NANAK MOTUMAL PHERWANI,SURAT V. ITO, WARD2(3)(1), SURAT

ITA 527/SRT/2024

AI Insights

This case involves an appeal by Nanak Motumal Pherwani against the order of the National Faceless Appeal Centre, Delhi, which confirmed the assessment order passed by the Assessing Officer under sections 147 and 144B of the Income Tax Act, 1961. The assessment was based on a survey action in the case of M/s Hari Corporation, managed by the assessee's brother, which was also engaged in cheque discounting. The Assessing Officer had added a commission income of 1.00% on total transactions/credits in the assessee's bank account and an addition of Rs.1.20 lakh under section 69A, which were both confirmed by the CIT(A). The Tribunal, referencing similar cases, found the commission income should be assessed at 0.50% and upheld the addition of Rs.1.20 lakh as no specific appeal was made against it.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106866 (ITAT-SURAT)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 09-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 06-05-2024
• Other Referred Cases: Sanjay R Shah vs. ITO [2017] 88 taxmann.com 809 (Ahmedabad-Trib.)/[2016] 51 ITR(T) 250 (Ahmedabad \\u2013 Trib.), Shri Rohit Pravindhandra Panwala vs. ACIT in IT(SS)A No.608-612/Ahd/2010 dated 31.05.2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: SURESH K. KABRA
• Section: 147; 250; 69

Judgement Text

"आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT “SMC” BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER आ.अ.सं./ITA No.527/SRT/2024 (AY 2013-14) (Physical court hearing) Nanak Motumal Pherwani B-219, Elbee Apartment, Ring Road, Surat-395002 [PAN No: AFVPP 6524 L] बनाम Vs Income Tax Officer, Ward-2(3)(1), Surat, Room # 614, Income Tax Office, Aayakar Bhavan, Majura Gate, Surat-395 001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Suresh K. Kabra, CA राजˢ की ओर से /Revenue by Shri Mukesh Jain, Sr-DR अपील पंजीकरण/Appeal instituted on 06.05.2024 सुनवाई की तारीख/Date of hearing 09.10.2024 उद ्घोषणा की तारीख/Date of pronouncement 14.10.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld. CIT(A)”] dated 08.03.2024 for assessment year 2013-14, which in turn arises out of assessment order passed by the Assessing Officer under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 26.05.2023. 2. Rival submissions of both the parties heard and record perused. The Ld. Authorized Representative (Ld.AR) for the assessee submits that assessee engaged in the business of cheque discounting and transfer of money. The assessee filed his return of income for the year under consideration of assessment year 2013-14 on 31.01.2014 of Rs.2,03,370/-. The case of assessee was reopened on the basis of survey action in case of M/s Hari Corporation, which is managed by his brother namely Harish Pherwani as well ITA No.527/SRT/2024 (A.Y 13-14) Nanak M Pherwani 2 as M/s Hari Corporation are engaged in the business of cheque discounting. The Assessing Officer while passing assessment order made addition @ 1.00 % commission of total transactions / credit received in assessee’s bank account. The commission earned by the assessee has already been shown in the return of income. The commission earned by assessee varies from 0.15% to 0.20% per Rs.100/-, which is depending upon clearance and profile of persons. The Ld.CIT(A) confirmed the action of Assessing Officer. The Ld. AR for the assessee further submits that Assessing Officer also made addition of Rs.1.20 lakh under section 69 of the Act on the ground that assessee has given such amount to M/s Hari Corporation from his bank account and such amount was given by assessee on account of business. The Ld. CIT(A) also confirmed such addition as well. The Ld. AR for the assessee submits that in case of M/s Hari Corporation, the Assessing Officer has taxed commission @ 0.102% i.e., ten paisa per hundred rupees or less than of Rs. 0.10%. Copy of assessment orders for assessment years 2011-12, 2012-13 2013-14 and 2014-15 of Shri Harishkumar M Pherwani are placed on record. The Ld. AR for the assessee submits that commission in cheque discounting is very low, which has already been offered by assessee and no further addition was warranted. The Ld. AR for the assessee further submits that co-ordinate Benches of ITAT Ahmedabad in case of Sanjay R Shah vs. ITO [ 2017] 88 taxmann.com 809 (Ahmedabad-Trib.)/[2016] 51 ITR(T) 250 (Ahmedabad – Trib.) also confirmed the addition to the extent of 0.10%. Further, Ld. AR for the assessee relied in the case of Shri Rohit Pravindhandra Panwala vs. ACIT in IT(SS)A No.608-612/Ahd/2010 dated 31.05.2011 wherein the co-ordinate ITA No.527/SRT/2024 (A.Y 13-14) Nanak M Pherwani 3 Benches sustained the addition to the extent @ 0.125% i.e., twelve paisa per rupees hundred. On the addition of Rs.1.20 lakh under section 69A, Ld. AR for the assessee submitted that such amount was duly shown in the balance- sheet of assessee. Thus, no addition is warranted. 3. On the other hand, Ld. Senior Departmental Representative for the Revenue (Ld .Sr-DR) supported the order of lower authorities on both the grounds of appeal raised by the assessee. 4. I have considered the contention of both the parties and have gone through the orders of lower authorities carefully. Ground No.1 relates to addition of commission income. I find that Assessing Officer made the commission income @ 1.00 % of total transaction / credit in the bank account of assessee. The Ld. CIT(A) confirmed such action of Assessing Officer. Before me, Ld. AR for the assessee vehemently argued that in case of assessee’s group concerned, the Revenue has assessed commission income @ nine paisa or ten paisa per rupees hundred. However, in case of assessee, the Revenue has followed similar income assessed @ 1.00 % per hundred rupees. The Ld. AR for the assessee relied on the decision of Sanjay R Shah (supra) and in the case of Rohit P Panwala (supra) wherein similar income was assessed @ ten paisa or twelve paisa per rupees hundred. Thus, considering the overall facts and circumstances of the case, in my view, if the commission income is considered @ .50 paisa per rupees hundred is sufficient and reasonable as no straight jacket formula can be applied of such income. Thus, ground No.1 is partly allowed. ITA No.527/SRT/2024 (A.Y 13-14) Nanak M Pherwani 4 5. So far as ground No.2 is concerned, I find that no specific ground of appeal is raised by assessee while filing appeal before ld CIT(A). the ld AR for the assessee has not filed any application for raising additional grounds of appeal. Thus, submissions of ld AR of the assessee against addition of Rs.1.20 lakh is rejected. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced in open court on 14th October, 2024. Sd/- (PAWAN SINGH) [Ɋाियक सद˟ JUDICIAL MEMBER] सूरत /Surat, Dated: 14/10/2024 Dkp Outsourcing Sr.P.S* आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to :  अपीलाथȸ/ The Appellant  Ĥ×यथȸ/ The Respondent  आयकर आयुÈत/ CIT  आयकर आयुÈत (अपील)/ The CIT(A)  ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, सूरत/ DR, ITAT, SURAT  गाड[ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत "