TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 748
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....ering that the assessee failed to disclose its actual commission income, leading to an under reporting of taxable income." 2. The appellant craves leave to add, alter, amend and or vary the grounds of appeal at or before the time of hearing. 3. Whether on the facts and in circumstances of the facts and in law, the Ld. CIT (A) erred in reducing the rate of commission earned on Letter of Credit (Learned CIT(Appeals)) from 1.28% as held and established in assessment order. 4. Whether the Ld. CIT (A) in its order has erred on relying and linking to the order u/s 245(D) of the ITSC in the case of M/s. Adam Smith Associates Pvt. Ltd. (ASAPL) whereas there is no order of ITSC in the case of assessee. 5. Whether the Ld. CIT (A) erred in arbitrarily reducing the rate to half of what was considered by ITSC in the case of M/s. Adam Smith Associates Pvt. Ltd. (ASAPL) reducing the rate of commission." 3. None appeared on behalf of the assessee at the time of hearing. Since the issue involved is simple, we proceed to decide the appeals after hearing the ld. DR of the Revenue and the material placed on record. 4. Brief facts of the case are, a search and ....
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....undi Amount, cash collected and distribution of cash to various parties. During the course of search and seizure, digital data and documents were found and seized. It was found that ASG is maintaining two parallel sets of accounting servers in its office premises i.e. one is the Tally Server that is used by ASG to show all the accounted income as per the books of accounts and other was the parallel set of books in software called LC Billing & Discounting (LCBD) System which is maintained in SQL. LCBD system had backend database in SQL format. The SQL system comprised of all the data (Booked/accounted and unbooked/unaccounted for domestic LCs facilitated by ASG from May, 2008 till September, 2016. From September, 2016 to till date, all the booked entries are maintained in tally server and the unbooked LCs are maintained in excel sheets by employees. Assessing Officer observed that analysis of data collected during the course of search and analysis of the seized material revealed that ASG is not booking part of income earned from facilitation of LC discounting in its books of account. It was found that commission on transaction of domestic LC discounting amounting to Rs. 4800 crores ....
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....substantiate the same. (e) Whether sample size considered for determination is valid/reliable. 8. Assessing Officer discussed these issues and the submissions of the assessee on this issue at pages 7 to 16 of the assessment order. Assessing Officer, after taking into account documents on record and submissions of the assessee held that average commission percentage of 1.28% is applicable to the LC discounting transactions carried out by the assessee during the year. Accordingly, Assessing Officer assessed the income of the assessee at Rs. 2,56,95,790/-. 9. Aggrieved, assessee preferred appeal before the ld. CIT (A) and filed detailed submissions placed at pages 3 to 16 of the impugned order. The assessee also filed additional evidences before the ld. CIT (A) and the ld. CIT (A) asked for the remand report from the Assessing Officer which are placed at pages 16 to 19 of the impugned order. Ld. CIT (A) further forwarded the remand report to the assessee for submitting the rejoinder and the same was filed by the assessee which is placed at pages 19 to 26 of the order. After considering the detailed submissions of the assessee, remand report and the rejoinder of the asse....
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....appellant. Hence, Ground No.l is dismissed. 4.3.1 In Additional Ground No.1A of appeal, the appellant has contended that the Assessing Officer has erred in facts and in law in enhancing the booked commission by relying upon seized materials pertaining to another entity, such enhancement thus not having arisen from any incriminating material found from and/or relating to the appellant during Search, the assessment for such year stands completed/unabated, rendering the impugned assessment u/s. 153A of the Act void in view of settled law in [2023] 149 taxmann.com 399 (SC) 4.3.2 Appellant furnished his original return of income u/s 139 of the Act on 29.09.2012 declaring total income of Rs. 8,81,660/- which was processed u/s. 143(1). Search and seizure action u/s 132 of the Act was carried out in the Adam Smith Group of cases on 28.11.2017. Notice u/s l53A was issued on 26.04.2019. Consequent to notice u/s 153A appellant filed its return of income declaring total income of Rs. 8,81,660/-. The following additions have been made by the AO while passing the order u/s 153A r.w.s 143(3) of the Act: S.No. Additional disallowance Amount (in Rs. ) 1. Addition on....
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..... Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section l53 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word reassess to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A emerges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and another material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while ma....
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....x, Central-3 v. Abhisar Buildwell (P.) Ltd. [20231 149 taxmann.com 399(SC). The Hon'ble Supreme Court held that in respect of completed assessments unabated assessments, no addition can be made by the Assessing Officer in the absence of any incriminating material found during course of search under section 132 or requisition under section 132A of Income Tax Act. 4.3.8 The relevant extracts of the judgment of the case of Principal Commissioner of Income- tax, Central-3 v. Abhisar Buildwell (P.)Ltd., (2023| 149 taxmann.com 399 (SC) are as under: "13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132, the AO assumes the jurisdiction for block assessment unde....
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.... and is in incriminating in nature, the above judicial decision are not applicable in this case. Accordingly, Additional Ground No. 1A is dismissed. 4.4.1 In Ground No. 2 the appellant has contended that the Assessing Officer has erred in making an addition of Rs. 2,48,14,134/- in the hands of the Appellant, without considering the submission filed by the appellant during the assessment proceeding. 4.4.2 In Additional Ground No, 2A, the appellant contends that the AO has erred in enhancing the Booked Commission of the appellant by applying an ad-hoc gross rate of1.28% of Unbooked Commission determined by the Department in the case of the appellant's Group Company ASAPL, contrary to the findings of the Hon'ble Income Tax Settlement Commission Interim Board for Settlement vide its order dated 28,02.2023 u/s 245D(4) of the Act relating to Unbooked Commission in the case of Adam Smith Associates Pvt. Ltd. (ASAPL). 4.4.3 In Ground No. 3 the appellant has contended that the AO has erred in law by not considering the net commission of the appellant by merely making the additions on the basis of gross rate of commission. 4.4.4 Since Ground Nos.2,....