ITO 17(1)(3), MUMBAI V. SMT.CHARULATA NIKESH DOSHI, MUMBAI

ITA 5134/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9654 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Keywords: Accommodation entries; Set aside
• Section: 201

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH (JM) & SHRI SHAMIM YAHYA ( A M) I.T.A. NO. 5134 /MUM/ 201 8 (ASSESSMENT YEAR 20 09 - 10 ) ITO - 17(1)(3) ROOM NO. 116 1 ST FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. V S . SMT. CHARULATA NIKESH DOSHI 501, SHARDA CHAMBERS NO. 2 27A, KESHAVJI NAIK ROAD MUMBAI - 400 009. PAN : AMRPD7112K ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI AKHTAR H. ANSARI DATE OF HEARING 19.9. 201 9 DATE OF PRONOUNCEMENT 3 . 1 2 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : - THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 26.3.2015 AND PERTAINS TO A.Y. 2009 - 10. 2. THE GROUNDS OF APPEAL READ AS UNDER : 1. 'ON THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN REDUCING THE PERCENTAGE OF COMMISSION ON SALE BILLS AT 0.6% AS AGAINST 1% ADOPTED BY THE A.O. IN RESPECT OF BOGUS SALES.' 2. 'THE APPELLANT PRAYS THAT THE ORDER OF THE A.O. SHOULD BE RESTORED AND ORDER OF T HE CIT(A) SHOULD BE SET ASIDE.' 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS FOUND BY THE INVESTIGATION WING TO BE ENGAGED IN BOGUS ACCOMMODATION ENTRIES FOR PURCHASE AND SALE. IT WAS FOUND BY THE ASSESSING OFFICER THAT IT IS FOUND THAT IN THE TRAD ING ACCOUNT OF THE ASSESSEE, SALES ARE SHOWN AT RS.2,85,89,889 AND CLOSING STOCK AT RS.8,87,523/ - AND THE CORRESPONDING PURCHASES AT RS.3,71,45,591/ - . TH AT TH E INDIRECT EXPENDITURE DEBITED IN P& L ACCOUNT IS RS.1,39,042/ - . THAT H OWEVER, IN THE REVISED FINA NCIAL STATEMENT THE SALES ARE SMT. CHARULATA NIKESH DOSHI 2 RS.2,37,77,968/ - AND CORRESPONDING PURCHASES ARE RS.2,34,62,039/ - AND INDIRECT EXPENDITURE AT RS.1,39,042/ - . THAT T HE ASSESSEE HAS REDUCED THE AMOUNT OF PURCHASES AND NOT SHOWN CLOSING STOCK IN THE REVISED STATEMENT. IN THE AU DITED BOOKS, THE ASSESSEE HAD INFLATED ITS PURCHASES BY RS.1,36,83,552/ - AND SALES BY RS.48,12,030/ - (RS.2,85,89,998 - RS.2,37,77,968 ) AND IN THE AUDITED B ALANCE - SHEET SUNDRY CREDITORS OF RS.1,38,20,388/ - INCLUDED THE NAME OF M/S.N.B.ENTERPRISES FOR RS.1,07,6 8,673/ - WHERE AS SUNDRY DEBTORS OF RS.51,41,236/ - , NO DEBT IS SHOWN I N THE NAME OF N.B.ENTERPRISES. THAT T HUS, IT CAN BE SEEN FROM THE ABOVE THAT THE ASSESSEE HERSELF HAS ADMITTED ABOUT VARIATION BETWEEN ORIGINAL BOOKS OF ACCOUNTS AND THE REVISED BOOKS. TH AT TH E REVISED FINANCIALS ARE CONTRADICTORY TO IT S OWN AUDITED REPORT. HENCE, ASSESSEES BOOKS WERE REJECTED. 4. HENCE, ASSESSING OFFICE R OBSERVED THAT A S PER REPORTS OF INVESTIGATION WING IN VARIOUS CASES INVOLVING BUSINESS OF ISSUING OF BOGUS BILLS AND ACCOMMODATION ENTRIES, COMMISSIONS RANGING FROM 0.5% TO 3% OF THE BILL AMOUNTS ISSUED ARE PAID TO THE BOGUS BILLERS/ACCOMMODATION ENTRY GIVERS. THE ASSESSING OFFICER PROCEEDED TO ESTIMATE 1% COMMISSION ON SALES AND PURCHASES AND ADDED RS. 6,57,360/ - TO AS SESSEE INCOME. 5 . UPON ASSESSEES APPEAL LEARNED CIT(A) REDUCED THE ESTIMATE TO 0.6% AS UNDER : I HAVE CONSIDERED THE FACTS OF THE CASE AND ASSESSEE'S SUBMISSIONS. ON PERUSAL OF THE SUBMISSIONS OF THE ASSESSEE, IT IS FOUND THAT THE THE ASSESSEE GETS COMM ISSION CADAT) ONLY WHEN THE TRANSACTION OF PURCHASE FROM SUPPLIER SAND SALES TO CUSTOMER IS COMPLETED. THE ASSESSEE IS REPRESENTING ONE SIDE EITHER PURCHASER AND SELLER AND THE OTHER SIDE IS REPRESENTED BY BROKER TAKING BROKERAGE FROM HIS PARTY. THE ASSESS EE IS MERELY A MIDDLEMAN AND NOT A HOUSEBROKER TAKING COMMISSION FROM BOTH THE PARTIES PURCHASER AS WELL AS SELLER, ESTIMATION OF COMMISSION MERELY ON PRESUMPTION ON THE PART OF THE AO IS NOT A GOOD PRACTICE. FURTHER, THE ASSESSEE HAS DRAWN ATTENTION TO HE R HUSBAND, MR.NIKESH DOSHI'S CASE, WHEREIN SIMILAR FACTS WERE DEALT BY THE C1T(A) - 28 AND THE NET PROFIT WAS ESTIMATED AT 0.6% OF THE TURNOVER AND THE COMMISSION WAS DIRECTED TO BE TAKEN AT 0.6%. IN VIEW OF THE ABOVE, I AGREE WITH THE ASSESSEE THAT 1% COMMI SSION MADE BY THE AO IS EXCESSIVE AND THE SAME IS DIRECTED TO BE TAKEN AT 0.6% AS THE ASSESSEE HAS OFFERED NET PROFIT AT 0.6% OF THE TURNVOER. THUS, THE ASSESSEE GETS PARTIAL RELIEF . SMT. CHARULATA NIKESH DOSHI 3 6 . AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BEFORE US. WE HAVE HEAR D LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. WE ARE OF THE OPINION THAT LEARNED CIT(A) IS CORRECT IN MAKING AN ESTIMATE OF 0.6% AS THE COMMISSION VALUE. THE ASSESSING OFFICER HIMSELF HAS OBSERVED THAT ADDITION IN SUCH CASE RANGING FROM 0 . 5% TO 0 .3%. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). H ENCE, WE UPHOLD THE SAME. 7 . IN THE RESULT, REVENUE APPEAL STANDS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 3 . 1 2 . 201 9 . SD/ - SD/ - ( MAHAVIR SINGH ) (SH A M IM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 3 / 1 2 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, I TAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI