Tribunal sets 0.50% commission rate in illegal activities appeals, excludes profit elements

The Tribunal disposed of multiple appeals against separate orders for different Assessment Years involving the determination of commission rates in clandestine activities. The Tribunal found the appellants engaged in illegal activities and established a 0.50% commission rate as reasonable. It directed Assessing Officers to exclude profit elements in intra-group transactions and compute profits only from external transactions. The appeals were partly allowed, and Assessing Officers were instructed to charge interest under the law. The Tribunal's decision was issued on 23.01.2019.

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Issues:
Multiple appeals against separate orders for different Assessment Years involving determination of rate of commission in clandestine activities and charging of interest under relevant provisions of the law.

Analysis:
The appeals were filed against the orders of the first appellate authority for respective Assessment Years. The facts in issue were deemed identical across all appeals, leading to the consideration of only one appeal for argument purposes. The Tribunal decided to dispose of all appeals through a common order for convenience. The appeals were divided into those against Assessing Officers in Delhi Charges and Noida Charge, with differing rounds of litigation. The Tribunal had previously directed the Assessing Officer to reconsider the rate of commission based on the material and precedence. The Assessing Officers adopted varying rates of commission based on rough notings, leading to a dispute over the alleged commission earned from providing accommodation entries.

The Tribunal acknowledged the appellants' engagement in illegal activities of providing accommodation entries and emphasized the lack of precedence in such cases. Despite loose sheets indicating commission rates, their evidentiary value was questioned. The Tribunal cited the Hon'ble Supreme Court's stance on the trustworthiness of entries in determining liability. The Tribunal also considered the statement of a key individual regarding the commission rate charged for accommodation entries. Relying on previous decisions, the Tribunal determined 0.50% as a reasonable rate of profit/commission in such clandestine activities.

Furthermore, the Tribunal directed the Assessing Officers to exclude profit elements in intra-group transactions and compute profits only from transactions with outside parties. The appeals were partly allowed on common grounds, and the Assessing Officer was instructed to charge interest under relevant provisions of the law. In conclusion, all the appeals were disposed of, and the order was pronounced on 23.01.2019.

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