MUKESH CHOKSI, MUMBAI V. DCIT CC 46, MUMBAI

ITA 418/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0508 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P SINGH
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 143(3)

Judgement Text

, , B, INCOME TAX APPELLATE TRIBUNAL BENCHES B,MUMBAI BEFORE SHRIP.K. BANSAL, VICE PRESIDENT, AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 995/MUM/2015 (AY 2004-05); ITA NO. 997/MUM/2015 (AY 2007-08); ITA NO. 418/MUM/2015 (AY 2006-07); ITA NO. 419/MUM/2015 (AY 2008-09); ITA NO. 420/MUM/2015 (AY 2009-10); ITA NO. 421/MUM/2015 (AY 2010-11); MUKESHCHOKSI BLOCK H SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E), MUMBAI / VS. DCIT CC 46 R. NO. 659,AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT ) P.A. NO. AA SPC7767J APPELLANT BY MR. MUKESHCHOKSI RESPONDENT BY MR. N.P. SINGH (CIT DR) / DATE OF HEARING: 30 /0 5 /2017 /DATE OF ORDER: 30 /0 5 /2017 / O R D E R PER BENCH, THESE 6 APPEALS UNDER SECTION 253 OF THE INCOME TAX ACT ARE DIRECTED AGAINST THE ORDERS OF COMMISSIONER OF INCO ME TAX (APPEALS) FOR DIFFERENT ASSESSMENT YEARS. IN ALL THE APPEALS THE ASSESSEE HAS CHALLENGED THE CORRECTNESS OF ORDER OF LD COMMISSIO NER (APPEALS) IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271(1) ( C) OF THE ACT. IN ALL APPEALS ALMOST COMMON GROUNDS OF APPEAL ARE RAISED, THUS ALL APPEALS WERE HEARD TOGETHER AND ARE DECIDED BY CONS OLIDATED ORDER TO AVOID THE CONFLICTING DECISION. ITA NO.418/M/2015 MUKESH CHOKSI 2 2. AT THE OUTSET OF PROCEEDINGS THE LD. AR OF THE ASSESSEE ARGUED THAT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE I N ALL 6 APPEALS ARE COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES O WN CASE IN ITA NO. 996/M/02015 AND IN CASE OF MIHIR AGENCIES PVT. LTD. , 695/M/2015. IT WAS FURTHER ARGUED THAT THE ASSESSEE FILED APPEA L BEFORE THE TRIBUNAL IN THE QUANTUM ASSESSMENT VIDES APPEAL(S) ITA NO. 833/M/2013 FOR AY 2004-5, ITA NO. 835/M/2013 FOR AY 2006-07, APPEAL ITANO. 836/M/2013 FOR THE AY 2007-08, APPEAL ITA NO. 837/M/2013 AY 2008-09, ITA NO. 838/M/2013 FOR AY 20 08-09 AND ITA NO. 839/M/2013 FOR AY 2010-11, WHEREIN THE ESTI MATION OF INCOME COMMISSION INCOME WAS RESTRICTED TO 0.15%. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE NOT DISPUTED THE F ACTUAL POSITION AND THE DECISION OF COORDINATE BENCH IN ASSESSEE OW N CASE IN QUANTUM ASSESSMENT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF PART IES AND PERUSED THE RECORDS OF THE APPEALS. WE HAVE SEEN THAT THE A SSESSEE CHALLENGED THE ADDITION IN QUANTUM ASSESSMENT BEFORE TRIBUNAL AND THE COORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 04 TH MAY 2016 IN ITA NO. 833/M/2013 FOR AY 2004-5, ITA NO. 835/M/201 3 FOR AY 2006-07, ITANO. 836/M/2013 FOR THE AY 2007-08,ITA N O. 837/M/2013 AY 2008-09, ITA NO. 838/M/2013 FOR AY 20 08-09 AND ITA NO. 839/M/2013 FOR AY 2010-11. THE FOLLOWING O RDER WERE PASSED AS UNDER: 2. AT THE OUTSET, THE ASSESSEE SUBMITTED THAT, S IMILAR ISSUE HAD ARISEN IN GROUP CONCERNS OF THE ASSESSEE BEFORE THE TRIBUNAL ITA NO.418/M/2015 MUKESH CHOKSI 3 WHEREIN THE RATE OF COMMISSION HAS BEEN ACCEPTED AT 0.15%. THE LIST OF SOME OF THE ITAT DECISIONS FILED BEFORE US ARE AS UNDER: (I) M/S. GOLDSTAR FINVEST P. LTD. ITAS 887 AND 269 9/M/2013, ORDER DATED 30.11.2015; (II) M/S. MIHIR AGENCIES PVT. LTD., IN ITAS 6435 TO 6441/M/2012 VIDE ORDER DATED 06.01.2016; AND (III) ALLIANCE INTERMEDIATERIES AND NETWORKS P LT D., IN ITAS 2700 TO 2702/M/2013 ORDER DATED 20.02.2016 3. LD. DR ALSO ADMITTED THAT, THE ISSUE OF RATE O F COMMISSION HAS BEEN DECIDED BY THE TRIBUNAL IN VARIOUS CASES. 