9911796707
TMI Blog2019 (10) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... to dispose them off through a consolidated order for the sake of convenience. Facts being identical, we begin with the AY 2010-11. 2. The grounds of appeal filed by the assessee read as under: 1. On the facts and circumstance of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to levy penalty u/s 271(1)(c) after re-quantifying quantum additions as per the Hon'ble ITAT, Mumbai order dated 16.08.2017 2. On the facts and circumstance of the case and in law, the learned CIT(A) erred in confirming the penalty u/s 271(1)(c) was leviable in respect of estimated addition towards commission income on accommodation entries allegedly given by the assessee even though not admitted by assesse as such. 3. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the learned CIT(A) failed to appreciate that the Assessing Officer did not provide reasonable opportunities to the appellant to represent his case and make necessary submission in the matter, which is violation of the principals of natural justice. 3. In a nutshell, the facts of the case are that a search and seizure action u/s 132 of the Act was conducted in PPP group of cases on 25.08.2011 and 27.08.2011. The assessee is one of the persons belonging to this group. In response to notice u/s 153A issued by the AO on 08.02.2013, the assessee filed a return of income on 25.03.2013 admitting a total income of Rs. 3,17,360/-. In the assessment completed u/s 143(3) r.w.s. 153A dated 21.03.2014, the Assessing Officer (AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been levied, have been determined on estimate basis and therefore the corresponding penalty should not have been levied. From the facts of the case leading to the search action, the findings of the search action, the filing of return in response to notice u/s 153A and the subsequent assessment, it can be observed that the assessee was taking a chance by sitting on a fence. It is clear that the intention of the assessee was to take a risk and disclose a lesser income in his return of income than what he was actually earning. It is noted that the quantum of accommodation entries provided by the assessee has not been estimated but it is only the profit earned from providing of accommodation entries, which was estimated @ 3.5% by the AO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % estimated by the CIT(A). Thus the Ld. counsel argues that because of such variation from 3.5% to 2% and again to 1%, this is not a fit case for imposition of penalty u/s 271(1)(c) of the Act. 6. On the other hand, the Ld. Departmental Representative (DR) submits that the penalty has been levied by the AO on account of commission income on accommodation entries and addition on account of commission on sale and purchase bills. These could be detected only because of the search and seizure action conducted by the Department on the assessee. Further relying on the decision in Kalindi Rail Nirman Engg. Ltd. (supra), the Ld. DR submits that the order passed by the CIT(A) be confirmed. In his reply, the Ld. counsel submits that the decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate [email protected]% to 0.025%. In our opinion, the rate of commission for bogus transactions cannot be determined by applying rule of thumb. It depends upon so many factors like industry or business for which non genuine bills are issue, amount involved, type of entries provided etc. No two cases are similar. The entity availing facility of bogus bills sometimes contacts agents who in turn contacts hawala entry providers and it is possible that the beneficiary and the bogus bill provider may not know each other. In other cases, the bill provider may directly deal with beneficiary. Period of providing bogus bill is also one of the deciding factors. In short, many a factors affect the rate of commission. The Tribunal has, in the cases relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, that certain entries pertained to PPP group, that no inquiry was made in that regard. There is no doubt that unaccounted income has to be brought to tax. But, for taxing it quantification of such income is a legal precondition. When the assessee had taken a specific plea that all the credit and debit entries did not result in commission income the AO had to give a finding about such entries. The FAA also did not call for a remand report in that regard. Therefore, in the interest of justice, we are of the opinion that the issue should be restored back to the file of the AO for fresh adjudication, who would afford a reasonable opportunity of hearing to the assessee. The assessee would provide the details of entries- appearing in the bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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