TaxTMI 
TaxTMI 
2023 (11) TMI 736
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.... held that based on the reasons recorded, the entire assessment order is void-ab-initio and invalid. 3. The ld. CIT(A) has grievously erred in confirming the addition to the extent of Rs. 12,31,999/- out of total addition of Rs. 13,07,387/- made by the AO on account of disallowance of expenditure claimed against gross commission income while allowing only 5% of the expenditure claimed. 4. The ld. CIT(A) has ignored the fact that in case of similar business of cheque discounting in case of the group company Jalaram Finvest Limited, the same AO has accepted the net profit in the range of 9.50% to 12.50% of the gross commission income. Hence, estimation of 95% net profit by the ld. CIT(A) without any evidence or comparable case brought on record is illogical and bad in law. 5. The ld. CIT(A) has erred in ignoring and/or not considering the appellate order of ld. CIT(A)-11, Ahmedabad rendered in case of other assessee's of the group on identical facts, observations and findings as made in case of the appellant." 3. These are 27 appeals for various Assessment Years starting from 2009-10 till 2014-15 by six assessees in respect of search action carried out i....
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....yalal I. Thakkar stated that the persons having post dated cheques and who need cash/DD/RTGS etc. immediately give him crossed bearer cheques. Against such cheques, he provides them cash/DD/RTGS etc. through his concerns. Similarly those who are having cash and need RTGS/DD/Cheque against cash, they are provided RTGS/DD/.Cheque through bank accounts of his concerns. For both type of work, commission is received. Generally work comes through small shroffs and the cash is not deposited in their bank accounts because cash received is given to customers who need cash against discounting of cheque. Reply to question no.14 of the statement under section 132(4) of the Act dated 16.01.2014, Dahyalal I. Thakkar was also asked about maintaining of records of such transactions for which the said Dahyalal I. Thakkar submitted that entry of commission received is made in the books. After taking cognisance of the statement of Dahyalal I. Thakkar, the Assessing Officer observed that Dahyalal I. Thakkar is in the business of cheque discounting through various benami concerns in the name of various employees including the assessee as well as in the name of M/s. Jalaram Finvest Limited, a flagship c....
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.... of 95% net profit by the CIT(A) without any evidence or comparable case is bad in law and illogical. The Ld. AR further submitted that the cash in the present case is accounted and the same was taken into account by the Assessing Officer and, therefore, expenditure to cost the business of cheque discounting for which the commission has been paid by the assessee has to be considered on the basis of 5% and not that of 75% of net profit. The Ld. AR further submitted that in case of Dahyalal I. Thakkar, the CIT(A) has taken the view that 25% net profit has to be taxed and, therefore, the Revenue is taking a different stand in each case. 7. As regards to the other appeals are concerned, the chart given by the assessee in various matters including ITA No.1367/Ahd./2018 is reproduced herein below :- Details of addition made in the case of Girish Thakkar Name F.Y. 2012-13 F.Y. 2013-14 A.Y. 2013-14 A.Y. 2014-15 Appellant's Facts 1 Gross Commission Income offered by the appellant in his P&L 15,483 7,80,698 2 Other Commission Income 1,98,800 - 3 Less: Expenses claimed by the appe....
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....ed 13,30,043 2,54,234 12,79,757 13,95,540 2,69,118 11 Total of Addition [9+10] 13,30,043 2,54,234 12,79,757 13,95,639 2,69,118 12 Deduction claimed u/s 80C not considered (3,000) (3,600) (6,200) (3,388) (3,388) 13 Additional Commission income not considered by the AO 1,95,014 - - - 1,16,000 14 Net Addition made in the assessment order [11-12-13] 11,38,029 2,57,834 12,85,957 13,99,027 1,56,506 CIT(A) Action 15 CIT(A) allowed expense @ 5% of commission [5% of amount shown in 6] 73,927 20,862 73,213 91,496 18,303 Addition Confirmed by CIT(A) 10,64,102 2,36,972 12,12,744 13,07,531 1,38,203 Details of addition made in the case of Naresh Senma Name F.Y. 2009-10 F.Y. 2010-11 F.Y. 2011-12 F.Y. 20012-13 F.Y. 2013-14 A.Y. 2010-11 A.Y. 2011-12 A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15 Appellant's Facts 1 Gross Commission Income offered by the appellant in ....
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....950 2,48,952 1,60,000 1,80,000 1,88,245 1,93,236 AO's Action 5 Income assessed in the order by the AO [Gross Commission] 11,86,356 20,30,443 14,24,510 9,84,388 5,56,189 68,371 6 Less: Credit Given for Returned Income 1,38,950 2,48,952 1,50,000 1,80,000 1,88,245 1,93,236 7 Net Addition made in the assessment order [5-6] 10,47,406 17,81,491 12,64,510 8,04,388 3,67,944 (1,24,865) 8 Addition on account of difference in commission income 28 226 - (1) - - 9 Addition by way of disallowance of expense claimed 10,47,378 17,81,265 12,64,510 8,04,389 3,67,944 1,25,735 10 Total of Addition [8+9] 10,47,406 17,81,491 12,64,510 8,04,388 3,67,944 1,25,735 11 Additional Commission income not considered by the AO - - - - 2,50,600 12 Net Addition made in the assessment order [10-11] 10,47,406 17,81,491 12,64,510 8,04,388 3,67,944 (1,24,865) CIT(A) Actio....
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..... 2008-09 F.Y. 2009-10 F.Y. 2010-11 F.Y. 2011-12 A.Y. 2009-10 A.Y. 2010-11 A.Y. 2011-12 A.Y. 2012-13 Appellant's Facts 1 Gross Commission Income offered by the appellant in his P & L 2,24,041 23,44,987 8,65,122 51,635 2 Other Commission Income 56,000 - 1,74,000 3 Less: Expenses Claimed by the appellant in P & L 1 36 291 17,00,487 6,85,122 25,635 4 Net Income offered in Return [1+2-3] 1,43,750 4,44,500 1,80,000 2,00,000 AO'S Action 5 Income assessed in the order by the AO [Gross Commission] 2,24,041 21,44,987 8,65,122 51,635 6 Less: Credit Given for Returned Income 1,43,750 4,44,500 1,80,000 2,00,000 7 Net Addition made in the assessment order [5-6] 80,291 17,00,487 6,85,122 - 8 Addition on account of difference in commission income - - - - 9 Addition b....