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TMI Blog2018 (9) TMI 1989X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in estimating of income of the assessee @ 2% as against 10% made by A.O. on the aggregate unexplained cash deposits in the bank accounts to tune of Rs. 22,49,45,749/- [Bank of Baroda to the tune of Rs. 15,63,62,398/- (in the name of Prop, of M/s. Asha Traders) and Bank of India to the tune of Rs. 6,85,83,351/- (in the name of Prop, of Shubham Corporation)], without appreciating the facts of the case. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored. 3. The grounds raised by the Assessee in C.O No.167/Ahd/2015/SRT read as follows: 1. The learned CIT '(A) grossly erred in confirming the addition to the extent of Rs. 21,77,721/- in respect of commission earned in giving the accommodation bills for labour charges. 2. The learned CIT (A) grossly erred in making addition of Rs. 42,30,327/- on account of draft / cheque discounting and RTGS facility. 3. The learned CIT (A) grossly erred in not gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the estimated commission income earned by the assessee from other sources as per provision of s. 56 of the Income Tax Act, 1961 (for short 'the Act') and in adding same to the income of the assessee. The ld. DR also submitted that the Ld. CIT (A) has erred in estimating commission @ 2% for giving accommodation entries on total turnover of Rs. 12,18,70,000/- by restricting the addition of Rs. 1,21,87,000/- made on account of giving accommodation entries for civil construction work to Rs. 24,37,400/-. 7. The ld. DR further submitted that the Ld. CIT (A) has not appreciated the facts that, the AO has rightly justified his estimation of commission @ 10% by rejecting books result u/s. 145(3) of the Act as the assessee failed to produce books of account, bills, vouchers as that accommodation entries can be of different types and the quantum of commission will depend on the nature of accommodation entries provided, the benefit derived therefrom and the logistics / paperwork etc., involved. The ld. DR submitted that the ld. CIT(A) has granted relief to the assessee without any justified reason and basis therefore, the impugned order may kindly be set aside by restoring that of the AO. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s too low to justify the nature of activities and the risk undertaken by the appellant. Considering the same, the commission in the case of the appellant for giving accommodation entries is estimated at 2% on Rs. 12,18,70,000/-. This translate to about 6.7% of the benefit derived by M/s Rosy Royal Minerals Ltd and therefore, is a reasonable estimate. As a result, the estimate made by the assessing officer at Rs. 1,21,87,000/- is reduced to Rs. 24,37,400/- subject to para 8 of this order. 11. On careful consideration of above rival submissions, at the very outset, we may point out that we are in agreement with the contention of the ld. DR that the facts and circumstances of the present case are dissimilar and different from the facts of the case of Shri Rameshchandra Rangildas Mehta (supra) as in that case the issue was pertaining to the income from the accommodation entries from fictitious contract receipts, whereas in the present case the issue is of accommodation entries of payment of labour therefore, ratio of the order of Tribunal in the case of Shri Rameshchandra Rangildas Mehta (supra) cannot be applied in favour of the assessee. So far as rejection of books of accounts is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Maheshbhai T. Patel (HUF) ITA No.2285/Ahd/2015/SRT for AY 2011-12 & C.O No.168/Ahd/2015/SRT are identical and similar, therefore our conclusion drawn for these cases, in the earlier part of this order, would apply mutatis mutandis to the ground No.1 of the Revenue and cross objection No.1 of the assessee, consequently, the same are also dismissed in the line of conclusion drawn by us in the earlier part of this order. Ground No.2 of Revenue and CO No.2 of the assessee: 14. Apropos these cross grounds, we have heard the arguments of both sides and carefully perused the relevant material placed on the record of the Tribunal inter alia, first appellate order and assessment order. The ld. DR submitted that the Ld. CIT(A) has erred in estimating of income of the assessee @ 2% as against 10% made by A.O. on the aggregate unexplained cash deposits in the bank accounts to tune of Rs. 22,49,45,749/- Bank of Baroda to the tune of Rs. 15,63,62,398/- (in the name of Prop, of M/s. Asha Traders) and Bank of India to the tune of Rs. 6,85,83,351/- (in the name of Prop, of Shubham Corporation)], without bappreciating the facts of the case. Supporting the assessment order, the ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual commission earned and actual profit in respect of different types of deposits may vary considerably in respect of individual transactions. The ld. AR has placed copies of the assessment orders of M/s. Shri Sai Corporation for AY 1995-96 to submit that the earning from cheques/draft discounting business is 0.02% to 0.10% and hence, estimation of income @ 2% is very excessive and the same may be reduced accordingly to a reasonable basis. 17. In our considered opinion, the contentions of the assessee M/s. Shri Sai Corporation before the AO for AY 1995-96 cannot be accepted as basis for the present case pertaining to AY 2011-12 to estimate income at very lower side as the assessee himself stated before the AO that income from this activity is 0.15% of total amount. In the present case, the deposits are not exclusively pertaining to discounting of cheques/DD business but there also some element of deposits pertaining to the appellant's own business of unaccounted turnover which cannot be ignored. The assessee has not submitted any segregation in this regard and revenue authorities have not also undertaken any exercise to segregate these two elements of the impugned cash depo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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