TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1690
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....13. Thereafter, case was selected for scrutiny and notice under section 143(2) of the Act issued on 30.09.2013. Then, Ld. AO completed assessment under section 143(3) on 17.03.2015 by making additions of Rs. 126,58,85,990 u/s 68 of the Act. Aggrieved by the order of the AO, assessee filed appeal before the Ld. CIT(A)- 30 who dismissed the appeal of the assessee and upheld the additions made by then AO. Aggrieved by order of the Ld. CIT(A), the assessee filed second appeal before the ITAT, New Delhi Benches. The tribunal in ITA Nos. 590 & 591/Del/2017 dated 25.10.2017 confirmed the addition of INR 30,00,000/- made u/s 68 of the Act and restored back the remaining issues to the file of AO where the additions were made towards the entries found noted in the seized material. The ITAT also issued certain directions to the AO for the computation of income based on the entries in the seized material. Thereafter the AO proceeded to recompute the income of the assessee as per the directions of the Tribunal. The assessee filed detailed replies on 26.10.2018 and 19.11.2018 alongwith necessary details. The AO passed the order u/s 254/143(3) of the Act on 24.12.2018 making total addition of INR....
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....rcumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in estimating the commission @3% and has thus erred in confirming the addition to the extent of Rs. 14,16,608/-. 7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 5. The Revenue has raised following grounds of appeal:- 1. "Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition u/s 68 amounting to Rs. 1,96,59,103/-, in respect of unexplained transactions, without verification of the claim of the assessee. 2. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in not providing the Assessing Officer with an opportunity of being heard, on the additional submission made by the appellant. 3. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in ignoring the fact that there is no entry amounting to Rs. 54,50,031/- in computation of inflow of funds and the submissions of the appellant was factually inc....
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....itive and negative peak balances of the fund flow statement. The assessee claimed that the entries contained in loose papers/diaries found and seized had two types of transactions first, the cash transactions with the same code which was for a party for transactions carried out through cheques also and second, the remaining transactions in cash in different codes i.e. different parties, for which no entries were noted of any transaction through cheque. 9. It was the claim since beginning that the assessee was a practicing Chartered Accountant and was mediating to provide the funds to various persons who approached him where the assessee arranged cheques as well as cash to the needy persons by arranging the funds from the persons who are having funds after charging commission for the services rendered. For his own memoranda purposes, he jotted down these transactions in the diaries where transactions in cheque as well as cash received from the parties and paid subsequently were noted under coded form. Likewise where only cash transactions were done, they were also noted in coded form. 10. Ld. AR argued that where both the cash and cheques were recorded, Revenue has allowed ded....
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....il in its order where Ld. CIT(A) has clearly observed that the Hon'ble Tribunal in its order has directed to take one side of the fund flow statement i.e. the inflow of funds which has been done by the AO and thus, there is no error in the order of Ld. CIT(A) to this extent. Regarding the claim of the assessee for deduction of cash transactions under the same code, he submits that these were made by the assessee himself out of his undisclosed income and therefore, no deduction is to be allowed on this score. 14. With respect to the Revenue's appeal, Ld.CIT DR submits that Ld. CIT(A) has reduced the additions on account of errors and duplicate entries without considering the true nature of transaction and therefore, he submits that the same deserves to be restored. 15. Heard the contentions of both the parties and perused the material available on record. With respect to the claim of the assessee for deduction of INR 5,34,60,686/- towards cash transactions with the parties having common code, we find that these transactions were carried out with the same entry code as was appearing against the corresponding entries of transactions through cheques. Both the entries of cheques a....
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....e name of "MKS" and on 07.04.2011, a sum of INR 15 Lakhs and INR 20 Lakhs were taken as inflow of funds i.e. "MKS" thus these can be treated as from the same party and necessary deduction could be allowed. 18. It is further seen from the peak working filed by the assessee that the amounts appearing as inflow of funds being the source are from under different code whereas the outflow of funds are under different code. This, it cannot be accepted that the funds given to one party appearing under different code is received back from the same party as the same were found noted under different code. Therefore, the claim of the assessee of taking peak balance of the transactions cannot be accepted in whole which is applicable where the recipient and Pyer are the same or unknown. 19. As observed above in the instant case, from the perusal of working of peak credit filed by the assessee, it is clear that the recipients of outflow of funds as well as the person who gave the funds are not the same person as they are having different code, except with regard to the inflow and outflow of funds under the code "MKS" where entries are appearing both for inflow and outflow of funds. Therefor....
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....result, Ground of appeal Nos. 1 to 4 of the assessee are partly allowed and Ground of appeal Nos. 1 to 5 raised by the Revenue are dismissed. 25. Now coming to Ground of appeal No.6 raised by the assessee wherein the assessee has challenged the application of estimation of commission income @ 3 %. 26. Before us, Ld.AR submits that commission rate of 3% is exorbitant high and AO has not brought on record any comparable case for applying such high rate of commission on the money lending services provided by the assessee. He, therefore, requested to reduce the same at a reasonable rate. 27. On the other hand, Ld. CIT DR supported the rate applied by AO and submits that the rate is quite reasonable and therefore, the same deserves to be upheld. 28. Heard the contentions of both the parties and perused the material available on record. The assessee was admittedly providing entries to various persons of mediating in arranging the finance and charged commission for such services. Since beginning of the proceedings, it was claim of the assessee that only commission would be added on such transactions. The Revenue also accepted the contentions of the assessee and hold that the t....
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....Total of Cheque Transactions 3% Code wise transactions As per order dated 15.02.2019 passed under section 154 of the Act Code S.No. of order u/s 154 Date Particulars Annesure No. Page No. Particulars Inflow of Funds Outflow of funds 1 4 01-04-2011 Small Dairy AI 35 AKR-15-00 15.00.000 AKR 2 14 04-04-2011 Small Dairy A ASW-AKR M Infra $0.00.000 AKR 3 20 04-04-2011 Small Dairy AI 15 AKR-40-00 40.00.000 AKR 4 30 05-04-2011 Small Dairy AKR-50-00 50.00.000 AKR 5 11 06-04-2011 Small Dairy A 36 AKR+25-00 25.00,000 AKR 6 40 06-04-2011 Small Dairy A 36 AKR+40-00 40,00,000 AKR 49 08-04-2011 Small Dairy AI 36 AKR+32-00 32.00.000 AKR 54 08-04-2011 Small Dairy A AKR- - 80 80,000 AKR 56 09-04-2011 Small Dairy A AKR+20-00 20,00,000 AKR 10 59 11-04-2011 Small Dairy AI 36 Management AKR 367500- Krishna 3.67.500 AKR 11 60 11-04-2011 Small Dairy AI AKR+5-0380 5.03.800 AKR 12 62 11-04-2011 Small Dairy A AKR-27-50 27.50.000 AKR ASW 13 04-04-2011 Small Dairy AI ASW-AKR Safari 50,00,000 09-04-2011 Small Dairy ASW+10-00 10.00,000 ASW 14 15,00,000 JTU 3 01-04-2011 Small Dairy JIU+15-00 16 05-04-2011 Small....