide order dated 31.05.2023 has categorically stated that the question of invoking benami provision is not justifiable and, therefore, confirmed the order of the CIT(A) which was in favour 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 stated that there is no benami transactions and the assessee’s case has been on protective basis and, therefore, ground nos.1 & 2 of the present appeal are not pressed by the assessee. Hence, ground nos.1 & 2 are dismissed. 6. The Ld. AR further submitted that the CIT(A) while confirming the addition to the extent of Rs.Rs.12,31,999/- out of total addition of Rs.13,07,387/- made by the Assessing Officer on account of disallowance of expenditure claimed against gross commission income while allowing only 5% of the expenditure claimed, the CIT(A) ignored the fact that in case of similar business of cheque discounting in case of group Company Jalaram Finvest Limited, the same Assessing Officer has accepted the net profit in the range of 9.50% to 12.50% of the gross commission income and hence estimation of 95% net profit by the CIT(A) without any evidence ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 6 of 12 or comparable case is bad in law and illogical. The Ld. AR further submitted that the cash in the present case is accounted and the same was taken into account by the Assessing Officer and, therefore, expenditure to cost the business of cheque discounting for which the commission has been paid by the assessee has to be considered on the basis of 5% and not that of 75% of net profit. The Ld. AR further submitted that in case of Dahyalal I. Thakkar, the CIT(A) has taken the view that 25% net profit has to be taxed and, therefore, the Revenue is taking a different stand in each case. 7. As regards to the other appeals are concerned, the chart given by the assessee in various matters including ITA No.1367/Ahd./2018 is reproduced herein below :- Details of addition made in the case of Girish Thakkar Name F.Y. 2012-13 F.Y. 2013-14 A.Y. 2013-14 A.Y. 2014-15 Appellant’s Facts 1 Gross Commission Income offered by the appellant in his P&L 15,483 7,80,698 2 Other Commission Income 1,98,800 - 3 Less: Expenses claimed by the appellant in P&L 7,970 5,63,033 4 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 - 13 Net Addition made in the assessment order [10-11] - 5,63,033 CIT(A) Action 14 CIT(A) allowed expense @ 5% of commission [5% of amount shown in 6] - 39,035 Addition Confirmed by CIT(A) - 5,23,998 ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 7 of 12 Details of addition made in the case of Ankur Acharya Name F.Y. 2008-09 F.Y. 2009-10 F.Y. 2011-12 F.Y. 2012-13 F.Y. 2013-14 A.Y. 2009-10 A.Y. 2010-11 A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15 Appellant’s Facts 1 Gross Commission Income offered by the appellant in his P&L 14,78,543 4,17,234 14,64,257 18,29,827 3,66,056 2 Other Income 1,95,014 - - - 1,16,000 3 Less: Expenses claimed by the appellant in P&L 13,30,043 2,54,234 12,79,757 13,95,540 2,69,118 4 Less: Deduction u/s 80C 3,000 3,600 6,200 3,388 3,388 5 Net income offered in Return [1+2-3-4] 3,40,514 1,59,400 1,78,300 4,30,899 2,09,550 AO’s Action 6 Income assessed in the order by the AO [Gross Commission] 14,78,543 4,17,235 14,64,257 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) (6,200) (3,388) (3,388) 13 Additional Commission income not considered by the AO 1,95,014 - - - 1,16,000 14 Net Addition made in the assessment order [11-12-13] 11,38,029 2,57,834 12,85,957 13,99,027 1,56,506 CIT(A) Action 15 CIT(A) allowed expense @ 5% of commission [5% of amount shown in 6] 73,927 20,862 73,213 91,496 18,303 Addition Confirmed by CIT(A) 10,64,102 2,36,972 12,12,744 13,07,531 1,38,203 Details of addition made in the case of Naresh Senma Name F.Y. 2009-10 F.Y. 2010-11 F.Y. 2011-12 F.Y. 20012-13 F.Y. 2013-14 A.Y. 2010-11 A.Y. 2011-12 A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15 Appellant’s Facts 1 Gross Commission Income offered by the appellant in P&L 8,07,036 20,43,510 3,14,410 4,14197 9,43,875 2 Other Commission Income - - 1,00,000 96,000 - 3 Less: Expenses claimed by the appellant in P&L 6,48,971 18,85,140 2,36,555 3,28,335 7,28,094 4 Net income offered in Return [1+2-3] 1,58,065 1,58,370 1,77,855 1,81,862 2,15,781 ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 8 of 12 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 2,36,550 3,28,335 7,28,094 10 Total of Addition [8+9] 6,48,970 19,59,421 2,95,111 3,28,335 7,28,094 11 Additional Commission income not considered by the AO - - 1,00,000 96,000 - 12 Net Addition made in the assessment order [10-11] 6,48,970 19,59,421 1,95,111 2,32,335 7,28,094 CIT(A) Action 13 CIT(A) allowed expense @ 5% of commission [5% of amount shown in 5] 40,351 1,05,890 18,649 20,710 47,189 Addition Confirmed by CIT(A) 6,08,619 18,53,531 2,76,462 3,07,625 6,80,905 Details of addition made in the case of Subhash Hindocha Name F.Y. 2008-09 F.Y. 2009-10 F.Y. 2010-11 F.Y. 2011-12 F.Y. 2012-13 F.Y. 2013-14 A.Y. 2009-10 A.Y. 2010-11 A.Y. 2011-12 A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15 Appellant's Facts 1 Gross Commission Income offered by the appellant in his P & L 11,86,328 20,30,217 14,24,510 9,84,389 5,56,189 68,371 2 Other Income - - - - - 2,50,600 3 Less: Expenses claimed by the 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 8,04,388 3,67,944 (1,24,865) 8 Addition on account of difference in commission income 28 226 - (1) - - 9 Addition by way of disallowance of expense claimed 10,47,378 17,81,265 12,64,510 8,04,389 3,67,944 1,25,735 10 Total of Addition [8+9] 10,47,406 17,81,491 12,64,510 8,04,388 3,67,944 1,25,735 11 Additional Commission income not considered by the AO - - - - 2,50,600 12 Net Addition made in the 10,47,406 17,81,491 12,64,510 8,04,388 3,67,944 (1,24,865) ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 9 of 12 assessment order [10-11] CIT(A) Action 13 CIT(A) allowed expense @ 5% of Commission [5% of amount shown in 5] 59,318 1,01,522 71,226 49,219 27,809 - 14 Addition Confirmed by CIT(A) 9,88,088 16,79,969 11,93,284 7,55,169 3,40,135 (1,24,865) Details of addition made in the case of Sagar Rabari Name F.Y. 2008-09 F.Y. 2009-10 F.Y. 2010-11 F.Y. 2011-12 F.Y. 2012-13 A.Y. 2009-10 A.Y. 2010-11 A.Y. 2011-12 A.Y. 2012-13 A.Y. 2013-14 Appellant’s Facts 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 6 Less: Credit given for returned income 2,00,429 2,56,058 1,60,000 1,80,000 1,95,419 7 Net Addition made in the assessment order [5-6] 13,07,387 28,32,635 12,07,362 7,77,848 2,76,735 8 Addition on account of difference in commission income 57 585 - - - 9 Addition by way of disallowance of expense claimed 13,07,330 28,32,050 12,07,362 7,77,848 3,21,735 10 Total of Addition [8+9] 13,07,387 28,32,635 12,07,362 7,77,848 3,21,735 11 Additional Commission income not considered by the AO - - - - 45,000 12 Net Addition made in the assessment order [10-11] 13,07,387 28,32,635 12,07,362 7,77,848 2,76,735 CIT(A) Action 13 CIT(A) allowed expense @ 5% of commission [5% of amount shown in 5] 75,388 1,54,435 68,368 47,892 23,608 Addition Confirmed by CIT(A) 12,31,999 26,78,200 11,38,994 7,29,956 2,53,127 Details of addition made in the case of Anil Kadiya Name F.Y. 2008-09 F.Y. 2009-10 F.Y. 2010-11 F.Y. 2011-12 A.Y. 2009-10 A.Y. 2010-11 A.Y. 2011-12 A.Y. 2012-13 ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 10 of 12 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 6 Less: Credit Given for Returned Income 1,43,750 4,44,500 1,80,000 2,00,000 7 Net Addition made in the assessment order [5-6] 80,291 17,00,487 6,85,122 - 8 Addition on account of difference in commission income - - - - 9 Addition by way of disallowance of expense claimed 80,291 17,00,487 6,85,122 25,635 10 Total of Addition [8+9] 80,291 17,00,487 6,85,122 25,635 11 Additional Commission income not considered by the AO - - - 1,74,000 12 Net Addition made in the assessment order [10-11] 80,291 17,00,487 6,85,122 - CIT(A) Action 13 CIT(A) allowed expense @5% of Commission [5% of amount shown in 5] 4,015 85,024 34,256 - Addition Confirmed by CIT(A) 76,276 16,15,463 6,50,866 - 8. The Ld. DR submitted that the assessees were not individuals but are firms which are involved in cheque discounting and commission earned thereon. The CIT(A) has rightly given 5% of net profit and taxed accordingly. Thus, the Ld. DR relied upon the Assessment Order and the order of the CIT(A). 9. Heard both the parties and perused all the relevant material available on record. From the perusal of the order of the Tribunal in case of Jalaram Finvest Limited and Dahyalal I. Thakkar, it is clear that this is not benami transaction and the assessee involved herein is earning income from commission from cheque discounting business. The assessee is not disputing 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 ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 11 of 12 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 at 9.5% to 12.5% should have been adopted in assessee’s case is justifiable as the assessee is also 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. The 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. Appeal being ITA No.1367/Ahd/2018 for A.Y. 2009-10 is partly allowed. 10. From the perusal of the above charts, it appears that the CIT(A) has allowed expenses at 5% of commission but as per the directions given hereinabove in ITA No.1367/Ahd/2018, the same direction is applicable in all the appeals and hence all the 27 appeals are partly allowed. ITA Nos.1345/Ahd/2018 & Others (Group of 27 Appeals) Girish Ambalal Thakkar & Others Assessment Years: 2009-10 to 2014-15 Page 12 of 12 11. In the result, all the 27 appeals filed by the assessee are partly allowed. Order pronounced in the open Court on this 1 st September, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 1 st day of September, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad
