Shri Girdhari Lal Goenka , Kolkata V. DCIT, Central Circle - 4(3), Kolkata , Kolkata

ITSSA 71/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2736 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 19-12-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 03-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Question of law; Accommodation entries
• Section: 43; 13; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI S. S. GODARA, JM & DR. A.L. SAINI, AM ITA NOS.70,71&72/KOL/2018 (ASSESSMENT YEARS: 2012-13,2013-14 & 2015-16) SHRI GIRDHARI LAL GOENKA 3 RD FLOOR, 18, BRITISH INDIA STREET, ESPLANADE, KOLKATA 700069. VS. DCIT, CENTRAL CIRCLE-4(3), KOLKATA ./ ./PAN/GIR NO. : ADZPG1962B ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY : SHRI MIRAJ D SHAH, AR RESPONDENT BY : SHRI RADHEY SHYAM, CIT / DATE OF HEARING : 19/12/2019 /DATE OF PRONOUNCEMENT : 16/03/2020 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED THREE APPEALS FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEARS 2012-13, 2013-14 & 2015-16 ARE DIRECTED AGAINST THE SEPARATE ORDERS PASSED BY COMMISSIONER OF INCOME TAX (APPEALS), KOLKATA, WHICH IN TURN ARISE OUT OF SEPARATE ASSESSMENT ORDERS PASSED BY ASSESSING OFFICER U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. SINCE THESE THREE APPEALS RELATE TO THE SAME ASSESSEE, DIFFERENT ASSESSMENT YEARS, COMMON AND IDENTICAL ISSUES ARE INVOLVED THEREFORE THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. THE ASSESSEES APPEAL IN ITA NO.70/KOL/2018 FOR ASSESSMENT YEAR 2012-13 IS TAKEN AS THE LEAD CASE. 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITS LEAD CASE IN ITA NO.70/KOL/2018, READS AS UNDER: ITA NOS.70,71&72/KOL/2018 ASSESSMENT YEARS: 2012-13,2013-14 & 2015-16 SHRI GIRDHARI LAL GOENKA 2 1. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS)-21, KOLKATA HAS ERRED IN LAW AS WELL AS ON FACTS BY APPLYING A RATE OF 4% ON ESTIMATE BASIS, ON THE SUM TOTAL OF THE TRIAL BALANCES EACH YEAR, TO DETERMINE UNDISCLOSED COMMISSION INCOME, AS AGAINST THE 0.2% APPLIED BY THE ASSESSING OFFICER. 2.THE APPELLANT CRAVES LEAVE TO ALTER, AMEND, ADD OR DELETE ONE OR ALL THE GROUNDS OF APPEALS MENTIONED ABOVE. 4. BRIEF FACTS QUA THE ISSUE AS RECORDED IN THE ASSESSMENT ORDER ARE AS FOLLOWS: DOCUMENT GG/7: IN COURSE OF OPERATION, A DOCUMENT MARKED GG/7 WAS SIZED FROM THE OFFICE PREMISES OF M/S. GOLDEN GOENKA FINCORP LTD. AT 18, BRITISH INDIA STREET, KOLKATA. THE PAGES 43-45 OF THE SAID DOCUMENT GG/7 CONTAINS ACCOUNTS OF SKBS (LG) FOR THE PERIOD FROM 01.01.2014 TO 30.09.2014. PAGE NO. 45 OF GG/7 IS THE BALANCE SHEET OF SKB (LG) AS ON 30.09.2014 AND THE TOTAL ASSETS HAS BEEN SHOWN AS 1,78,43,449.53. BUT THE TOTAL ASSETS SHOULD BE READ AS 