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M/s. Kaycee Shares Broking Pvt. Ltd. Versus The DCIT, Cen. Cir. 46, Mumbai

2016 (9) TMI 1384 - ITAT MUMBAI

Penalty levied u/s 271(1)(c) - estimation of income from the accommodation entries - Search and seizure under section 132(1) was conducted in the case of several companies, whose kingpin is identified as one Mr. Mukesh Choksi - Revenue had noted that for providing accommodation entries, the entries like the assessee, which were controlled by Mr. Mukesh Choksi were earning commission income - Held that:- In an identical facts and circumstances in the case of M/s. Kaycee Shares Broking Pvt. Ltd., .....

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favour of assessee. - ITA No. 19/Mum/2013, ITA No. 20/Mum/2013, ITA No. 21/Mum/2013, ITA No. 22/Mum/2013 - Dated:- 9-9-2016 - SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER For The Appellant : Shri Mukesh Choksi For The Respondent : Shri R.P.Meena ORDER PER G.S.PANNU,A.M: These four appeals are filed by the same assessee pertaining to assessment years 2007-08 to 2010-11 and involve certain common issues. Therefore, they have been clubbed and heard together and a consolid .....

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ated 08/12/2011. 3. In this appeal, assessee has raised multiple Grounds of appeal, which read as under:- Following grounds of appeal are without prejudice to each other: 1. On the facts and circumstances of the case the learned. Commissioner of Income Tax (Appeals) has erred in confirming the order of D.C.I.T, Central Circle-46. 2. The learned. Commissioner of Income Tax (Appeals) has erred in law and in facts in not appreciating the fact that the order is passed by the assessing officer withou .....

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ppeals) have erred in law and in facts in confirming the income on gross receipts without reducing the transfer entries amount in bank account MANAGED BY AGENTS from which no income is earned. 6. The learned. Commissioner of Income Tax (Appeals) has erred in law and in facts confirming the additions made by Assessing Officer at 2% on the gross deposits as against 0.15% offered by the appellant 7. The learned. Commissioner of Income Tax (Appeals) has erred in law and in facts in confirming the ac .....

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ax (Appeals) has erred in law and in facts by confirming the assessment made by Assessing Officer by ignoring the facts that no new assets have been generated or emerged out of the income during the last 10 years even after the detailed search carried out by the Income Tax department. 10. The learned. Commissioner of Income Tax (Appeals) has erred in law and in facts in confirming the act of Assessing Officer of the disallowance of business expenses against the income estimated. 11. The learned. .....

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A Nos.887/Mum/2012 & 2699/Mum/2013 order dated 30/11/2015. (ii) M/s. Mihir Agencies Pvt. Ltd., ITA Nos.6114-6120/Mum/2012 order dated 6/1/2016. (iii) Alliance Intermediateries and Network Pvt. Ltd., ITA Nos. 2700,2702&2701/Mum/2013 order dated 24/2/2016. (iv) Mr. Mukesh Choksi ITA Nos.833 -839/Mum/2013 order dated 04/05/2016. 5. In brief, the background of the dispute is that a search and seizure action under section 132(1) of the Act was conducted in the case of several companies, whose .....

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firmed by the CIT(A), against which the assessee is in appeal before us. 5.1 During the course of search proceedings, the Revenue had noted that for providing accommodation entries, the entities 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 accor .....

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Department on 25/11/2009. It is pointed out that in the aforesaid decisions, the Tribunal has accepted the stand of the assessee that commission income was liable to be assessed @0.15% of the total receipts and also the fact that the net income was to be assessed after allowing 50% of the expenses claimed. It was, therefore, contended that following the decisions of the Co-ordinate Benches rendered in the group concerns of Shri Mukesh Choksi referred above under similar circumstances, the asses .....

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h action and there is complete identity on facts. Therefore, it was contended that the said issue has already been decided in the aforesaid decisions, and the same ratio is applicable in the captioned appeals also. 9. We have carefully considered the rival submissions. We have also perused the respective orders of the authorities below and find that similar issue had come up before the Tribunal in the cases of Goldstar Finvest Pvt. Ltd.(supra), M/s. Mihir Agencies Pvt. Ltd.(supra), Alliance Inte .....

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e case of Goldstar Finvest Pvt. Ltd.(supra), wherein earlier precedents have been relied upon and the issue decided accordingly:- 5. We have gone through the orders of lower authorities and the orders of the co-ordinate bench of Tribunal in assessee s own case and other orders relied upon by the assessee. It is noted by us that identical issue had came up before the Tribunal in assessee s own case for the assessment year 2002-03. The relevant observations from the Tribunal s order are reproduced .....

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hare of commission. In all the judgments what has been stated is that an average percentage of commission is between 0.15% to 0.25%. In the case of Palresha & Co. and Kiran & Co (surpa), the Tribunal has considered reasonableness of percentage of commission to be earned on turnover was at 0.1%. The assessee himself has offered the percentage of commission at 0.15%, which is more than the percentage of commission considered to be reasonable by the Tribunal in the case of Palresha & Co .....

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e considered to be reasonable by the Tribunal in the case of Palresha & Co and Kiran & Co (supra), 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." 6. It is further noticed by us that this stand has been constantly accepted by the Tribunal in various orders, details of which have been given by the ld. Counsel, as mentioned above. We have gone through the orders as enclosed in the pape .....

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