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ITO, Ward-1 Godhra Versus Shri Dharmendra J. Pandya Prop. M/s. Vishal Traders

2016 (6) TMI 688 - ITAT AHMEDABAD

Commission income determination on the bogus bills issued - Estimation of commission income - Held that:- We find that AO while framing the assessment order u/s.144 of the Act had estimated the commission income of 5% of the total bogus sales bills which was reduced to 1% by the ld.CIT(A). We find that the Coordinate Bench of Tribunal while deciding the issue in the case of Madanlal L.Chandak (2014 (5) TMI 191 - ITAT AHMEDABAD ), wherein additions for similar amounts were made, had restricted th .....

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in favour of assessee - ITA No (s). 2649/Ahd/2014, 2650/Ahd/2014, CO 69/Ahd/15, CO 70/Ahd/15 - Dated:- 16-6-2016 - Shri R. P. Tolani, Judicial Member And Shri Anil Chaturvedi, Accountant Member For the Assessee : None For the Revenue : Shri K. Madhusudan, Sr. DR ORDER Per Bench Appeals by the Revenue are directed against the common order of the Commissioner of Income Tax(Appeals)-I, Ahmedabad dated 31/07/2014 passed for the assessment years 2007-08 & 2008-09 and assessee in Cross Objection .....

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Sr.DR and material on record. For the sake of convenience, we proceed to dispose of the appeals and Cos by a consolidated order. We proceed with the facts for AY 2007-08. 3. First, we take up the appeal, i.e. Revenue s appeal in ITA No.2649/Ahd/2014 for AY 2007-08 as a lead case. 3.1. The relevant facts as culled out from the materials on record are as under:- 3.2. A search and survey action under the Income Tax Act, 1961 (hereinafter referred to as "the Act") took place at the premise .....

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essee was recorded u/s.131 of the Act. Thereafter, the case of the assessee was reopened by issuing notice u/s.148 of the Act dated 01/08/2011 and the reasons were reopening of the assessment were communicated to the assessee and the assessee was requested to file the return of income. AO noted that despite various opportunities granted to the assessee, assessee remained non-cooperative. AO was therefore compelled to finalize the assessment proceedings u/s.144 of the Act vide order dated 07/03/2 .....

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sment order for AY 2009-10 in assessee s case on similar facts and circumstances, commission income received by the assessee from issuance of bogus bills was calculated @ 5% of the total bills, AO therefore following similar method as followed by the AO in AY 2009-10, computed the commission income received by the assessee for the impugned year on issue of bogus bills at 5% (5% of ₹ 4,06,85,237/-) and worked out the commission income at ₹ 20,34,261 and made its addition. Aggrieved by .....

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lear that the appellant has not denied the issuance of bogus bills and receiving cheques in his bank accounts Shri Madanlal L.Chandak has also accepted in his statement that he was using Vishal Traders for facilitating different parties to have bogus bills. He has also stated that he introduced many parties to Shri Dharmendra J.Pandya. The facts and circumstances of the case show that the appellant and Shri Madanlal L.Chandak were working in connivance and for this purpose the appellant could no .....

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a commission of Re.1-per bag was received by him. Hence, receiving of commission was not denied. The question in dispute is the quantum of commission received by the appellant. In view of the above facts and circumstances, it cannot be denied that the appellant would have received commission from Shri Madanlal L.Chandak for letting him to use his name and bank account for the purpose of issuing bogus bills and also from the parties who were directly getting bogus bills from the appellant. In the .....

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ounts Hence a commission of 1% of total amount is upheld which is as under: AY Deposits during the period Addition made by the AO on account of Commission @5% Addition of commission @ 1% upheld Relief given 2007- 08 Rs.4,06,85,237/- Rs.20,34,260/- Rs.4,06,852/- Rs.16,27,408/- 2008- 09 Rs.33,89,89,074/- Rs.1,69.49.453/- Rs.33,89,890/- Rs.1,35,59,563/- 4. Aggrieved by the order of ld.CIT(A), Revenue is now in appeal before us and has raised following common grounds:- 1. On the facts and in the cir .....

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aised in CO No.69/Ahd/2015 for AY 2007-08 (arising out of ITA No.2649/Ahd/2014 - AY 2007-08) read as under:- 1. The learned CIT(A) has grossly erred in estimating commission income at 1% of total amount deposited in the bank of ₹ 4,06,85,237/- (for AY 2008-09 of ₹ 33,89,89,074/-) resulting into commission income of ₹ 4,06,852/- (for AY 2008-09 of ₹ 33,89,890/-) for the assessment year 2007-08. The learned CIT(A) has not considered the fact that the appellant has received .....

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IT(ss)A Nos.423 to 425/Ahd/2012 with CO Nos.205 to 207/Ahd/2012 for AYs 2007-08, 2008-09 & 2009-2010, order dated 02/05/2014 Revenue had preferred appeals before the Hon ble Tribunal and assessee had also preferred Cross Objections. The Tribunal (ITAT B Bench Ahmedabad) had decided the issue by granting partial relief to Assessee vide order dated 02/05/2014. He placed on record the copy of the aforesaid order. He however supported the order of AO. 6. We have heard the ld.Sr.DR perused the m .....

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danlal L.Chandak (Shah), wherein additions for similar amounts were made, had restricted the addition at around 50% to the additions that were made by the ld.CIT(A). The observation of the Coordinate Bench of Tribunal in the case of Madanlal Chandak (Shah)[supra) are as under:- 5. We have considered submissions of the learned DR and have perused the orders of the AO and the CIT(A). We find that the assessee was in the activity of arranging bogus bills for certain parties, and he has also admitte .....

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roperties was found by the department, as a result of search. The assessee claimed that he has not issued any bogus bills to any party and no cash was found or seized at the time of search, and that no bank account was maintained by the assessee, and nothing was found during the course of search. However, we find that the CIT(A) has given a finding that the assessee has introduced Shri Dharmendra Pandya, proprietor of Vishal Traders to various parties. We find force in the findings of the CIT(A) .....

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