TMI Blog2018 (2) TMI 1591X X X X Extracts X X X X X X X X Extracts X X X X ..... n the survey report, it is an admitted fact that in this kind of transactions the entry provider will derive certain benefits for issuing accommodation entries. AO has rightly estimated reasonable percentage of commission on total accommodation entries provided by the assessee. Though the assessee claims that the commission estimated by the AO is on higher side he failed to justify the gross profit declared in his business in the earlier years with any other comparable case. Therefore, we are of the view that the AO was right in estimating 3% commission on total accommodation entries - Decided against assessee. - ITA No. 1809/Mum/2017 - - - Dated:- 21-2-2018 - Shri Joginder Singh, Judicial Member And Shri G. Manjunatha, Accountant Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed calling for return of income within 30 days. However, there was no compliance from the assessee. Thereafter notices under Section 143(2) and 142(1) of the Act were issued. In response to the notices Authorised Representative of the assessee appeared from time to time and furnished details as called for. During the course of assessment proceedings the AO noticed that in the course of survey proceedings conducted in the group cases of SRM Group of companies, they have admitted that they have obtained accommodation entries from certain parties and also accepted their tax liability before the Intelligence Wing and paid applicable tax on the whole hawala purchases. Based on the information, the AO called upon the assessee to furnish necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gross profit declared by the assessee in his business wherein he has derived gross profit of less than 1%. Therefore, he requested to reduce the gross profit by 1% of the total accommodation entries. The CIT(A), after considering the submissions of the assessee and also relying upon the decision of the Hon'ble Madras High Court in the case of Coimbatore Spinning Weaving Co. Ltd. vs. CIT (1974) 95 ITR 375, observed that the aspect of substandard morality so openly professes and admitted is astonishing and shocking to say the least. Thereafter to plead that the profit rate on the alleged practice which is unethical and illegal should be reduced to a particular percentage is taking things a bit too far. The CIT(A) further observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of survey proceedings. The AO has estimated a commission of 3% on total circular transactions. It is the contention of the assessee that commission estimation by the AO is on the higher side when compare to the nature of business and also his gross profit admitted in the earlier years wherein he has derived the GP of less than 1%. The assessee further contended that under similar set of facts the ITAT Mumbai D Bench has directed the AO to estimate the commission at 1% on the total accommodation entries. Having heard both the sides and considering the material on record, we do not find any merit in the arguments of the assessee for the reason that the assessee himself has admitted before the Investigation Wing that he is invol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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