ITO, Ward - 25(1), Kolkata , Kolkata V. Shri Pradip Kumar Khetan , Kolkata

MA 10/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9639 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-07-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 06-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: Business income; Question of law; Accommodation entries
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S. GODARA, JM &DR. A.L. SAINI, AM MA NO.10/KOL/2020 (ARISING OUT OF . / ITA NO. 385/KOL/2018) ( / ASSESSMENT YEAR:2014-15) ITO, WARD-25(1), KOLKATA VS. SHRI PRADIP KUMAR KHETAN 3/113/1, AZADGARH, TOLLYGUNGE, KOLKATA-700040. ./ ./PAN/GIR NO.: AINPK 2961 K (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI JAYANTA KHANRA, JCIT, SR. DR RESPONDENT BY :NONE / DATE OF HEARING : 21/02/2020 /DATE OF PRONOUNCEMENT : 08/07/2020 / O R D E R DR. A.L. SAINI, AM: THIS IS A MISCELLANEOUS APPLICATION FILED BY THE R EVENUE PRAYING TO RECALL THE ORDER OF THIS TRIBUNAL PASSED IN ITA NO. 385/KO L/2018 DATED 19.06.2019. 2. THE CASE OF THE REVENUE IN THIS MISCELLANEOUS AP PLICATION IS THAT THE TRIBUNAL HAS ADJUDICATED GROUNDS OF APPEAL RAISED BY REVENU E TREATING THE ASSESSEE AS ACCOMMODATION ENTRY PROVIDER AND SUSTAINED THE ADDI TION @0.25% OF THE TRANSACTION VALUE. THIS TRIBUNAL HAS ALSO NOT ADJUD ICATED THE ISSUE OF BUSINESS LOSS FROM COMMODITY INCOME. SHRI PRADIP KUMAR KHETAN MA NO.10/KOL/2020 (ARISING OUT OF ITA NO. 385/KOL/2018) ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 2 22 2 3.WE HAVE HEARD LD. D.R. FOR THE REVENUE. WE NOTE T HAT BOTH SALES AND PURCHASES WERE HELD TO BE ACCOMMODATION ENTRIES, THEREFORE TH IS TRIBUNAL HAD DISMISSED THE APPEAL OF REVENUE OBSERVING AS FOLLOWS: WE NOTE THAT THE ADDITION OF ENTIRE SUNDRY CREDITO RS MADE BY THE A.O CANNOT BE SUSTAINED SINCE THE A.O. HAS ACCEPTED BOTH THE PURC HASES & SALES MADE BY THE ASSESSEE. IF THE PURCHASER ARE ACCEPTED THE SUNDRY CREDITORS CANNOT BE TREATED AS BOGUS AS THEY ARE COUNTER PARTS OF THE SAME TRANSAC TIONS. ALSO THE PARTY FROM WHICH THE PURCHASE HAVE BEEN MADE IS ALSO ASSESSED BY HIM ONLY WHERE HE HAS ACCEPTED THE SALES. THUS THE ADDITION OF SUNDRY CRE DITORS CANNOT BE SUSTAINED. HOWEVER, WE NOTE THAT FACT THE AUTHENTICITY OF THES E TRANSACTIONS WERE NOT PROVED CANNOT BE DENIED. THE ASSESSEE INDULGED IN PROVIDIN G ACCOMMODATION ENTRIES OF PURCHASES AND SALES, MUST HAVE CHARGED CERTAIN PER CENTAGE AS COMMISSION. THE SAID COMMISSION EARNED BY THE ASSESSEE IS TO BE ADD ED IN THE HANDS OF THE ASSESSEE. GENERALLY THE BASIC PERCENTAGE OF COMMISS ION CHARGED IN THESE KINDS OF TRANSACTION RANGES BETWEEN 0.15% TO 0.25% OF THE TR ANSACTION VALUE. THESE COMMISSION INCOME @ 0.25% OF RS. 18,03,16,081/- I.E .RS. 4,50,790/- IS TREATED AS THE INCOME EARNED BY THE ASSESSEE. THEREFORE, THE A DDITION IS RESTRICTED TO RS. 4,50,790/-. IN THIS PECULIAR FACTS AND CIRCUMSTANCE S WE NOTE THERE IS NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). HENCE, WE DISMIS SED THE GROUND RAISED BY THE REVENUE. 3. WE NOTE THAT THIS TRIBUNAL HAS DECIDED IN MANY CASES THAT IN CASE OF ACCOMMODATION ENTRY PROVIDER WHERE THE ASSESSEE GET S ONLY COMMISSION IN THE RANGE OF 0.15% TO 0.25% , THE TRIBUNAL HAS CONFIRME D COMMISSION AS INCOME OF THE ASSESSEE. IN THE ASSESSEE`S CASE UNDER CONSIDER ATION @ 0.25%OF THE TRANSACTION VALUE HAS BEEN CONFIRMED AS INCOME OF THE ASSESSEE WHICH IS QUITE REASONABLE, FOR THAT WE RELY ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN ITAT NO.32 OF 2019 ORDER DATED 07.03.2019 WHEREIN I T WAS HELD AS FOLLOWS : 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 RE VENUE ARE QUESTIONS OF FACT. AFTER ADDUCING SOME INTELLIGIBLE REASONS THE TRIBUN AL 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 ACCOMMOD ATION 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%, ACCE PTED BY THE REVENUE FOR THE A.Y. 2011-12 AND WHICH IS MORE THAN IN THE CASE OF M/S. MERCANTILE PVT. LTD., WHICH SHRI PRADIP KUMAR KHETAN MA NO.10/KOL/2020 (ARISING OUT OF ITA NO. 385/KOL/2018) ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 3 33 3 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 DI SMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 03-11-2017.' FOR THE REASONS ABOVE, WE FIND NO REASON TO ADMIT T HE APPEAL. THE APPEAL (ITAT NO. 32 OF 2019) AND THE CONNECTED APPLICATION (GA NO.276 OF 2019) ARE DISMISSED. 4. BASED ON THE ABOVE FACTS, WE NOTE THAT THERE IS NO ANY APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL, SO FAR COMMISSION INCOME IS CONCERNED. 5.WITH REGARD TO THE ISSUE OF BUSINESS LOSS FROM CO MMODITY INCOME, WE ARE OF THE VIEW THAT SINCE WE HAVE TREATED THE ASSESSEE AS ACC OMMODATION ENTRY PROVIDER AND WE CONFIRMED THE COMMISSION INCOME @ 25% OF THE TRA NSACTION VALUE THEREFORE THE QUESTION OF BUSINESS LOSS DOES NOT ARISE. HOWEV ER, IF THE ASSESSEE HAS ACCUMULATED BUSINESS LOSS WHICH HE WANTS TO SET OFF FROM COMMODITY BUSINESS INCOME, THE SAME SHOULD BE ALLOWED IN ACCORDANCE WI TH LAW. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO EXAMINE THE PAST BUSINESS LOSSES WHICH THE ASSESSEE WANTS TO SET OFF AGAINST COMMODITY BUSINESS AND ALLOW THE SET OFF, IF ANY, IN ACCORDANCE TO LAW. 6.BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BEI NG PRONOUNCED AFTER 90 DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKD OWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO- ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE O F DCIT VS. JCB LIMITED IN ITA NO. 6264/MUM/2018 AND ITA NO. 6103/MUM/2018 FOR A.Y. 2013-14 ORDER DATED 14.05.2020. SHRI PRADIP KUMAR KHETAN MA NO.10/KOL/2020 (ARISING OUT OF ITA NO. 385/KOL/2018) ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 4 44 4 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE REVENUE IS ALLOWED TO THE EXTENT INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 08.07.2020 SD/- ( S.S. GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 08/07/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-25(1), KOLKATA 2. SHRI PRADIP KUMAR KHETAN 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES