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2016 (10) TMI 1129

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..... ITAT MUMBAI ] 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. - Decided in favour of assessee. - ITA No.698 & 709/MUM/2015 - - - Dated:- 21-10-2016 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER For The Assessee : Shri Mukesh Chokshi For The Department : Shri Rajesh Ojha - DR ORDER PER C.N. PRASAD, JM Both these appeals are filed by the assessee against the common order of the ld. CIT(A)-38, Mumb .....

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..... 3) read with section 153C of the Act were made for Assessment Years 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 Assess .....

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..... alt with by the Tribunal in the case of Mihir Agencies Pvt. Ltd., Mr. Mukesh Choksi (supra), wherein the penalty levied under section 271(1)(c) of the Act has been deleted. Ld. Representative for the assessee pointed out that the Tribunal has duly noted that the difference between the assessee and the Revenue was primarily on the estimation of income earned from providing of accommodation entries and, therefore, the same would not be exigible for penalty under section 271(1)(c) of the Act. In this context, he has referred to the following discussion in the order of the Tribunal dated 27/07/2016 (supra):- 6.We have heard the rival submissions and produce the material before us. We find that case under consideration an action u/s .1 .....

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..... he 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 seized documents, based his assessment order on the limited documents provided and rejected the book results declared by the assessee. He estimated the income of the assessee at ₹ 61,00,000/-.He also initiated penalty proceedings separately. The FAA estimated the total income of the assessee at ₹ 1,02,980/-.The Tribunal confirmed this order. The AO observed that the profit .....

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..... of the assessee. 5. The Ld. Departmental Representative has not disputed the factual matrix brought out by the Ld. Representative for the assessee, though he has defended the levy of penalty under section 271(1)(c) of the Act. 6. We have carefully considered the rival submissions. It is abundantly clear that modus operandi and the nature of income earned by the assessee, which has been subjected to the penal provisions of section 271(1)(c) of the Act in the instant case, are similar to those considered 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 R .....

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