TALENT INFOWAY LTD, MUMBAI V. ACIT CEN CIR 46, MUMBAI

ITA 7427/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8726 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 24-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 17-12-2013
• Court: TRIBUNAL
• Department Lawyers: AMRITA RAJAN AW SHRI B S BIST
• Keywords: Bogus purchase; Unexplained cash credit; Business expenditure; Search and seizure; Accommodation entries
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHR I AMARJIT SINGH , JUDICIAL MEMBER ITA NO. 6384 / MUM./2012 ( ASSESSMENT YEAR : 20 0 5 06 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT ITA NO. 6385 / MUM./2012 ( ASSESSMENT YEAR : 20 06 07 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT 2 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED ITA NO. 6386 / MUM./2012 ( ASSESSMENT YEAR : 20 07 08 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT ITA NO. 6387 / MUM./2012 ( ASSESSMENT YEAR : 20 08 09 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT ITA NO. 6388 / MUM./2012 ( ASSESSMENT YEAR : 20 09 10 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT 3 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED ITA NO. 6389 / MUM./2012 ( ASSESSMENT YEAR : 20 10 11 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT ITA NO. 7427 / MUM./2013 ( ASSESSMENT YEAR : 20 05 06 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT ITA NO. 7428 / MUM./2013 ( ASSESSMENT YEAR : 20 06 07 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT 4 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED ITA NO. 7429 / MUM./2013 ( ASSESSMENT YEAR : 20 07 08 ) M/S. TALENT INFO WAY LIMITED BLOCK H, SHRI SADASHIV CHS LTD. 6 TH ROAD, SANTACRUZ (E) MUMBAI 400 055 PAN AACCT9444L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 46, AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 . RESPONDENT ASSESSEE BY : SHRI MUKESH CHOKSI REVENUE BY : MS. AMRITA RAJAN A/W SHRI B.S. BIST DATE OF HEARING 29 . 1 2 .2016 DATE OF ORDER 24.01.2017 O R D E R PER BENCH: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE IMPUGNED SEPARATE ORDERS PASSED OF THE LEARNED COMMISSIONER (APPEALS) , MUMBAI, FOR THE ASSESSMENT YEAR 2005 06, 2006 07, 2007 08, 2008 09, 2009 10, 2010 11, 2005 06, 2006 07 AND 2007 08, IN THE MATTER OF ORDERS PASSED UNDER SECTION 153C R/W SECTION 143(3) AND UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'T HE ACT' ) . 5 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED 2. THE COMMON GRIEVANCE OF THE ASSESSEE IN ALL THE YEARS UNDER CONSIDERATION PERTAINS TO APPLICATION OF NET PROFIT RATE OF 2% ON THE INCOME ON ENTIRE BANK DEPOSIT MANAGED BY THE AGENTS AS AGAINST PROFIT RATE OF 0.03% OFFERED BY THE ASSESSEE. 3. BRIEF FACTS ARE, A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT, WAS CONDUCTED IN THE CASE OF M/S. MAHASAGAR SECURITIES PVT. LTD. (NOW KNOWN AS M/S. ALAG SECURITIES PVT. LTD.), M/S. MIHIR AGENCIES PVT. LTD., M/.S ALLIANCE INTERMEDIARIES & NETW ORK PVT. LTD. AND ITS OTHER GROUP COMPANIES ALONG WITH THE RESIDENTIAL PREMISES OF SHRI MUKESH MANEKLAL CHOKSI, SHRI JAYESH KRISHNARAJ SAMPAT AND SHRI SITARAM MAHABELESHWAR BHAT, THE DIRECTORS AND AUDITOR OF THE MAHASAGAR GROUP OF COMPANIES ON 25 TH NOVEMBE R 2009. THE ASSESSEES CASE WAS ALSO COVERED UNDER SECTION 153C OF THE ACT. IT IS STATED IN THE ASSESSMENT ORDERS THAT IT WAS FOUND DIRING THE COURSE OF SEARCH AND SEIZURE ACTION THAT THE ASSESSEE GROUP COMPANIES WERE PURELY IN THE BUSINESS OF LAUNDERING B LACK MONEY INTO WHITE BY PROVIDING BOGUS SHARE TRADING ENTIRES AND SHRI MUKESH CHOKSI IS THE MASTERMIND BEHIND THE FORMATION OF ALL THESE COMPANIES. IT IS FURTHER STATED THAT DURING THE COURSE OF SEARCH PROCEEDINGS, MORE THAN 300 BANK ACCOUNTS WERE PROCURE D AND THE TOTAL OF THE CREDITS BETWEEN FINANCIAL YEAR 2002 03 TO 2009 10 COMES ` 2,600 CRORE APPROXIMATELY WHICH INCLUDES BOTH CASH, CREDITS AND CLEARING / TRANSFER ENTITIES, 6 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED RTGS, ETC. THE ASSESSING OFFICER HAS BROUGHT ON RECORD THE MODUS OPERANDI BEING F OLLOWED BY THE COMPANIES CONTROLLED BY SHRI MUKESH CHOKSI, VARIOUS TYPES OF ACCOMMODATION ENTRIES BEING PROVIDED BY THE GROUP CONFIRMED BOTH BY SHRI MUKESH CHOKSI AND BY HIS LONG TIME EMPLOYEES. IN VIEW OF THE ABOVE DISCUSSION, THE ASSESSING OFFICER ESTIMA TED COMMISSION INCOME @ 2% IN PLACE OF COMMISSION INCOME OFFERED BY THE ASSESSEE AT 0.03%. 4. BY THE IMPUGNED ORDER, THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. LEARNED AUTHORI SED REPRESENTATIVE PLACED ON RECORD, COPY OF THE TRIBUNAL ORDERS PASSED IN CASE OF OTHER GROUP CONCERNS, DETAILS OF WHICH ARE AS UNDER: I) DCIT V/S M/S. GOLDSTAR FINVEST PVT. LTD., ITA NO.887/ MUM./ 2012, ETC., ORDER DATED 30.11.2015; II) M/S. MIHIR AGENCIES PVT. LTD. V/S DCIT, ITA NO.6435/MUM./ 2012, ETC., ORDER DATED 6.1.2016; III) ALLIANCE INTERMEDIATERIES AND NETWORK PVT. LTD. V/S ACIT, ITA NO. 2700/MUM./2013, ETC., ORDER DATED 24.2.2016; IV) SHRI MUKESH M. CHOKSI V/S DCIT, ITA NO.833/MUM./2013, ETC., ORDER DATED 4.5.2016; V) M/S. PRABHA MULTITRADE PVT. LTD. V/S DCIT, ITA NO.326/ MUM./2013, ORDER DATED 17.8.2016; AND VI) DCIT V/S ALAG SECURITIES P. LTD., ITA NO.886/MUM./2012, ORDER DATED 8.9.2016. 7 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED 6. WE HAVE CAREFULLY GONE THROUGH THE ABOVE ORDERS OF THE TRIBUNAL, WHEREIN , COMMISSION INCOME WAS ACCEPTED BY THE TRIBUNAL @ 0.15%. 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE INVITED OUR ATTENTION TO THE FINDINGS RECORDED BY THE LEARNED CIT(A) TO THE EFFECT THAT THE COMMISSION RATE OF 2% WAS ARRIVED AT AFTER CO NSIDERING THE INCRIMINATING DOCUMENTS FOUND DURING THE SEARCH AND THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. OUR ATTENTION WAS ALSO INVITED TO THE FACT THAT THE LEARNED CIT(A) HAS ALREADY CONSIDERED THE DECISION OF THE TRIBUNAL REFERRED TO BY THE ASSESSEE IN SUPPORT OF THE PROPOSITION THAT THE COMMISSION RATE SHOULD BE DETERMINED AT 0.15%. WE HAVE ALSO GONE THROUGH THE ORDER OF THE LEARNED CIT(A) WHEREIN , THE LEARNED CIT(A) , VIDE HIS ORDER DATED 31 ST AUGUST 2012, OBSERVED AS UNDER: 15.3 THE MAIN CONTENTION OF THE APPELLANT IS THAT THE GROSS INCOME FROM THE TOTAL RECEIPTS OF PROVIDING ACCOMMODATION ENTRIES HAS TO BE DETERMINED AT 0.15%, AS HELD IN ITS OWN GROUP OF CASES, BY THE HON' B LE ITAT, MUMBAI BENCH. FURTHER, APPELLANT HAS ALSO CITED THE APPELLATE ORDER PASSED BY THE LD. CIT(A) - 37, MUMBAI IN RESPECT OF THE SEARCH ASSESSMENTS COMPLETED U/S. 1 53C OF THE ACT FOR THE A.YRS.2002 - 03 TO 2007 - 08 CONSEQUENT TO THE SEARCH & SEIZURE ACTION CARRIED OUT ON 28.06.2006. THE FACTUAL MATRIX, THE ISSUES EXA MINED AND THE RATIO OF THE DECISIONS APPLIED BY THE HON'BLE APPELLATE TRIBUNAL ARE CAREFULLY CONSIDERED. IN THE ORDERS PASSED BY THE HON'BLE APPELLATE TRIBUNAL, MUMBAI BENCH IN SIMILAR CASES AS WELL AS IN APPELLANT'S OWN GROUP OF CASES, THERE WERE NO MATER IALS FOUND AND SEIZED DURING THE SEARCH & SEIZURE PROCEEDINGS WHICH CLEARLY INDICATED THE NATURE OF TRANSACTIONS AND THE QUANTUM OF COMMISSION / PROFITS EARNED BY THE APPELLANTS. THEREFORE, IN CASES WHERE THERE WERE NO SPECIFIC MATERIALS THAT WERE UNEARTHE D DURING 8 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED THE SEARCH & SEIZURE PROCEEDINGS, HON'BLE ITAT, MUMBAI BENCH HAS DETERMINED THE COMMISSION / PROFITS @ 0.15%. THE LD. C I T(A) - 37, MUMBAI HAS FOLLOWED THE SAID RATIO OF THE DECISIONS, HAVING REGARD TO THE FACT THAT NO SPECIFIC M ATERIALS WERE RELIED UPON BY THE A.O IN RESPECT OF THE EARLIER SEARCH ASSESSMENTS C OMPLETED U/S.153C OF THE ACT. IN THE LIGHT OF THESE FACTS, THE RATE OF PROFIT / C OM M ISSION DETERMINED BY THE HON'BLE ITAT, MUMBAI IS NOT APPLICABLE TO THESE APPEALS . 15.4 IN THE FOREGOING PARAGRAPHS, THE ENTIRE FACTUAL MATRIX, THE SEIZED MATERIALS AND THE SWORN DEPOSITIONS OF THE DIRECTOR OF THE APPELLANT COMPANY AND OTHER WITNESSES ARE ELABORATELY BROUGHT OUT. IT IS EVIDENT FROM THE MATERIALS BROUGHT ON RECORD THAT COMMISSION / PROFIT ON THE TRANSACTIONS CARRIED OUT BY THE APPELLANT COMPANY VARIED FROM 1 . 5% TO 3.6%. SINCE THE SEIZED MATERIALS AND THE SWORN STATEMENTS CLEARLY ESTABLISHED THAT THE ENTRIES IN THE BOOKS OF ACCOUNTS ARE NOT SUPPORTED BY ANY RELIABLE PRIMARY RECORDS ; THE APPELLANT HAD INDULGED IN LARGE SCALE CASH TRANSACTIONS AND THE CHEQUES TRANSACTED WERE ESSENTIALLY MEANT TO CREATE A SMOKE SCREEN TO CAMOUFLAGE THE TRUE NATURE OF TRANSACTIONS W HICH ARE BOGUS PURCHASES TRANSACTIONS, THE BOOKS OF ACCOUNTS MAINTAINED AND THE PROFITS DECLARED AS PER THE BOOKS OF ACCOUNTS COULD NOT BE RELIED UPON BY THE A.O FOR DETERMINING THE TRUE INCOMES OF THE APPELLANT. HAVING REGARD TO THESE FACTS AND CIRCUMSTAN CES OF THE CASE, IT IS HEREBY HELD THAT A.O IS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS U/S.145(2) OF THE ACT AND ESTIMATING THE INCOME ON THE