TMI Blog2023 (2) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion in this case @ 0.5% as against 1.80% as made by the authorities below. Appeal of the assessee is partly allowed. - ITA No. 953/Del./2020 - - - Dated:- 6-2-2023 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER And SHRI ANUBHAV SHARMA, JUDICIAL MEMBER FOR THE ASSESSEE BY : SHRI AMOL SINHA, ADVOCATE SHRI NITIN GULATI, ADVOCATE FOR THE REVENUE BY : SHRI JITENDER CHAND, SR. DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal filed by the assessee is directed against the order of the ld.CIT(Appeals)-37, New Delhi dated 30.01.2020 and pertains to AY 2015-16. 2. The grounds of appeal taken by the assessee read as under:- 1. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in, dismissing the appeal in cryptic manner and by way of non speaking or reasoned order. 2. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner-of Income Tax (Appeals) grossly erred in confirming the action of Ld. Assessing Officer discharging the onerous dut of delivering justice with a fair mind in the wake of evidences produced and submitted by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross Total 2,60,56,44,696 Less : Amount already taken in revenue from operations 32,30,050 Net Total 2,60,24,14,646 4. AO referred that Jain Brothers have been established to provide accommodation entry and charging commission @ 1.8%. Hence, he held that the assessee s total turnover is taxed @ 1.8% which came to Rs.4,68,43,464/- (1.8% of Rs.2,60,24,14,646/-). 5. Upon assessee s appeal, ld. CIT (A) confirmed the addition made by the AO. 6. Against this order, assessee is in appeal before us. We have heard both the parties and perused the records. 7. Ld. Counsel of the assessee submitted that assessee is not denying that assessee has been engaging in bogus accommodation entries. However, submitted that in some of the parties in the AO s list itself, the commission income has been estimated at 0.50% by the AO himself. For this purpose, he also referred to ITAT decisions in which case profit has been estimated @ 0.5% of the turnover and one of these orders was confirmed by Hon ble Delhi High Court. The brief submissions by way of table by the ld. Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned above. Relevant finding by the Hon ble ITAT [@Page 19, 20 21 (Para 5] [@Page 23 (Right above Para 8] of the paper book 8. Per contra ld. DR for the Revenue relied upon the orders of the authorities below. 9. Upon careful consideration, we note that assessee is not denying that bogus accommodation entries have been provided but assessee s claim is that assessee is earning 0.5% commission as against 1.8% taxed by the authorities below. For this purpose, in the submissions chart submitted by the assessee, reproduced above, it is noted that AO himself has estimated 0.5% rate of commission in some cases. Similarly, ITAT in the case of Adonis Financial Services Pvt. Ltd. in ITA No.6507/Del/2015 vide order dated 23.01.2019 held as under :- 8. There is no dispute that the appellants were engaged in clandestine activities in the illegal business of providing accommodation entries to the beneficiaries. The beneficiaries purchased cheques from the appellants by paying cash. We are of the considered opinion that in such illegal activities, there cannot, and should not be any precedence. However, the Assessing Officer has referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 132(4) of the Income tax Act, 1961 has categorically stated that the rate of commission charged on accommodation entries provided through various companies was 0.25%. 13. However, the statement of Shri Tarun Goyal recorded u/s 132(4) of the Act can be a good piece of evidence in the case of Shri Tarun Goyal only. 14. The ld. counsel for the assessee also relied heavily on various decisions of the co-ordinate bench wherein the Tribunal has adopted rate ranging from 0.15 paise to 0.50 paise i.e 0.15% to 0.50%. 15. As mentioned elsewhere, in such illegal activities, there cannot be any precedence and the rate varies from facts of each case. 16. To put an end to the litigation and in the interest of justice and fair play, in our considered opinion, 0.50 paise or 0.50% should be taken as the reasonable rate of profit/commission in such clandestine activities. We, accordingly, direct the Assessing Officers to adopt 0.50% or 0.50 paise and compute the profit accordingly. 17. We are of the opinion that there cannot be any profit element in intra-group transactions. We, therefore, direct the Assessing Officers to consider the transactions with outside partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntage of commission was 1.69% to 2.5% in some transactions, it cannot be presumed that for all transactions the respondent had earned a similar rate of commission. 8. Further relying upon past decisions by a number of Coordinate Benches of the Tribunal adopting a commission rate ranging from 0.15% to 0.50%, in similar matters, the Tribunal passed the impugned order. 9. This Court is of the view that none of the aforesaid findings are so perverse that they warrant an interference in appeal jurisdiction under Section 260A of the Income Tax Act, 1961. This Court is also of the view that the Tribunal, being the last fact finding authority, was entitled to guess work and arrive at a ballpark rate of commission. Consequently, no substantial question of law arises in the present appeals. Accordingly, the appeals along with pending applications are dismissed. 10. From the above, we note that in several cases, ITAT has estimated the earning of commission @ 0.5% in the bogus accommodation entry business. Several ITAT orders have been referred above. It is not the case that any of them has been reversed by Hon ble jurisdictional High Court. Rather we have an example in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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