TMI Blog2017 (2) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... available Assessing Officer. Hence, Assessing Officer cannot state that assessee failed to substantiate the claim. So, the deduction claimed by assessee is requested to be allowed. - Decided in favour of assessee. - ITA No.2595 to 2600 /Mum/2015 - - - Dated:- 3-2-2017 - S/Shri. D.T. Garasia, Judicial Member Ashwani Taneja, Accountant Member For the Appellant : Shri Vimal Punmiya, CA For the Respondent : Shri M.C. Omi Ningshen ORDER PER BENCH: 1. All the appeals are filed by the assessee against the order of CIT(A) dated 22.01.2015 for the assessment years 2003-04 to 2008-09. 2. In all these appeals the common first ground is that CIT(A) is not justified in performing the penalty u/s.271(1)(c) for assessment years 2003-04, 2004-05, 2005-06, 200607, 2007-08 and 2008-09. 3. The short facts of the case are as under. In all appeals penalty u/s. 271(1)(c) has been levied vide order dated 05.03.13. The assessee is a trader in fabrics but on survey u/s.133A it was found engaging only in issuing accommodation sale bills. The assessment in all these cases were completed and income was assessed as per the detail as under: Sr.No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (369,971) (232,182) 4,669,178 4,367,911 4,420,690 5,173,179 7,029,440 4,411,462 Unexplained cash loan - - - 14,000,000 - - Total additions 32,51,725 46,69,178 4367911 44,20,690 1,91,73,179 70,29,440 44,11,462 The Assessing Officer has levied the penalty and CIT(A) is confirmed the same. 4. During the course of hearing ld.A.R. of the assessee has submitted before us that in the case of assessee for assessment years 2002 03 to 2009 10 in ITA No.5029 to 5036/Mum/2014 the tribunal has decided the quantum appeal and whereas the tribunal has allowed the appeal of the assessee and the addition which was estimated by the Assessing Officer at commission at the rate of 7% on sales and further 5% of there was allowed as expenses. Thereafter the matter is decided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessees, it has become amply at that in these type of activities brokers are only a concerned with their commission on the value of the transactions. Now the question comes what would be the reasonable percentage of commission on the total turnover? The assessee has also made out a case that the customers do not come directly to him and they come through a sub-broker who also charges a particular share of commission. In all the judgments what has been stated his that an average percentage of commission these between.15% to .25%. In the case of Polrestia . Co (supra) and Kiran and Co. (supra), the Tribunal has considered reasonableness of percentage of commission to be earned on turnover was at .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 cases of Palresha Co. (supra) and Kiran Co. (supra), in similar type of projections. The theory of the Assessing Officer to treat the entire deposit as unexplained cash credits, cannot be accepted in the light of assessment orders in the case of beneficiaries and also in the light of the fact that assessee is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e grounds of appeal of the assessee. We respectfully following the same we delete the penalty. 6. In case of ITA No.2598/Mum/15 the additional ground for levying the penalty which reads as under: The learned commissioner of Income Tax (Appeal) erred in facts and law in confirming the action of the Assessing Officer and sustaining the penalty levied on the alleged unexplained loan of ₹ 1,40,00,000/- based on own his surmises and conjectures ignoring the material evidences on record. 7. The short facts of the case that during the course of assessment proceedings AO added amount of ₹ 1,40,00,000/- being unexplained cash loan which was received by the assessee. The Assessing Officer found that assessee during the course of survey, assessee has stated that he has issued various cheques amount to ₹ 1,51,00,000 on various dates and in reply to these assessee submitted that he has financed ₹ 1,40,00,000/- about three years back. But it is not paid back, though he has given cheques worth of ₹ 1,29,00,000/- as security. Therefore he has never returned the loan in cash and accounts for the cheque which was drawn had no sufficient balances. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Madanlala Bagrecha doing the business of cheque discounting. These cash were required to be paid to assessee purchase parties at Bhiwandi for getting goods purchases. Mrr. Madanalal Bagrecha had intentionally withhold this amount for which assessee had lodged an official complaintwith concern Police department and financial crime department. (Refer Page No.SS to 91 of paper book) . Thus, it was a business loss of assessee which required to be allowed to assessee. Assessing Officer and CIT(A) observed that assessee had given cash loan of ₹ 1,40,00,000/ - to Shri Madanlal Bagrecha and source of same was unexplained. Hence, they made addition of ₹ 1,40,00,000/- u/s.69A of the Act. The stand of assessee has been that it is a business loss and required to be allowed and same should not be added because assessee had given advances in normal business practice which was lost. Hence, it was submitted to the case where assessee suffered from loss. Hence, it was a business loss and required to be allowed instead of making addition of the same.In this regard, assessee placed reliance on the decision of Vijayashanthi Builders Ltd. vs. JCIT [2016] 69 taxmann.corn 31(Chennai Tir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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