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2015 (10) TMI 791 - AT - Income TaxAssessment of commission income of providing accommodation entires - CIT(A) estimated the income @5% out of Hawala transactions - - Held that:- The Assessee was receiving some commission for providing accommodation entries. He has also noted that Assessee as well as Shri Ashish Patel of Radhe group had claimed that Assessee was entitled for commission at 1.5% of the bills raised. Before us, no material has been brought on record by either of the parties to controvert the aforesaid findings of CIT(A). We also find that CIT(A) has concluded that Assessee must have earned something more that was admitted during the search proceedings and the Assessee was a Hawala giver and in such Hawala transactions, the normal commission charged by Hawala was 5% of the value of such transactions. We find that CIT(A) has not brought on record any material to arrive at the basis for working out the commission at 5% and at the same time the Assessee and the Revenue has also not brought on record any material to support their respective contentions. In view of the aforesaid and considering the totality of the facts, we are of the view that the ends of justice shall be met if an estimation of income earned by the Assessee is made in the present case. We are of the view that an estimate of 2.5% of the total amount receipts received by the Assessee would meet the ends of justice. We thus direct accordingly and thus these grounds of the Assessee and Revenue are partly allowed - Decided partly in favour of assessee. Penalty under section 271(1)(c) - CIT(A) giving relief of 95% of penalty imposed - Held that:- CIT(A) has held that for levy of penalty it should be found that all the conditions of section 271(1)(c) must exist before levy of penalty and that it is for the Revenue to establish that such conditions exist. We find that there is no such finding recorded by CIT(A) in the impugned order passed by him that all the conditions for levy of penalty were fulfilled before levy of penalty in this case and that Revenue has established that such conditions exist. We find that the only finding recorded by CIT(A) for confirming the penalty in this case was that Assessee was abating in tax evasion. The act of abatement in tax evasion for some other person could not be made the basis for levy of penalty u/s. 271(1)(c) on the Assessee. We further find that CIT(A) has passed a cryptic order. On these facts of the case, we are of the view that the impugned order could not be sustained. However in the interest of justice to both the parties, we consider that it shall be appropriate to restore the issue of penalty u/s. 271(1)(c) to the file of A.O to pass a de novo order in accordance with law after providing reasonable opportunity of hearing to the Assessee and A.O shall record a clear finding on the issue that the conditions for levy of penalty u/s. 271(1)(c) exists and proved in this case - Decided in favour of revenue statistical purpose.
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