TaxTMI 
TaxTMI 
2018 (10) TMI 189
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..... 87,78,850/- by sustaining the NP rate of 3% of total undisclosed bank transactions, without giving any basis for such arbitrary estimation made by the ld. A.O. 3. That the assessee craves leave to add, urge, alter, modify and withdraw any ground/grounds before or at the time of hearing of the appeal." 3. At the time of hearing, the ld. counsel for the assessee filed the revised/amended ground of appeal No.1 which reads as under :- "On the fact and circumstances of the case & in law, the ld. CIT(A) has erred in confirming the action of ld. A.O. of applying profit rate of 3% on the alleged undisclosed bank transactions (i.e. of Rs. 29.26 crores) of 'cheque discounting business', instead rate of 0.25% (i.e. Rs. 2,20,000 on Jila Sahakari Bank a/c) & 0.33% (i.e. Rs. 6,70,000 on SBI a/c) as surrendered by the assessee u/s 131 before the ld. A.O. by giving 'affidavits' in this respect, more so, both the authorities have not mentioned any legal/admissible basis or any reference for making such arbitrary, wild estimation, hence, Rs. 8,90,000 (i.e. 0.30%) may kindly be accepted and Rs. 78.88 laksh may kindly be deleted." 4. Referring to the decision of Hon'ble Apex ....
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....se of unearthing of undisclosed bank account operated by the appellant with account no. CA 39356 with Jilla Sahakari Bank, COD Branch and account no. CA-30483331697 with the State Bank of India, and verifying the transactions carried through these accounts. The appellant claimed that transactions in the said accounts were related to his activities as commission agent and he had offered three percent of the transaction as his income. This claim of the appellant was demolished by the assessing officer as can be seen in Para-2.1 above. The appellant claims that books of accounts of the appellant did not include these two accounts, but the transactions of trading in rice carried out through these bank accounts were genuine which he carried out as commission agent and earned income of Rs. 6,70,000/- in FY 2010-11, Rs. 6,31,628/- in FY 2011-12 and Rs. 7,17,415/- in FY 2012-13. The assessing officer made enquires u/s 133(6) from the second parties to these transactions and established that the perported transactions never happened. The assessing officer then made enquiries from transport authorities to bring on record the facts that the vehicles perportedly used by the appellant ....
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....unts mentioned by the Assessing Officer in the assessment order. However, it is also a fact that the assessee has earned only commission income from such transactions. He submitted that the Assessing Officer, in the instant case, has estimated the commission income at 3% which has been upheld by the ld. CIT(A). However, such commission income cannot exceed 0.20%. Referring to the decision of the Mumbai Bench of the Tribunal in the case of M/s. Alembic Securities Pvt. Ltd. vs. DCIT vide ITA No.243 to 245/Mum/2013 order dated 30.09.2016 for assessment years 2006-07, 2010-11 & 2009-10 respectively, he submitted that under identical circumstances the Tribunal upheld the order of the ld. CIT(A) and estimated the profit rate 0.15% as against profit rate of 0.20% adopted by the Assessing Officer. 10. Referring to the decision of the Mumbai Bench of the Tribunal in the case of DCIT vs. M/s. Chaitali Sales Agency Pvt. Ltd. vide ITA No.4908 & 4910/Mum/2016 order dated 17.05.2017 for assessment years 2009-10 & 2011- 12 respectively, he submitted that the Tribunal in the said decisions has upheld the order of the ld. CIT(A) in restricting the profit under identical circumstances at 0.15% as....
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....e Assessing Officer rejecting the claim of the assessee that it had received commission income only on cheque/bill discounting which is about 0.20% to 0.30% of the transactions made addition of Rs. 87,78,850/- to the total income of the assessee by estimating the profit at 3% on such transaction appearing in the above two undisclosed bank accounts. It may be pertinent to mention here that the assessee before the Assessing Officer had offered 0.30% commission income after deducting certain expenses/commission expenses to sub-brokers and other intermediaries involved in the cheque discounting business which was rejected by the Assessing Officer. We find the ld. CIT(A) upheld the action of the Assessing Officer, the reasons of which are already reproduced in the preceding paragraph. It is the submission of the ld. counsel for the assessee that in cheque/bill discounting business the profit cannot exceed more than 0.30% and since the assessee has already offered such profit during the course of assessment proceedings, therefore, the same should be accepted and no further addition is called for. It is the submission of the ld. DR under the facts and circumstances of the case the addi....