BASIS OF THE SEIZED MATERIALS AND THE SWORN STATEMENTS. AS ALREADY TAKEN INTO CONSIDERATION, IT IS EVIDENT FR OM THE MATERIALS BROUGHT ON RECORD THAT COMMISSION / PROFIT ON THE TRANSACTIONS CARRIED OUT BY THE APPELLANT COMPANY VARIED FROM 1.5% TO 3.6%. HAVING REGARD TO THE VOLUME OF TRANSACTIONS AND CERTAIN INCIDENTAL EXPENSES IN RUNNING SUCH A BUSINESS OF SUPPORT ING PARALLEL ECONOMY, A.O HAS COME TO A REASONABLE CONCLUSION BY ARRIVING AT THE COMMISSION / PROFIT 2% OF THE TOTAL RECEIPTS. THE OTHER EARNING THE INCOMES BY PROVIDING ACCOMMODATION ENTRIES IS CONCERNED, IT IS HEREBY HELD THAT THE RATE OF COMMISSION / N ET PROFIT DETERMINED @ 2% IN THE ASSESSMENT ORDERS HAS TAKEN INTO ACCOUNT THE ALLEGED EXPENSES. THEREFORE, THERE IS NO JUSTIFICATION FOR ALLOWING FURTHER EXPENSES AGAINST THE NET INCOME DETERMINED @ 2% OF THE TOTAL RECEIPTS. ACCORDINGLY, THE INCOME ASSESSE D ARE HEREBY CONFIRMED. 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAD ALSO GONE THROUGH THE CONTENTION OF THE APPELLANT THAT A.O HAS NOT ALLOWED DEDUCTION FOR EXPENSES IN 9 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED ORDER OF THE TRIBUNAL AS REFERRED BY THE ASSESSEE AND STATED BY US IN PARA 5, WHEREIN UNDER SIMIL AR FACTS AND CIRCUMSTANCES, THE TRIBUNAL HAVE HELD THAT 0.15% NET PROFIT WILL BE REASONABLE. THE SEARCH IN THIS CASE WAS ON THE VERY SAME DAY WHEN THE SEARCH IN THESE OTHER GROUP CONCERNS WERE CARRIED OUT, WHEREIN MATTER TRAVELLED UP TO THE TRIBUNAL AND TR IBUNAL HAVE UNANIMOUSLY TAKEN A VIEW THAT 0.15% NET PROFIT ON THE BANK DEPOSIT WILL BE REASONABLE. LEARNED DR COULD NOT BRING ON RECORD ANY DISTINGUISHED FACTS. 9. THE PRECISE OBSERVATION OF TRIBUNAL IN THE CASE OF GOLDSTAR FINVEST PRIVATE LIMITED DATED 01 /06/2016 IN ITA NO.6114 - 6120/M/2012 WAS AS UNDER: - 4. IN ALL THESE CASES OF THE GROUP CONCERNS OF SRI MUKESH CHOWKSI INCLUDING ASSESSEE, THE ASSESSMENTS HAVE BEEN MADE IN THE WAKE OF SEARCH AND SEIZURE ACTION UNDER SECTION 132( 1) DATED 25.11.2009 CARRIED OUT IN THE CASES OF M/S MAHAVIR SECURITIES PRIVATE LIMITED; M/S MIHIR AGENCIES P. LTD; M/S ALLIANCE INTERMEDIARIES AND NETWORK P LTD AND OTHER GROUP COMPANIES INCLUDING ASSESSEE WHICH WAS MANAGED BY SHRI MUKESH CHOKSI GROUP AND ACCOMMODATION ENTRIES. THE THAT THE COMMISSION/NET THAT, IN THE VARIOUS TRIBUNAL ORDERS, WHICH HAVE BEEN REFERRED TO ABOVE AS WELL AS IN THE CASE OF THE AS SESSEE ITSELF, THE NET PROFIT RATE OF 0.15% HAVE BEEN ACCEPTED. NOT ONLY THAT 50% OF THE EXPENSES CLAIMED HAVE ALSO ACCEPTED, IN OTHER WORDS, ONLY BALANCE CLAIM OF EXPENDITURE OF 50% HAVE BEEN CONFIRMED. THE RELEVANT OBSERVATION OF THE TRIBUNAL IN THE CASE OF M/S MIHIR AGENCIES PVT. LTD READS AS UNDER: - '6. AFTER CONSIDERING THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS AS WELL AS SUBMISSION MADE BY THE PARTIES, WE FIND THAT THE ASSESSEE IS ONE OF THE GROUP CONCERNS OF MUKESH CHOKSHI GROUP. A SEARCH A ND SEIZURE ACTION U/ S 132(1) WAS CONDUCTED IN