TMI Blog2019 (5) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... ing facts to demonstrate that the same was given under any coercion or threat. Presumption of Section 132(4A) stood against the assessee and complete onus to negate the same was on assessee which has remain undischarged. All these factors do not inspire us to accept the submissions of Ld. AR that additions of the two entities were not justified in the hands of the assessee. Therefore, lower authorities, in our considered opinion, were quite right in making the impugned additions in the hands of the assessee, under the given circumstances. Estimation of rate of commission earned by the assessee on providing accommodation entries. - HELD THAT:- The chain of the transactions establishes that the assessee has received commission on three accounts viz. commission on import purchases made on behalf of other entities, commission on accommodation local sales bills provided to other entities and commission on entries of loans and advances being provided to certain beneficiaries. The commission on local purchases stated to be made by the two entities, under the circumstances could not be sustained. Nothing has been brought on record to suggest that the assessee has received commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6- 17 dated 01/12/2017 on certain common grounds of appeal. Since common issues are involved, we proceed to dispose-off the same by way of this common order for the sake of convenience brevity. ITA No. 298/Mum/2018, AY 2012-13 2. The grounds raised in AY 2012-13 read as under: - 1. On the facts and circumstances of the case and law the Ld. CIT (A) erred in confirming addition in hand of assessee merely basis on statement which is taken under pressure where M/s Abhayraj Gems Pvt Ltd and Rishabh Impex is regularly audited and maintained property books of account. 2. On the facts and circumstances of the case and law the Ld. CIT (A) erred in confirming addition on account of commission on loan where in the statement recorded on oath never mention that assessee earning commission on loan. Without any statement and evidences, addition made on presumption is bad in law. 3. On the facts and circumstances of the case and in law Ld. CIT(A) erred in adding the notional commission on unsecured loan treating the same as accommodation of bogus transaction @ 2.4% i.e. from M/s. Abhayraj Gems Pvt Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its group concerns were subjected to search proceedings u/s 132(1) on 03/10/2013. Consequently, the assessment for impugned AY was framed u/s 153A read with Section 143(3) on 31/03/2016 wherein the assessee s income was assessed at ₹ 31.60 Lacs after certain addition of estimated undisclosed commission for ₹ 29.99 Lacs as against returned income of ₹ 1.61 Lacs filed by the assessee on 18/10/2013. 3.2 In response to notice u/s 153A dated 21/07/2015, the assessee filed return of income on 20/08/2015 at the same figure of ₹ 1.61 Lacs as it was originally filed. It transpired that the assessee being a resident individual was one of the directors in a corporate entity namely M/s Abhayraj Gems Private Limited which was stated to be engaged in the business of trading of diamonds. 3.3 During assessment proceedings, a detailed show-cause notice dated 07/03/2016 was issued to the assessee, the relevant extract of which has already been reproduced in the quantum assessment order at para 2.3. In the stated notice, it was alleged that the assessee was operating and managing not only the above stated entity i.e. M/s Abhayaraj Gems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the observation of Hon ble Apex Court rendered in Sumati Dayal Vs. CIT [214 ITR 801] to support these observations / conclusions. It was also observed that the retraction was made by the assessee after a lapse of nearly 10 months and too, without any valid basis and the same was merely an afterthought and tutored statement. The provisions of section 132(4A) raising rebuttable presumption against the assessee were also noted in the light of various binding judicial pronouncements. 3.7 Finally, at para 6 of the quantum assessment order , Ld. AO came to a conclusion that it was conclusively proved with overwhelming direct and corroborative evidences that the assessee was engaged in providing accommodation entries through the two benami concerns. In the light of said conclusion, Ld. AO proceeded to estimate the commission income earned by the assessee against these accommodation entries. Since the two entities were being managed and controlled by the assessee, the estimated income of these two entities, in the opinion of Ld. AO, was to be clubbed / added in the hands of the assessee. Finally, the commission income was worked out on the basis of audited account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rishabh Impex to work out the estimated commission as against the finding of investigation wing that all the transactions were carried out for the purpose of accommodation entries and therefore, the sale reflected by these two concerns should have also been considered to arrive at the estimation of unaccounted commission income earned by the assessee. In other words, it was observed that the assessee s income was to be enhanced to the extent of estimated unaccounted commission earned on sales reflected by the two entities. Although the assessee agitated the enhancement, however, Ld. CIT(A) estimated commission of .075% against the same. 4.4 The Ld. AO had estimated allowable expenditure against unaccounted commission @10%. However, relying upon the appellate orders in similar cases decided at Surat, the said rate was enhanced to 25% and accordingly, the relief to that extent was granted to the assessee. Aggrieved as aforesaid, the assessee is in further appeal before us. 5. The Ld. Authorized Representative for Assessee [AR], drawing our attention to the documents placed in the paper-book, submitted that the assessee was merely a di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviding accommodation entries of varied nature through two name-sake entities without carrying out any actual business activity. The modes-operandi adopted by the assessee has elaborately been enumerated in the impugned order as well as in the statement given by the assessee. The incriminating material in the shape of Annexure A-1 to Annexure A-5 in respect to parallel accounts containing details of cash transactions etc. was found from the possession of the assessee which unequivocally corroborated the aforesaid statement. The Ld. AR has submitted that the statement was retracted but it is noted that the statement has been retracted after lapse of more than 10 months without any supporting facts to demonstrate that the same was given under any coercion or threat. Therefore, the presumption of Section 132(4A) stood against the assessee and complete onus to negate the same was on assessee which has remain undischarged. All these factors do not inspire us to accept the submissions of Ld. AR that additions of the two entities were not justified in the hands of the assessee. Therefore, lower authorities, in our considered opinion, were quite right in making the impugned additions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate orders dated 30/10/2017 passed in the case of Shri Bhanwarlal Jain for AYs 2008-09 to 2014-15 to submit that the additions, under similar circumstances, have been estimated on lower side. After perusal of the same, we find force in the submissions and therefore, we estimate the commission on import @0.2% and commission on sales @0.05%. Ground Nos. 5, 7 8 stand partly allowed. 7.5 By way of ground no. 9, the assessee is aggrieved by the fact that the allowance for expenditure has been provided only to the extent of 25% whereas the same, considering the nature of activities being carried out by the assessee, was on the higher side. The Ld. CIT(A) has estimated the expenses as 25% of unaccounted commission. However, the perusal of material on record reveal that the assessee had employed four persons during the year to carry out various transactions. One of the entities was a corporate entity for which additional expenditure has to be incurred to maintain the corporate personality. Keeping in view the same, we enhance the same to 50% of unaccounted commission. Ground No. 9 stands partly allowed. 7.6 As a natural consequence, in the above circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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