2015 (11) TMI 1693 - AT - Income Tax

Unexplained cash credits - Addition to the commission income at 0.15% - reasonable percentage to the commission on the total turnover - Held that - Respectfully following the orders of the Tribunal including the order of Tribunal in assessee s own case in the immediately preceding year 2008 (3) TMI 687 - ITAT MUMBAI we find that the ld. CIT(A) has rightly deleted the addition as held the theory of Assessing Officer to treat the entire deposit as unexplained cash credits cannot be accepted in the light of assessment orders in the case of beneficiaries and also in the light of the fact that assessee is only concerned with the commission earned on providing accommodation entries. We therefore of the view that since the assessee itself has declared the commission on turnover at 0.15% which is more than the percentage considered to be reasonable the same should be accepted. We accordingly accept the commission declared by the assessee and set aside the order of the CIT (A) in this regard - Decided against revenue Allowabaility of expenses - expenses claimed by the assessee in its profit and loss account disallowed on ad hoc basis - Held that - Since the issue raised herein has already been decided by the Tribunal and nothing has been brought on record by the ld. DR to contradict the findings of the Tribunal we therefore direct the AO to follow the order of Tribunal for this year also. We therefore hold that 50% of the expenses should be allowed. The AO is directed to give relief accordingly.

Summary

Issues:
1. Appeal by Revenue against order dated 8.11.2011 for AY 2003-04.
2. Appeal by Assessee against order dated 18.1.2013 for AY 2004-05.

Analysis:

Issue 1 - Appeal by Revenue (AY 2003-04):
- Revenue contested restriction of addition of Rs. 370.69 lakhs under section 68 to 0.15%.
- Assessee cited precedents where similar issues were decided in their favor.
- Tribunal noted consistent acceptance of the assessee's position in various cases.
- Tribunal upheld CIT(A)'s deletion of the addition, citing precedents and lack of contradictory evidence.
- Grounds 1 and 2 by Revenue were dismissed.

Issue 2 - Appeal by Assessee (AY 2004-05):
- Assessee challenged CIT(A)'s confirmation of AO's order and interest levied under sections 234B and 234C.
- Assessee relied on a previous Tribunal decision in their favor for other assessment years.
- Tribunal reviewed the previous decision and directed AO to allow 50% of the expenses, partly allowing the appeal.
- Grounds 1, 2, 3, 6, and 7 were dismissed as general or consequential.
- Grounds 4 and 5 were partly allowed based on the Tribunal's previous decision.

Conclusion:
- Revenue's appeal for AY 2003-04 was dismissed.
- Assessee's appeal for AY 2004-05 was partly allowed regarding expenses and dismissed on other grounds.
- The Tribunal's decision was based on consistent precedents and lack of contradictory evidence.