TMI Blog2016 (10) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... ate basis. - ITA No. 1000 to 1003 & 1005/MUM/2013, ITA Nos. 924 & 928/MUM/2015 - - - Dated:- 28-10-2016 - SHRI C.N. PRASAD, HON BLE JUDICIAL MEMBER AND SHRI N.K. PRADHAN, HON BLE ACCOUNTANT MEMBER For The Assessee : Shri M.M. Choksi CA. For The Department : Shri Alok Johri - DR ORDER PER BENCH All these appeals are filed by the assessee against the common order of Commissioner of Income Tax (Appeals), for the Assessment Years 2005-06 to 2008-09 2010-11 In sustaining the addition in estimating the Commission income and appeals for the Assessment Years 2004-05 2009-10 in sustaining the penalty levied u/s. 271(1)(c) of the Act. 2. The assessee has raised various grounds including the ground agitating that order passed by the Assessing Officer is without providing sufficient opportunity of hearing to the assessee. On merits, the assessee challenged the order of the Ld. CIT(A) in confirming the additions made by the Assessing Officer at 2% on gross deposits as against 0.15 offered by the assessee. At the time of hearing, the Ld. Counsel for the assessee submits that the Assessing Officer passed assessment orders in all these assessment years withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee are rendered on the facts of that particular case and the facts in the present assessee s case are not similar. Therefore he submits that those decisions may not be applicable and should not be followed. The Ld. Departmental Representative before us submitted written submissions running into 17 pages explaining the ratio of all those decisions and bringing out the distinguishing features according to him and submitted that since the decisions are not applicable, the same may not be followed. 6. We have heard the rival submissions, perused the orders of the authorities below. The Ld. Counsel for the assessee submitted that no proper opportunity was given and hence assessments should be set aside to the Assessing Officer for fresh adjudication and he further submitted that the issue in appeal is squarely covered by various decisions of the Co-ordinate benches wherein it was held that the commission income from the business of accommodation entries should be assessed at 0.15% as against 2% assessed by the Assessing Officer. Taking note of all the decisions and submissions of the Ld. Departmental Representative, we are of the view that the Assessing Officer should exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004-05 2008-09, wherein additions were made. Such assessment of income has been further affirmed by the ld. CIT(A). 5. During the course of search proceedings, the Revenue had noted that for providing accommodation entries, the entries like the assessee, which were controlled by Mr. Mukesh Choksi were earning commission income. In view of such modus operandi noted and the statements of Mr. Mukesh Choksi recorded at the time of search, the Assessing Officer notes that the group was earning commission ranging from 1.5% to 3.5% and accordingly he estimated the net commission income @ 2%. Accordingly, based on the total receipts reflected in the bank account, the Assessing Officer estimated the commission income @ 2%. This action of the Assessing Officer has since been upheld by the ld. CIT(A). 6. The assessee preferred appeal before the I.T.A.T. and the coordinate Bench of this Tribunal in quantum proceedings in ITA No. 6559 6563/MUM/2012 by following various decisions in similar facts, directed the Assessing Officer to re-compute the commission income at 0.15% instead of 2% applied by the Assessing Officer. The Assessing Officer levied penalty for the addition made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that there is difference of opinion as to how much income should be estimated for the hawala entries-the AO estimated at a particular percentage, whereas the assessee had shown the income at a different percent. The addition made by the AO and confirmed by the FAA in quantum addition may or may not be. But, levying penalty on the basis of an estimated addition could not be held to be justified. No authority is required to be cited that penalty and assessment proceedings are separate and distinct proceedings and the quantum proceedings should not result in automatic levy of concealment penalty. It is a case of estimation of income by the AO and the assessee. Here we would like to discuss two cases. One of the m is Aero Traders P. LTD.(322 ITR 316).In that case the assessee-company had filed its return of income for the year 1997-98 on a notice u/s.148 of the Act, 1961declaring a loss of ₹ 83, 64, 468/-.The assessee had, in the return attached a note stating that it was impossible for it to substantiate its claim of loss by way of any evidence as the relevant records were seized an d were with the police authorities. The AO after being unable to obtain copies of the sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered by the Co-ordinate Bench in the case of Mihir Agencies Pvt. Ltd., Mr. Mukesh Choksi (supra). It is also abundantly clear that in the present case also the variation in the quantum of income assessable between assessee and the Revenue is on account of estimation only, an identical situation which has been considered in the aforesaid precedents. Therefore, following the aforesaid precedents, which have been rendered in similar circumstances, we hereby set-aside the order of the CIT(A) and direct the Assessing Officer to delete the penalty imposed under section 271(1)(c) of the Act. Thus on this aspect, assessee succeeds. 7. Respectfully following the aforesaid decision, we delete the penalty levied under section 271(1)(c) in these cases, as the facts and circumstances being identical, as the commission income assessable in the hands of the assessee has been on estimate basis, no penalty is attracted on the additions/disallowances made on estimate basis. Respectfully following the said order, we delete the penalty levied u/s. 271(1)(c) of the Act in these cases also. 12. In the result, the appeals filed by the assessee for Assessment Years 2005-06 to 2007-08 and 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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