THE CASE OF THE ASSESSEE ALONG WITH THE OTHER GROUP COMPANIES ON 25.11.2009 AND ON SUBSEQUENT 10 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED DATES, WHEREIN IT WAS FOUND THAT ALL THESE GROUP COMPANIES BELONGING TO SHRI MUKESH CHOKSHI AND HIS FAMILY MEMBERS WERE INVOLVED IN ACCOMMODATION ENTRIES F OR VARIOUS KINDS O F ACTIVITIES, HAS APPLIED A COMMISSION INCOME @ 2%. BEFORE THE CIT(A), VARIOUS APPELLATE ORDERS WERE RELIED UPON WHICH HAS BEEN NOTED BY THE CIT(A) IN THE IMPUGNED ORDER AT PARA 2.1 . THE LD. CIT(A) AFTER REFERRING TO THE VARIOUS MATERIAL F OUND AT THE TIME O F SEARCH OF SH R I MUKESH CHOKSHI AND HIS EMPLOYEES AND THE STATEMENTS WHEREIN VARIOUS RATES OF COMMISSION CHARGED HAVE BEEN STATED RANGING FROM 0.15% TO 2% ON DIFFERENT KIND OF ACCOMMODATION ENTRIES . ACCORDINGLY, LD. CIT(A) UPDATED THE APPLICATION OF NET PROFIT RATE OF 2% AS APPLIED BY THE A O . 7. WE FIND THAT IN THE CASE OF GOLD STAR FINVEST LID, WHICH IS A SISTER CONCERN OF THE ASSESSEE, ON SIMILAR FACTS FOR THE ASSESSMENT YEAR 2003 - 04 AND 2004 - 05, 'THE TRIBUNAL AFTER REFERRING TO VARIOUS DECISIONS HAVE UPHELD THE PERCENTAGE OF COMMISSION ON NET PROFIT @ 0.15% WHICH WAS QUITE CONSISTENT WITH THE STATEMENT RECORDED AT THE TIME OF SEARCH. ACCORDINGLY, FOLLOWING THE JUDICIAL PRECEDENCE IN THE CASE OF THE ASSESSEE'S SISTER CONCERN [SUPRA]. W E 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. 8 . AS REGARDS THE DISALLOWANCE OF BUSINESS EXPENSES' THE LD. CIT(A) HAS DIRECTED THE AO NOT TO ALLOW ANY E XPENSES AGAINST THE NET INCOME OF 2% DETERMINED. WE FIND THAT THE TRIBUNAL IN THE CASE OF GOLD STAR FINVEST LTD HAVE DISALLOWED ONLY 50% OF THE BUSINESS EXPENSES. ACCORDINGLY, FOLLOWING THE JUDICIAL PRECEDENCE, WHICH IS APPLICABLE MUTATIS MUTANDIS IN THE CASE OF THE ASSESSEE ALSO, WE DIRECT THE AO TO ALLOW THE BUSINESS EXPENSES TO THE EXTENT OF 50%. ACCORDINGLY, GROUND NO.8 IS TREATED AS PARTLY ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED' IN ASSESSEES OWN CASE ALSO, THIS ISSUE HAS BEEN DECIDED IN THE FOLLOWING MANNER: - '4. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER OF A O . NOTHING HAS BEEN BROUGHT ON RECORD BY HIM TO DISTINGUISH THE ORDERS RELIED UPON BY THE L D. COUNSEL. 5. WE HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES AND TILE ORDERS OF THE CO - ORDINATE BENCH OF TRIBUNAL IN ASSESSEE'S 11 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED OWN CASE AND OTHER ORDERS RELIED UPON BY THE ASSESSEE. IT IS NOTED BY US THAT IDENTICAL ISSUE HAD CAME UP BEFORE THE TRIBUNAL IN ASSESS EE'S OWN. CASE [OR THE ASSESSMEN T YEAR 2002 - 0 3. THE RELEVANT OBSERVATIONS F ROM THE TRIBUNAL'S ORDER WER E RE PRODUCED BELOW: '12. HAVING, CAREFULLY EXAMINED THE VARIOUS ORDERS IN THE CASE OF DIF FERENT A SSESSEE S : IT HAS BECOME AMPLY CLEAR THAT IN T HESE TYPES O F ACTIVITIES, BROKERS ORE ONLY CONCERNED WITH THEIR COMMISSION ON THE VALUE OF TRANSACTIONS. NOW THE QUESTION COMES WHAT WOULD BE THE REASONABLE PERCENTA GE TO THE COMMISSION ON THE TOTAL TURNOVER? THE ASSESSEE HA S ALSO MADE OUT A CASE THAT THE CUSTOMERS DO NOT COME DIREC TLY TO HIM AND THEY COME THROUGH A SUB - BROKER WHO ALSO CHARG ES A PARTICULAR SHARE OF COMMISSION. IN ALL THE JUDGMENTS HAS BEEN STATED IS THAT AN AVERAGE PERCENTAGE OF COMMIS SION T URNOVER . 0.15% TO 0.25%. IN THE CASE OF PALRESHA & C O., AND KIRA N & CO (SUR PA), THE TRIBUNAL HAS CONSIDERED REASONABLENESS OF PERCENT AGE OF COMMISSION TO BE EARNED ON TURNOVER WAS AT 0.1 %. THE ASSESSEE HIMSELF HAS OFFERED THE PERCENTAGE OF COMMISSION AT 0 .15%, WHICH IS MORE THAN THE PERCENTAGE OF COMMISS ION CONSIDERED TO BE REASONABLE BY THE TRIBUNAL IN THE CASE OF PALRESHA & CO AND KIRAN & CO (SUPRA) IN SIMILAR TYPE OF TRANSACTIONS. THE THEORY OF ASSESSING OFFICER TO TREAT THE ENTIRE DEPOSIT AS UNEXPLAINED CASH CREDITS, CANNOT BE ACCEPTED IN THE LIGHT OF ASSESSMENT ORDERS IN THE CASE OF BENEFICIARIES AND ALSO IN THE LIGHT OF THE FACT THAT ASSESSEE IS ONLY CONCERNED WITH THE COMMISSION EARNED ON PROVIDING ACCOMMODATION ENTRIES. WE, THEREFORE, OF THE VIEW THAT SINCE THE ASSESSEE ITSELF HAS DECLARED THE COMMI SSION ON TURNOVER AT 0.15% WHICH IS MORE THAN T H E PERCENTAGE CONSIDERED TO B E REASONABLE BY THE TRIBUNAL IN T HE CASE OF PALRESHA & C O AND KIRAN & CO (SUPRA), THE SAM E SHOULD BE ACCEPTED. WE, ACCORDINGLY, ACCEPT THE COMMISSION DECLARED BY THE ASSESSEE AND SET ASIDE THE ORDER OF THE CI T (A) IN THIS RE G ARD .' 6. IT IS FURTHER NOTICE D BY US THAT THIS STAND HAS BEEN CONSTANTLY ACCEPTED BY THE TRIBUNAL IN VARIOUS ORDERS, DETAILS OF WHICH HAVE BEEN GIVEN BY THE LD. COUNSEL, AS MENTIONED ABOVE. WE HAVE GONE THROUGH THE ORDERS AS ENCLOSED IN THE PAPER BOOK FILED BY THE ASSESSEE AND FIND THAT THE LD. AR HAS CORRECTLY STATED THAT THIS ISSUE HAS BEEN UNANIMOUSLY ACCEPTED BY THE TRIBUNAL IN VARIOUS CASES INCLUDING THE CASE OF ASSESSEE. NOTHING HAS BEEN BROUGHT ON RECORD BY THE ID. DR TO DISTINGUISH THESE CASES. THEREFORE, RESPECTFULLY FOLLOWING THE 12 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED ORDERS OF THE TRIBUNAL INCLUDING THE ORDER OF TRIBUNAL IN ASSESSEE'S OWN CASE IN THE IMMEDIATELY PRECEDING YEAR, WE FIND. THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADD ITION, NO INTERFERENCE IS CALLE D FOR IN THE ORDER OF ID. CIT(A) , THEREFORE, THE 'SAME IS UPHELD. GROUNDS NO.1 AND 2 TAKEN BY THE REVENUE STAND DISMISSED'. THUS, FOLLOWING THE JUDICIAL PRECEDENCE IN CASES OF VARIOUS GROUPS CONCERNS AS WELL AS THAT OF ASSES SEE DECIDED BY THE TRIBUNAL, WE HOLD THAT NET PROFIT RATE /COM MI SSION SHOULD BE TAKEN AT 0.15% AND THE EXPENDITURE CLAIMED SHOULD BE ALLOWED TO THE EXTENT OF 59% FROM SUCH INCOME. ACCORDINGLY, THESE TWO ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE. AS REGA RDS THE OTHER GRO UNDS TAKEN, THE SAME HAVE NOT BEEN ARGUED BEFORE US ON THE GROUND THAT THEY WILL BECOME PURELY ACADEMIC. . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS TREATED AS STATED IN THE OPERATING PART OF THE ORDER THAT SIMILAR ISSUES ARE INVOLVED IN ALL THE APPEALS, THEREFORE, THIS FINDING WILL APPLY MUTATIS MUTANDIS IN ALL THE IMPUGNED YEARS. THUS, ALL THE APPEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED. 4. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE STANDS ALLOWED. 10. RESPECTFULLY FOLLOW ING THE CONSISTENT VIEW TAKEN BY THE TRIBUNAL, WE DIRECT THE AO TO APPLY 0.15% NET PROFIT RATE ON THE BANK DEPOSITS TO ARRIVE AT THE NET PROFIT OF THE ASSESSEE. IN THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) U/S.271(1)(C), THE LEARNED AR PLACED ON RECORD NUMBER OF ORDER OF TRIBUNAL IN GROUP CONCERNS, WHEREIN SIMILAR PENALTY WAS DELETED BY THE TRIBUNAL. 11. MIHIR AGENCIES PVT LTD (APPEAL NO. 695/MUM/2015, A.Y. 200 4 - 05) MUKESH M CHOKSI (APPEAL NO. 996/MUM/2015; A.Y. 2005 - 06, WHEREIN T HE HONOURABLE TRIBUNAL HAS DECIDED WHEN THERE ARE TWO VIEWS 13 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED POSSIBLE THE PROVISION OF PENALTY U/S. 271(1) (C) ARE NOT ATTRACTED AND ASSESSEE'S APPEAL ARE DECIDED IN FAVOUR OF THE ASSESSEE AND PENALTY HAS BEEN DROPPED . 12. IN THE CASE OF ALPHA CHEMIE TRADE AGENCIES PVT LTD APPEAL NO. 6 98/M/15 FOR A.Y. 2004 - 05 & 709/M/15 FOR A.Y. 2008 - 09, THE HONOURABLE ITAT, 'J' BENCH DECIDED AS UNDER 'WE DELETE THE PENALTY LEVIED UNDER SECTION 271(L)(C) IN THE THESE CASES AS THE COMMISSION INCOME ASSESSABLE IN THE HANDS OF THE ASSESSEE HAS BEEN ON ESTIMATE BASIS, NO PENALTY IS ATTRACTED ON THE ADDITIONS/DISALLOWANCE MADE ON ESTIMATE BASIS. 13. SAME FACTS AND CIRCUMSTANCES HAS BEEN HEARD AND DECIDED BY I TAT 'SMC ' BENCH IN THE CASE OF M/S. MIHIR AGENCIES PVT LTD VIDE APPEAL N O. 7533/MUM/2015 FOR ASSESSMENT YEAR 2005 - 06 AND APPEAL NO. 7535/M/2015 FOR ASSESSMENT YEAR 2007 - 08. THE APPEAL DECIDED IN FAVOUR OF THE ASSESSEE AND PENALTY HAS BEEN DROPPED. 14. THERE ARE SIX APPEALS HEARD AND DECIDED IN THE FAVOUR IN ASSESSEE IN THE CA SE OF GO LDSTAR FINVE S T PVT LTD. THE FACTS AND CIRCUMSTANCES ARE SAME AND HEARD ON 24/08/2016 VIDE APPEAL NO. 7564 - 7570/MUM/2014 FOR A.Y. 2004 - 05 TO 2009 - 10, ALL SIX APPEALS ARE DECIDED IN THE FAVOUR OF ASSESSEE AND PENALTY HAS BEEN DROPPED . 15. IN THE INST ANT CASE ALSO INCOME HAS BEEN ASSESSED ON ESTIMATED BASIS MERELY BECAUSE A HIGH PERCENTAGE OF INCOME WAS ASSESSED , THE 14 ITA NO.6384/MUM/2012 AND 8 OTHER APPELS M/S. TALENT INFO WAY LIMITED LEVY OF PENALTY IS NOT AUTOMATIC AS HELD IN THE CASE OF AERO TRADERS PVT. LTD., 322 ITR 316. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL IN THE GROUP CONCERNS, WE DELETE THE PENALTY SO IMPOSED. 16. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 24 / 01 /2017 SD/ - SD/ - SD SD/ - AMARJIT SINGH JUDICIAL MEMBER SD/ - R.C. SHARMA ACCOUNTANT MEMBER MUMBAI, DATED: 24 / 01 / 2017 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 KARUNA SR. PS (DY./ASSTT. REGISTRAR) ITAT, MUMBAI