ANIL D. AGRAWAL, MUMBAI V. ITO -CIRCLE 17(1)(1), MUMBAI

ITA 3808/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4312 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Accommodation entries
• Section: 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 3808 / MUM . /2018 ( ASSESSMENT YEAR : 20 09 10 ) ANIL D. AGARWAL 203,, JOSHI CHAMBERS MASJID (E), MUMBAI 400 009 PAN AERPA1868D . APPELLANT V/S INCOME TAX OFFICER WARD 1 7 ( 1 )( 1 ), MUMBAI . RESPONDENT ITA NO.3809/MUM./2018 ( ASSESSMENT YEAR : 2011 12 ) ANIL D. AGARWAL 203,, JOSHI CHAMBERS MASJID (E), MUMBAI 400 009 PAN AERPA1868D . APPELLANT V/S INCOME TAX OFFICER WARD 17(1)(1), MUMBAI . RESPONDENT ASSESSEE BY : SHRI JAYANT R. BHATT REVENUE BY : SHRI VIVEK ANAND OJHA DATE OF HEARING 07 .0 3 .201 9 DATE OF ORDER 13.03.2019 2 ANIL D. AGARWAL O R D E R A FORESAID APPEAL S HA VE BEEN FILED BY THE ASSESSEE CHALLENGING TWO SEPARATE ORDER S , BOTH DATED 1 ST MARCH 2018 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 55 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR S 2009 10 AND 2011 12. 2 . GROUNDS RAISED IN BOTH THE APPEALS ARE IDENTICAL EXCEPT THE FIGURES. 3 . IN GROUNDS NO.1 AND 2 IN BOTH THE APPEALS, THE ASSESSEE HAS CHALLENGED VALIDITY OF RE OPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT' ). 4 . AT THE OUTSET, SHRI JAYANT R. BHATT, LEARNED AUTHORISED REPRESENTATIVE, ON THE INSTRUCTIONS OF THE ASSESSEE SUBMITTED THAT HE DOES NOT WANT TO PRESS THESE GROUNDS. IN VIEW OF THE AFORESAID, GROUNDS NO.1 AND 2 ARE DISMISSED AS NOT PRESSED. 5 . IN GROUNDS NO.3 AND 4, OF BOTH THE APPEALS THE ASSESSEE HAS CHALLENGED ESTIMATION OF COMMISSIO N INCOME @ 3 %. 6 . BRIEF FACTS COMMON IN BOTH THE APPEALS ARE, THE ASSESSEE , AN INDIVIDUAL , IS STATED TO BE ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL. FOR THE AFORESAID ASSESSMENT YEARS, THE ASSESSEE FILED ITS RETURN OF INCOME IN REGULAR COURSE AND THE RETURNS OF INCOME FILED WERE 3 ANIL D. AGARWAL INITIALLY PRO CESSED UNDER SECTION 143(1) OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT' ). SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE DGIT (INV.), MUMBAI THAT THE ASSESSEE HAS INDULGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES , RE OPENED THE ASSESSMENT FOR BOTH THE ASSESSMENT YEARS UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER AFTER CALLIN G FOR THE NECESSARY INFORMATION/ DETAILS FROM THE ASSESSEE AND S EEKING AN EXPLANATION WITH REGARD TO THE GENUINENESS OF ITS BUSINESS ACTIVITIES ULTIMATELY CONCLUDED THAT THE ENTIRE ACTIVITY OF THE ASSESSEE IS TO DERIVE BENEFIT BY PROVIDING ACCOMMODATION ENTRIES AS PER THE REQUIREMENT OF BENEFICIARIES. THUS, HE HELD THA T THE ACTIVITY OF THE ASSESSEE BEING COMMISSION DRIVEN , COMMISSION INCOME HAS TO BE COMPUTED AND BROUGHT TO TAX. ACCORDINGLY, HE ESTIMATED COMMISSION @ 3% OF THE ACCOMMODATION ENTRIES OF ` 79,05,278, IN THE ASSESSMENT YEAR 2009 10 AND ` 6,22,33,404 IN ASSE SSMENT YEAR 2011 12. THIS RESULTED IN ADDITION OF ` 2,37,158, IN ASSESSMENT YEAR 2009 10 AND ` 18,67,002, IN ASSESSMENT YEAR 2011 12. 