2012 (10) TMI 1133

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..... However, it was found that the assessee was only doing Hawala business in iron and steel without any actual delivery of goods. The assessee was thus showing purchase and sale entries on which he was earning commission. There is no dispute raised in this appeal that the assessee was doing the Hawala business. The only dispute is regarding the computation of income from Hawala business. The assessee had declared the total turnover of Rs. .4,66,42,149/- from the Hawala business. The expenses claimed by the assessee were Rs. .4,01,682/- on account of administrative expenses and Rs. .1,17,440/- on account of sale promotion, brokerage and warehouse charges and Rs. .1,04,703/- on account of interest, which is clear from the copy of the P & L acc....

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....ned order, the A.O. allowed the administrative expenses at Rs. .3,52,721/- against the claim of Rs. .4,01,682/- after disallowing certain expenses on estimate amounting to Rs. .48,961/-. The A.O. also allowed the depreciation of Rs. .21,604/- and preliminary expenses of Rs. .950/- and computed the total income at Rs. .91,150/-. The assessee disputed the decision of the A.O. to disallow the expenses on estimate basis and also regarding the disallowance of interest of Rs. .1,04,703/-. The CIT(A) confirmed the disallowance of expenses on estimate and regarding the claim of interest expenses, the CIT(A) observed that the A.O. had not disallowed the same and, therefore, rejected the ground raised by the assessee. Aggrieved by the said decision, ....

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.... charges and Rs. .1,04,703/- as interest expenses. The Tribunal in the first ground of appeal in the order dated 16.11.2005 in ITA No.4319/M/03 had directed the A.O. to allow the deduction towards statutory payments, expenditure on interest and office expenses from the estimated commission income at the rate of 1%. The A.O. however, had allowed the expenses only to the tune of Rs. .2,29,344/-. The assessee raised the dispute and the matter again reached the stage of the Tribunal and the Tribunal in the order dated 11.09.2008 in ITA No.6060/M/07 held that the assessee would not be entitled to commission, sale promotion and warehousing expenses, but all the remaining expenses for running of the office including office renovation had to be all....