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2017 (3) TMI 686 - AT - Income TaxRate for estimating the commission - Issuance of bogus bills - CIT(A) has treated total turnover reflected in different bank accounts as handled by the assessee on the basis of circumstantial evidence - Held that:- The assessee in his reply has only confirmed about transactions in Mehsana Nagrik Sahakari Bank Ltd. Papers were also found to this effect at his premises. Other bank accounts have been connected with the assessee only on assumption basis. It may be a case that person like assessee might have been carried out such transactions on behalf of Vishal Traders at Ahmedabad and other cities where these banks are located. There is no conclusive proof with the Department exhibiting the fact that transactions in all other banks were also routed through the assessee or he has deposited the cheques received from the alleged purchaser, withdrew the cash on the selfcheque issued by Vishal trades and handed over these cheques to Shri Dharmendra Pandya. Therefore, we are of the view that commission income in the hands of the assessee is to be assessed qua the turnover available in Mehsana Nagrik Sahakari Bank Ltd. In Asstt.Year 2007-08 no transactions have been carried out in this bank account. Therefore, there should not be any addition in that year. We allow the appeal of the assessee and delete addition. As far as other two years are concerned, we find that transactions are there in the Mehsana Nagrik Sahakari Bank Ltd. Commission rate adopted by the AO at 2% is reasonable rate in this type of activity. The ld.CIT(A) ought to have not reduced it to 1%. Therefore, we allow both the appeals of the Revenue and hold that whatever turnover is to be confirmed, rate for estimating the commission income will be at 2% (two percent). For Asstt.Year 2008-09 and 2009-10 we direct the AO to take the turnover available in Mehsana Nagrik Sahakari Bank Ltd. i.e. turnover of ₹ 2,04,23,897/- in Asstt.Year 2008-09 and ₹ 37,48,108/- in Asstt.Year 2009-10. The total turnover is to be computed at ₹ 2,41,72,005/-. The income of the assessee from these activities is to be worked out at 2% (two percent) of this turnover. This income will be in addition to any other income disclosed by the assessee in both the years. The ld.counsel for the assessee has agreed for the rate of 2% (two percent) as well as estimation of income at 2% (two percent) of the alleged turnover in addition to the income disclosed by the assessee. We have specifically confronted the ld.counsel for the assessee to this effect and he did not raise any objection. In this way, all these appeals are allowed.
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