7 . THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID ADDITION S BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, LEARNED COMMISSIO NER (APPEALS) SUSTAINED THE ADDITION S MADE BY THE ASSESSING OFFICER IN BOTH THE ASSESSMENT YEARS. 4 ANIL D. AGARWAL 8 . AT THE OUTSET, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IDENTICAL ADDITION UNDER SIMILAR FACTS AND CIRCUMSTANCES WAS ALSO MADE BY THE ASSESSING OFFI CER IN ASSESSMENT YEAR 2010 11. HOWEVER, WHILE DECIDING ASSESSEES APPEAL, THE TRIBUNAL HAS REDUCED THE COMMISSION INCOME TO 1% OF THE ACCOMMODATION ENTRIES. THUS, HE SUBMITTED , FACTS BEING IDENTICAL , FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSMENT YE AR 2010 11, COMMISSION INCOME SHOULD BE REDU CED TO 1% OF ACCOMMODATION ENTRIES . 9 . THE LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSING THE AFORESAID CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE FACT THAT THE ASSESSEE HAS INDULGED IN PROVID ING ACCOMMODATION ENTRIES HAS BEEN PROVED BY THE DEPARTMENTAL AUTHORITIES. THEREFORE, THERE IS NO NEED TO INTERFERE WITH THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) AND THE ASSESSING OFFICER. 10 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED MATERIALS ON RECORD. IT IS EVIDENT , WHAT ULTIMATELY THE ASSESSING OFFICER HAS ASSESSED IS COMMISSION INCOME ESTIMATED @ 3% OF THE ALLEGED ACCOMMODATION ENTRIES AND SUCH ADDITION HAS BEEN SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS). THEREFOR E, IN THE PRESENT APPEALS, THE DISPUTE IS ONLY CONFINED TO THE REASONABLENESS OF THE ESTIMATION OF COMMISSION @ 3% OF THE ACCOMMODATION ENTRIES. IT IS NOTICED THAT WHILE COMPLETING THE ASSESSMENT FOR THE ASSESSMENT 5 ANIL D. AGARWAL YEAR 2010 11 IN ASSESSEES OWN CASE, THE ASSESSING OFFICER MADE SIMILAR ADDITION UNDER IDENTICAL FACTS AND CIRCUMSTANCES. WHEN THE APPEAL RELATING TO THE SAID ADDITION ULTIMATELY CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL, THE TRIBUNAL, IN ITA NO.1809/MUM./ 2017, DATED 21 ST FEBRUARY 2018, INIT IALLY UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. HOWEVER, SUBSEQUENTLY, WHILE DECIDING MISC. APPLICATION FILED BY THE ASSESSEE, VIDE M.A. NO.436/MUM./2018, DATED 24 TH JANUARY 2019, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE COMMISS ION INCOME @ 1% OF THE ACCOMMODATION ENTRIES. FACTS RELATING TO THE DISPUTED ADDITION IN THE PRESENT APPEALS BEING IDENTICAL TO T HE FACTS INVOLVED IN THE APPEAL RELATING TO THE ASSESSMENT YEAR 2010 11 DECIDED BY THE TRIBUNAL, AS REFERRED TO ABOVE , AND THE DECISION RENDERED THEREIN BEING BY A DIVISION BENCH, I AM BOUND BY THE SAID DECISION. HENCE , FOLLOWING THE SAID DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, I DIRECT THE ASSESSING OFFICER TO REDUCE THE COMMISSION INCOME TO 1% OF THE ALLEGED ACCOMMODATI ON ENTRIES IN BOTH THE ASSESSMENT YEARS UNDER APPEAL. GROUNDS ARE PARTLY ALLOWED. 11 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.03.2019 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.03 . 2 0 19 6 ANIL D. AGARWAL COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI