TaxTMI 
TaxTMI 
2015 (9) TMI 1169
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....g to the issue are stated in brief. The Revenue carried out the search and seizure operation under section 132(1) of the Act in the hands of the assessee on 22.01.2009. During the course of search proceedings, it was noticed that the assessee has claimed expenditure in respect of commission paid to two parties namely (a) M/s Nischal Corporate Services Private Limited and (b) M/s Twinkle Vanijya Pvt.Ltd. The first party was paid a sum of Rs. 2 crores in the year relevant to the assessment year 2007-08 and the second party was paid a sum of Rs. 1.5 crores in the year relevant to the assessment year 2008-09. The assessee had paid the commission by way of cheques and also had deducted tax at source. The recipients had also collected service tax....
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....ceived cash against the cheque so given and accordingly contended that the commission payments were genuine. The assessee was asked to produce the persons who brought the work and the assessee also initially agreed to produce them. However, at the time of conclusion of the sworn statement, he expressed his inability to produce those parties and accordingly agreed to offer the above said commission payments as his income, in order to buy peace of mind. The assessee also filed returns of income for both the years declaring the above said amount as his income and the same was also accepted by the AO. 5. The AO initiated penalty proceedings in both the years under consideration and accordingly levied the penalty u/s 271(1)(c) of the Act on the....
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.... these expenses to save or evade taxes. These are technical matters forwhich I have no answer at present and now they are adversely affecting my mental state and professional work. I have no time to spend on these matters as my professional assignments require more attention from me. Therefore, to buy my peace of mind and on the condition that there will not be any adverse consequences including penalty and/or prosecution I offer a sum of Rs. 4 crores as income which will take care of the alleged bogus payments, the excess and possible any other discrepancies in any payment and/or jewellery the year wise breakup of the additional income being offered is as under: Financial Year Asstt.Year Amount (Rs.In lakhs) 2006-07 2008-09 200 2007....
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....ional income declared by the assessee for AY 2007-08 was Rs. 47.30 crores and for AY 2008-09 was Rs. 69.56 crores. This shows the level of operation of the assessee. We notice that the assessee has been repeatedly claiming before the search officials that the commission payments were genuine and further, if had been accommodation bills, he should have received corresponding amount by way of cash. He has repeatedly submitted that he did not receive any cash and the said submission is also corroborated by the fact that the revenue did not unearth huge amount of cash during the course of search. 10. Further, we notice that the assessee had surrendered the commission expenses at the conclusion of the sworn statement and he has clearly stated t....
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....ts were genuine. In support of the same, the assessee has stated that the payments were made by way of cheque, TDS were deducted and the service tax was also paid. Hence, in our view, it cannot be said that the explanation of the assessee was found to be false. Though the AO has expressed the view that the admission of the assessee proves malafides, we are of the view that the explanation of the assessee was not proved to be not bonafide one. It is not the case of the assessing officer that the assessee has failed to furnish all facts and material relating to computation of income. Accordingly, we are of the view the deeming provisions of Explanation-1 shall also not apply to the assessee. 12. The Ld A.R invited our attention to the copy o....