4. BRIEF FACTS QUA THE ISSUE INVOLVED ARE THAT, A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) WAS CONDUCTED I N THE GROUP COMPANIES OWNED AND FLOATED BY ASSESSEE, SHRI MUKES H CHOKSI ON 25.11.2009. THE ASSESSEE WAS ALSO COVERED UNDER THE SAME SEARCH AND CONSEQUENTLY ASSESSMENTS UNDER SECTION 1 53A R.W.S. 143(3) WERE COMPLETED. THE AO IN THE ASSESSMENT OR DER HAS NOTED THAT, DURING THE COURSE OF THE SEARCH AND SEI ZURE ACTION, IT WAS FOUND THAT THE ASSESSEE AND THE GROUP COMPANIES OF THE ASSESSEE WERE ENGAGED IN THE BUSINESS OF ACCOMMODAT ION ENTRIES AND LAUNDERING OF BLACK MONEY. THE ASSESSE E HIMSELF WAS THE MASTERMIND BEHIND FORMATION OF ALL THESE CO MPANIES. VARIOUS OTHER DETAILS AND MODUS OPERANDI HAVE BEEN NOTED BY HIM ALONG WITH THE STATEMENT ON OATH OF THE ASSESSE E AND THE SEIZED DOCUMENTS. THUS, ON THE BASIS OF HIS DETAIL DISCUSSIONS AND MATERIAL ON RECORD, THE AO HELD THAT, THE ASSES SEE AND THE GROUP COMPANIES RUN BY HIM WERE RECEIVING COMMISSIO N INCOME FROM FOR ALL THESE ACTIVITIES. SUCH A COMMISSION I NCOME WAN RANGING BETWEEN 1.5% TO 3.5%. THE AO ACCORDINGLY R EJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED THE NET PROFIT RATE OF THE COMMISSION @ 2%, WHICH ACCORDING TO THE ASSE SSEE WAS 0.15%. BEFORE THE CIT (A), THE ASSESSEE FILED VARI OUS DECISIONS PASSED BY THE CIT (A) IN GROUP COMPANIES, WHEREIN, 0.15% OF THE COMMISSION RATE HAS BEEN ACCEPTED. HOWEVER, THE LD . CIT (A) DID NOT ACCEPT THE ASSESSEES CONTENTION AND CONFIRMED THE ESTIMATE MADE BY THE AO. 5. ON THE PERUSAL OF THE IMPUGNED ORDERS AND THE FINDING OF THE TRIBUNAL IN THE CASE OF M/S. MIHIR AGENCIES PVT . LTD., (SUPRA) AND ON SIMILAR OTHER DECISIONS AS RELIED BEFORE US, WE FIND THAT THE TRIBUNAL HAS UPHELD THE NET PROFIT RATE OF 0.15 %. THE RELEVANT ITA NO.418/M/2015 MUKESH CHOKSI 4 OBSERVATION OF THE TRIBUNAL IN THE CASE OF M/S. MIH IR AGENCIES PVT. LTD. IS REPRODUCED HEREUNDER:- 7. WE FIND THAT IN THE CASE OF GOLD STAR FINVEST LTD., WHICH IS A SISTER CONCERN OF THE ASSESSEE, ON SIMILAR FAC TS FOR THE ASSESSMENT YEAR 2003-04 AND 2004-05, THE TRIBUNAL A FTER REFERRING TO VARIOUS DECISIONS HAVE UPHELD THE PERC ENTAGE OF COMMISSION ON NET PROFIT @ 0.15% WHICH WAS QUITE CONSISTENT WITH THE STATEMENT RECORDED AT THE TIME OF SEARCH. ACCORDINGLY, FOLLOWING THE JUDICIAL PRECED ENCE IN THE CASE OF THE ASSESSEES SISTER CONCERN (SUPRA), WE UPHOLD THE RATE OF COMMISSION / RATE OF NET PROFIT FROM SUCH ACTIVITIES AT 0.15%. ACCORDINGLY, GROUND NO. 4, 5 AS RAISED BY THE ASSESSEE ARE ALLOWED. THUS, CONSISTENT WITH THE VIEW TAKEN IN VARIOUS S IMILAR MATTERS, WE ALSO UPHOLD THE RATE OF COMMISSION / NE T PROFIT RATE FROM SUCH ACTIVITY AT 0.15%. ACCORDINGLY, THIS ISS UE IS DECIDED IN FAVOR OF THE ASSESSEE. 6. SINCE NO ARGUMENTS HAVE BEEN PLACED ON OTHER G ROUNDS OF APPEAL, THE SAME ARE NOT BEING ADJUDICATED UPON. I N THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. IN ALL THE APPEALS, EXACTLY SIMILAR ISSUE ARE INVOLVED FOR OUR CONSIDERATION, OUR FINDING GIVEN ABOVE WILL APPLY M UTATIS MUTANDIS TO THE IMPUGNED APPEALS ALSO, THEREFORE, A LL THE APPEALS FILED BY THE ASSESSEE ARE TREATED AS PARTLY ALLOWED . 5. CONSIDERING THE FACT THAT COORDINATE BENCH OF T RIBUNAL FOR ESTIMATING THE INCOME OF THE ASSESSEE FOR THE YEARS UNDER CONSIDERATION. WE HOLD THAT CIT (A) WAS NOT JUSTIF IED IN CONFIRMING THE ORDER PENALTY LEVIED U/S. 271(1)(C) OF THE ACT, WHI CH WAS ALSO BASED ON THE ESTIMATE BASIS, THEREFORE, THE GROUNDS OF APPEA L RAISED BY ASSESSEE IN ALL THE 6 APPEALS ARE ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF MAY 2017. SD/- (P.K. BANSAL) SD/- (PAWAN SINGH) VICE PRESIDENT JUDICIALMEMBER MUMBAI; DATED : 30 /05/2017 ITA NO.418/M/2015 MUKESH CHOKSI 5 RAHUL DHOKE , P.S./ .. !'#'$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A)- , MUMBAI 5. #$% &' , &' ) , / DR, ITAT, MUMBAI 6. %*+ , / GUARD FILE. / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI