TMI Blog2012 (11) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal for the assessment year 1999-2000 may be first decided and for the remaining assessment years, the decision in assessment year 1999-2000 can be followed. 4. Brief facts till the assessment stage are noted by Ld. CIT(A) in para 4 to 4.4 of his order which are reproduced below: 4. A survey u/s 133A of the IT. Act, 1961 was carried out by ADIT (Investigation)- Baroda on 30.03.2005 at the business premises of M/s. Durga Finance (Proprietor Smt. Rekhaben Thakkar). During the course of survey, it was found that during the period from financial year 1998-99 to financial year 2003-04 the assessee had entered into huge transactions with M/s. Durga Finance. Though these transactions were carried out in cash the same were not disclosed in the books of the appellant. On the basis of receipt of this information in the month of March 2006 the AO concerned issued notices u/s. 148 for the assessment years 1999- 00, 2003-004 and 2004-05 and for assessment year 2000-01, the notice u/s 148 of the Act was issued on 23.03.2007. 4.1. During survey proceedings, the ADIT had impounded books of accounts, loose papers and vouchers from the premises of M/s. Durga Finance. The documents so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the account of new partners namely Shri Hardikbhai B. Patel, Shri Snehal Shah and Shri Shyambhai M, Kahar and according to the A,0. such adjustment established that the financing was actually done by the partners. Shri Snehal Shah particularly was very young and nephew of the appellant which shows that he is a dummy of the appellant and thus there was a clear establishment of relationship with M/s. Durga Finance. 4.2 The A.O. also conducted enquiries with Indian Oil Corporation, M/s. Liladhar Petroleum, M/s. Durga Finance and Gas Authority of India Ltd, the outcome of which is reflected as under: a) Indian Oil Corporation confirmed that they had issued material against three demand drafts received from M/s Liladhar Petroleum and M/s. Veer Shahid Petroleum. b) Shri Samantsinh Mahida, partner of M/s Liladhar Petroleulm, in his statement recorded stated that the appellant was arranging all the funds for the business and that Shri Snehal Shah, nephew of the appellant was also a partner. c) Mr. Harin Thakkar, Manager of M/s Durga Finance had stated that'they were issuing demand drafts/cheques to the parties known to them or referred to them by the known per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urga Finance and he directed the A.O. to assessee commission income @5% of the total amount of demand draft/pay order sold by the assessee in these four years. Now, the assessee is in further appeal before us regarding the part addition upheld by Ld. CIT(A) to the extent of 5%. On query by the bench, it was submitted by the Ld. D.R. that no appeal has been filed by the revenue in respect of the relief allowed by Ld. CIT(A). 6. Various arguments were raised by the Ld. A.R. regarding this contention that no income is assessable in the hands of the assessee but ultimately it was his submission that the rate of 5% adopted by Ld. CIT(A) for commission income of the assessee is on very much higher side. 7. As against this, Ld. D.R. supported the order of Ld. CIT(A). 8. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that this issue in dispute was decided by Ld. CIT(A) as per para 6.5 and 6.5.1 of his order and for the sake of ready reference, the same are reproduced below: I have carefully considered the submissions of the appellant, the orders of the A.O. for the years under reference a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious years signals that appellant was indirectly associated with such financing activities and had financial gains from such continuous and huge number of transactions. Even though the appellant appears to be earning commission on the cheques, drafts, pay orders etc issued to Indian Oil Corporation and Gas Authority of India Ltd, the commission received by him was not recorded in the books maintained by him. The fact that he is not recording the commission in his books cannot exonerate him in light of the material found by the AO, where in the finance companies concerned recorded his name as facilitator for issuance of cheques, drafts, pay orders etc. No body indulges in such a voluminous transaction for charity. The commission charged or received from the parties concerned has not been recorded for the obvious reasons that such transactions were in cash. It may also be noted here that purchase of drafts, cheques, pay orders etc., were against payment of cash. In view of the facts, circumstances and preponderance of probabilities, I am in agreement with the view of the AO for A.Y. 2000-01 that the net commission income be treated as 5% of the amount of the drafts/pay order transac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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