1,78,43,44,953/-. SINCE THE LAST TWO DIGIT WERE SUPPRESSED. THE ASSESSEE HAD ADMITTED IN COURSE OF SEARCH OPERATION U/S 132(4) THAT THE TRANSACTIONS ACCOUNTED IN SKB(LG) ARE UNACCOUNTED. THE ASSESSEE HAD FURTHER SUBMITTED:- PAGE NO. 43 TO 45 OF GG/7 CONTAINS THE SUMMARY OF SKB (LG) FOR THE PERIOD FROM 1 ST JANUARY, 2004 TO SEPTEMBER, 2004, WHEREIN FINANCE COMMISSION @ 0.20% ON TOTAL TURNOVER AMOUNTING TO RS. 36 LAKH HAS BEEN EARN AND DISCLOSED IN A.Y. 2015-16. THE DISCLOSURE MADE BY YOU ON SKB (LG) WAS NOT ADEQUATE. IN COURSE OF ANALYSIS OF THE DOCUMENT GG/PD/1 SEIZED FROM THE OFFICE PREMISES OF M/S. GOLDEN GOENKA FIN CORP AT 18, BRITISH INDIA STREET, KOLKATA, SKB (LG) TRIAL BALANCE FOR THE PERIOD 01.01.2001 TO 31.03.2002 [PATH:/PENDRIVE-2/DATA-LG] WAS FOUND AND THE TOTAL TURNOVER HAS BEEN SHOWN AT 1,97,60,401.21. IN THIS CASE, THE ACTUAL PERIOD SHOULD BE READ AS 01.01.2011 TO 31.03.2012 AND THE TOTAL TURNOVER SHOULD BE READ AS 197,60,40,121/-. IT IS APPARENT THAT THIS DOCUMENT WAS NOT CONSIDERED AT THE TIME OF MAKING DISCLOSURE U/S 132(4) OF THE I.T. ACT, 1961 BY THE ASSESSEE. THEREFORE, THE UNDISCLOSED COMMISSION INCOME OF THE ASSESSEE ON THE BASIS OF SKB (LG) DOCUMENTS FOUND & SEIZED IN COURSE OF SEARCH OPERATION U/S 132 OF THE I.T. ACT, 1961 IS WORKED OUT AS FOLLOWS: SL NO. DOCUMENTS REFERRED ASSESS MENT YEAR QUANTUM OF UNDISCLOSED COMMISSION INCOME (IN RS) REMARKS 1 SKB(LG) BALANCE SHEET 2015- 16 35,68,690 THE UNDISCLOSED COMMISSION INCOME HAS BEEN TAKEN @ ITA NOS.70,71&72/KOL/2018 ASSESSMENT YEARS: 2012-13,2013-14 & 2015-16 SHRI GIRDHARI LAL GOENKA 3 (01.01.2014 TO 30.09.2014 0.20% OF TOTAL TURNOVER OF RS. 178,43,44,953/- 2 SKB (LG) TRIAL BALANCE (01.10.2002 TO 31.03.2002) CONTAINED IN GG/PD/1 2012- 13 39,52,080 THE UNDISCLOSED COMMISSION INCOME HAS BEEN TAKEN @ 0.20% OF TOTAL TURNOVER OF RS. 197,60,40,121/- TOTAL 75,20,770 THE ASSESSEE VIDE A LETTER DATED 16.11.2017 WAS ASKED TO EXPLAIN WHY THE SUM OF RS. 35,68,690/- AND RS. 39,52,080/- SHOULD NOT BE TREATED AS YOUR UNDISCLOSED COMMISSION INCOME OF A.Y. 2015-16 AND 2012-13 RESPECTIVELY AND ADDED BACK TO HIS TOTAL INCOME. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS ENHANCED THE ASSESSMENT OF THE ASSESSEE OBSERVING THE FOLLOWING: AS REGARDS THE RATE OF COMMISSION, HAVING REGARD TO THE FACTS OF CASE, SURROUNDING CIRCUMSTANCES AND THE PREVALENT TRADE PRACTICES IN THIS LINE OF WORK, I FIND THE RATE OF 0.2% TO BE VERY LOW AND OVERALL COMMISSION @4% (2% FOR EACH LEG OF THE TRANSACTION I.E. RECEIPT OF MONIES AND PAYMENT OF MONIES) IS FOUND TO BE JUSTIFIABLE AND MEETING THE ENDS OF JUSTICE. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW WHEREAS THE LD. DR FOR THE REVENUE RELIED ON THE ORDER OF ASSESSING OFFICER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE NOTE THAT THE ISSUE INVOLVED IN THESE APPEALS IS WHETHER COMMISSION INCOME @ 0.20% ON ACCOMMODATION ENTRIES IS VERY LOW? WE NOTE THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ITAT NO.32 OF 2019 ORDER DATED 07.03.2019 HELD THAT COMMISSION ON ACCOMMODATION ENTRIES AT THE RATE OF ITA NOS.70,71&72/KOL/2018 ASSESSMENT YEARS: 2012-13,2013-14 & 2015-16 SHRI GIRDHARI LAL GOENKA 4 RS.250/- PER LAKH RUPEES WHICH COMES @0.25% IS JUSTIFIABLE. THE FINDINGS OF THE JURISDICTIONAL HIGH COURT IS GIVEN BELOW: RE: ITAT NO. 32 OF 2019, GA NO. 276 OF 2019: NO QUESTION OF LAW IS INVOLVED IN THIS MATTER, LET ALONE ANY SUBSTANTIAL QUESTION OF LAW. THE QUESTIONS WHICH HAVE BEEN RAISED BY THE REVENUE ARE QUESTIONS OF FACT. AFTER ADDUCING SOME INTELLIGIBLE REASONS THE TRIBUNAL HAS COME TO ITS FINDINGS AS FOLLOWS. 'HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE REVENUE HAS ACCEPTED THE SUBMISSION OF ASSESSEE IN THE CASE OF M/S. MERCANTILE PVT. LTD. IN AN IDENTICAL SITUATION THAT THE COMMISSION OF ACCOMMODATION ENTRIES WAS RS.250 PER LAKH RUPEES AND DETERMINED THE TAX @ 0.25%. WHEREAS IN THE PRESENT CASE THE ASSESSEE ITSELF OFFERED PROFIT RATE AT 0.26%, ACCEPTED BY THE REVENUE FOR THE A.Y. 2011-12 AND WHICH IS MORE THAN IN THE CASE OF M/S. MERCANTILE PVT. LTD., WHICH WAS ALSO RELATED TO BADALIA GROUP OF CASES. IN VIEW OF THE SAME, WE FIND THAT THE CIT-A WAS CORRECT IN DIRECTING THE AO TO REDUCE THE ADDITION TO RS.5,67,964/-. WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT-A AND IS IT IS JUSTIFIED. THEREFORE, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03-11-2017.' FOR THE REASONS ABOVE, WE FIND NO REASON TO ADMIT THE APPEAL. THE APPEAL (ITAT NO. 32 OF 2019) AND THE CONNECTED APPLICATION (GA NO.276 OF 2019) ARE DISMISSED. 8. RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT (SUPRA) ON IDENTICAL FACTS, WE DIRECT THE A.O TO TREAT THE COMMISSION OF ACCOMMODATION ENTRIES AT THE RATE OF RS.250 PER LAKH WHICH COMES AT 0.25% OF THE AMOUNT. THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED IN ABOVE TERMS. ITA NOS.70,71&72/KOL/2018 ASSESSMENT YEARS: 2012-13,2013-14 & 2015-16 SHRI GIRDHARI LAL GOENKA 5 9. IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEE (IN ITA NOS.70,71&72/KOL/2018) ARE PARTLY ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16/03/2020. SD/- (S. S. GODARA) SD/- (A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 16/03/2020 RS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT- SHRI GIRDHARI LAL GOENKA 2. / THE RESPONDENT.- DCIT, CENTRAL CIRCLE-4(3), KOLKATA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. [ / GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA .