DILIP JAYANTILAL SHAH, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 2868/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2884 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 03-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C S NAIK
• Assessee Lawyers: VIJAY KOTHARI
• Keywords: Search and seizure; Accommodation entries
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE S/SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.2868/MUM/2015 ( / ASSESSMENT YEAR: 2010-11) SHRI DILIP JAYANTILAL SHAH A/302, WHITE ARCH, MATHURDAS ROAD, KANDIVALI WEST, MUMBAI - 400067 / VS. DCIT CENTRAL CIRCLE 31 MUMBAI ./ ./ PAN/GIR NO. : ASIPS1677F ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI VIJAY KOTHARI DEPARTMENT BY: SHRI B. C. S. NAIK (CIT-DR) / DATE OF HEARING: 11.08.2016 /DATE OF PRONOUNCEMENT: 05.10.2016 ! / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 10.02.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-52, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE A.Y.2010-11. 2. THE APPELLANT HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & LAW ON SUBJECT THE ASSESSING OFFICER ERRED IN ESTIMATING COMMISSION @ 0.50% INSTEAD OF 0.10% THERE BY MAKING ADDITION OF ITA NO.2868/MUM/2015 ASSESSMENT YEAR: 2010-11 2 RS.23,95,657/-. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJECT THE CIT(A) ERRED IN UPHOLDING THE ADDITION MADE BE DELETED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS AN EMPLOYEE OF M/S.AVON CORPORATION LTD. AND FILED HIS RETURN O F INCOME U/S.139(1) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT) ON 30.09.2010 DECLARING TOTAL INCOME TO THE TUNE OF RS.2,75,250/- . THEREAFTER, SEARCH AND SEIZURE OPERATION U/S.132 OF THE ACT WAS CARRIE D OUT ON 04.02.2011. THE PREMISE OF THE ASSESSEE WAS ALSO COVERED DURING SEARCH. SOME OTHER PREMISES OF THE M/S.AVON CORPORATION LTD WERE ALSO COVERED BY THE SEARCH SIMULTANEOUSLY CONDUCTED U/S.133A OF THE ACT. DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY SOME DOCUME NTS WERE SEIZED FROM THE PREMISES OF THE M/S.AVON CORPORATION LTD A ND ALSO FROM THE PREMISE OF THE ASSESSEE. THE RECOVERED MATERIAL SP EAKS THAT THE ASSESSEE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF S ALE AND PURCHASE OF VARIOUS COMPANIES INCLUDING M/S.AVON CORPORATION LTD FOR WHICH HE WAS CHARGING COMMISSION. THE STATEMENT U/S.132(4) OF THE ACT WAS RECORDED IN WHICH HE STATED THAT HE WAS GETTING COM MISSION RANGING FROM 0.02% TO 0.10%. SUBSEQUENT TO THE SEARCH, A N OTICE U/S.153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 08.02.2012. THEREAFTER, THE ASSESSEE FILED THE RETURN OF INCOME ON 27.02.2013, OFFERING ADDITIONAL INCOME OF RS.2,75,250/- FROM THE BUSINESS OF PROVID ING ACCOMMODATION ENTRIES. WHILE COMPLETING THE ASSESSMENT, THE ASSE SSING OFFICER ESTIMATED THE INCOME @ 0.50% ON THE TOTAL TRANSACTI ONS OF RS.47,91,31,428/- MADE BY THE ASSESSEE. THE ASSESS ING OFFICER ITA NO.2868/MUM/2015 ASSESSMENT YEAR: 2010-11 3 ESTIMATED THE INCOME TO THE TUNE OF RS.23,95,657/- AND THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE APPELLANT. THEREAFT ER, THE ASSESSMENT WAS COMPLETED BY ASSESSING THE INCOME TO THE TUNE O F RS.26,16,070/- VIDE ORDER DATED 25.03.2013 PASSED U/S.143(3) READ WITH SECTION 153A OF THE ACT. THE ASSESSEE WAS NOT SATISFIED, THEREFORE FILED AN APPEAL RAISING THE QUESTION OF THE COMMISSION BUT THE CIT(A) DISMI SSED THE APPEAL OF THE ASSESSEE, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1:- 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D. THE SOLE GROUND WHICH HAS BEEN RAISED BY THE ASSESSEE IS THAT THE A SSESSING OFFICER HAS ERRED IN ESTIMATING COMMISSION @ 0.50% INSTEAD OF 0 .10% ADDING INCOME TO THE TUNE OF RS.23,95,657/-. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE HONBLE INCOME TAX APP ELLATE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2867/MUM/2015 FOR THE A.Y.2009-10 HAS DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE WHEREI N THE TRIBUNAL RESTRICTED THE COMMISSION TO THE TUNE OF RS.0.20% I N PLACE OF 0.50% AND REQUESTED TO FOLLOW WITH THE SAID ORDER. HOWEVER, THE LEARNED REPRESENTATIVE OF THE DEPARTMENT HAS STRONGLY RELIE D UPON THE ORDER PASSED BY THE CIT(A) IN QUESTION. ON APPRAISAL OF THE ASSESSMENT ORDER IT CAME INTO THE NOTICE THAT THE APPELLANT WAS ASSE RTING IN CONNECTION WITH THE GETTING THE COMMISSION @ 0.10% TO 0.20%. THE CONTENTION OF THE APPELLANT WAS NOT ACCEPTED BY THE ASSESSING OFF ICER. HOWEVER, THE ASSESSING OFFICER RELIED UPON THE STATEMENT OF SHRI PANKAJ SARAIYA ITA NO.2868/MUM/2015 ASSESSMENT YEAR: 2010-11 4 RECORDED U/S.132(4) OF THE ACT DURING SEARCH PROCEE DING WHERE HE STATED THAT HE WAS PAYING COMMISSION @ 50% TO 60% PER 100 RUPEES FOR BOGUS ACCOMMODATION ENTRIES. COPY OF ORDER IN ITA NO.2867/MUM/2015 FOR THE A.Y.2009-10 IN THE CASE OF THE CASE OF THE ASSESSEE HAS BEEN PERUSED IN WHICH HONBLE ITAT HAS RESTRICTED THE COMMISSION @0.20% IN PLACE OF 0.50% ASSESSED BY TH E ASSESSING OFFICER. HOWEVER, NO COGENT AND CONVINCING EVIDENC E ON RECORD BY WHICH THE ASSESSING OFFICER WAS SATISFIED WITH THE INCOME OF THE ASSESSEE@ 0.50% FROM THE ACCOMMODATION ENTRY. ANYH OW IN THIS REGARD THE HONBLE ITAT HAS DECIDED THE CONTROVERSY OF THE ASSESSEE IN CONNECTION WITH THE LAST PRECEDING YEAR I.E.2009-10 . 5. IN VIEW OF THE SAID CIRCUMSTANCES AND BY FOLLOWI NG DECISION OF CO-ORDINATE BENCH, WE RESTRICT THE ADDITION TO THE EXTENT OF 0.20% IN PLACE OF 0.50%. THEREFORE THIS ISSUE IS DECIDED AC CORDINGLY IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2016 SD/- SD/- (SANJAY ARORA) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 5 TH OCTOBER, 2016 MP MP MP MP ITA NO.2868/MUM/2015 ASSESSMENT YEAR: 2010-11 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. / BY ORDER, ) $ //TRUE COPY// / ! ' (DY./ASSTT. REGISTRAR) # $ , % & / ITAT, MUMBAI