DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), KOLKATA , KOLKATA vs. ANAND KUMAR SHARMA, KOLKATA

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ITSSA 17/KOL/2025Status: DisposedITAT Kolkata01 May 2025AY 2013-143 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had followed the judicial discipline by relying on the order of the coordinate bench of the Tribunal for the previous assessment years. The Tribunal found no reason to interfere with the CIT(A)'s order as the Revenue had not demonstrated any change in facts for the impugned assessment year. The Tribunal referred to a coordinate bench's decision in the assessee's own case (IT(SS)A Nos.169 to 172/Kol/2023) which, while dealing with bank balances of 11 concerns as part of entry providing business, estimated the commission income at 0.16% on a total turnover of Rs. 15,59,76,290/-, resulting in an addition of Rs. 2,49,562/-. The Tribunal upheld this rate of 0.16% for the current assessment year. The appeal of the revenue was dismissed.

What were the facts?

The Revenue has filed an appeal against the order dated 21.11.2024, passed by the CIT(A), Kolkata-20, for the assessment year 2013-2014. The Assessing Officer had estimated the assessee's income at 2% of alleged bogus transactions as commission. The CIT(A), following a coordinate bench of the Tribunal in the assessee's own case, reduced the commission rate to 0.16%. The Revenue is aggrieved by this reduction and supports the Assessing Officer's order. The assessee relies on the coordinate bench's decision.

What were the issues?

1. Whether the CIT(A) erred in reducing the estimated rate of commission on alleged bogus transactions from 2% to 0.16% for Assessment Year 2013-2014, thereby deviating from the Assessing Officer's estimation? (Question of law and fact, turning on Section 69 of the Income Tax Act, 1961). Assessee's contention: The assessee supports the CIT(A)'s order, relying on the coordinate bench of the Tribunal's decision in its own case for Assessment Years 2010-2011 to 2013-2014, which held the commission rate at 0.16%. Revenue's contention: The Revenue disagrees with the CIT(A)'s order and the Tribunal's previous decision, vehemently supporting the Assessing Officer's estimation of 2% commission.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA

Hearing: 01/05/2025Pronounced: 01/05/2025

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER आयकर अपील (तलाशियाां और अशिग्रहण)सं/ITA No.17/KOL/2025 (निर्धारण वर्ा / Assessment Year : 2013-2014) DCIT, Central Circle-1(2), Vs Anand Kumar Sharma Kolkata 50/21, Shree Arvind Road, Salkia, Howrah PAN No. :AVMPS 0367 F (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) रधजस्व की ओर से /Revenue by : Shri Raja Sengupta, CIT-DR निर्धाररती की ओर से /Assessee by : Shri Siddharth Agarwal, AR सुनवाई की तारीख / Date of Hearing : 01/05/2025 घोषणा की तारीख/Date of Pronouncement : 01/05/2025 आदेश / O R D E R Per Bench : This is an appeal filed by the revenue against the order dated 21.11.2024, passed by the CIT(A), Kolkata-20, passed in DIN & Order No.ITBA/APL/S/250/20241-25/1070521556(1), for the assessment year 2013-2014. 2. Shri Raja Sengupta, CIT-DR, appeared on behalf of the revenue. Shri Siddharth Agarwal, AR appeared on behalf of the revenue. 3. It was submitted by the ld. CIT-DR that the Assessing Officer in the course of assessment had estimated the income of the assessee at 2% of the alleged bogus transactions treating the said amount as commission of the assessee. It was the submission that the ld. CIT(A) had, following the decision of the coordinate bench of the Tribunal in assessee’s own case, held that the rate of commission is to be estimated at 0.16%. It was the submission that the revenue does not agree with the order of the ld. CIT(A)

2 IT(SS)A No.17/KOL/2025 or the Tribunal. The ld. CIT-DR vehemently supported the order of the Assessing Officer. 4. In reply, ld.AR placed before us a copy of the order of the coordinate bench of the Tribunal in assessee’s own case passed in IT(SS)A Nos.169 to 172/Kol/2023 for A.Ys.2010-2011 to 2013-2014, order dated 14.03.2024. He vehemently supported the order of the ld. CIT(A). 5. We have considered the rival submissions. A perusal of the decision of the coordinate bench of the Tribunal in assessee’s own case, cited supra, shows that the coordinate bench of the Tribunal has, in para 16.1 in the order dated 14.03.2024 (supra), held as follows :- 16.1. Though we have held that since the revenue authorities have treated the assets and liabilities of the 11 concerns as Nil, the bank balance also being part of the assets, deserves to be treated as Nil. But undisputedly it is a part of the entry providing business of the 11 concerns, allegedly owned, controlled and managed by the assessee as part of the entry providing business. Further we notice that the turnover of accommodation entries routed by the assessee and the concerns controlled by it have already been added up and commission income on such turnover has been estimated and the rate of such commission income has been held by us 00.16%. Now, the alleged sum of Rs.7,79,88,144.85/- which is the total of bank balance of 11 concerns as on 30/05/2011 is also the part of accommodation entry providing business. The assessee has failed to prove that the alleged sum has been considered by the ld. Assessing Officer in the total turnover of accommodation entry providing business. We, therefore, considering that against the alleged sum of bank balances, there has to be some funds received from other sources by the 11 concerns and, therefore, the total of receipt of the funds and the bank balance totals to Rs. 15,59,76,290/- (Rs.7,79,88,144.85/-X 2). Now, treating it to be the turnover, the income at the most can be calculated @0.16% i.e., Rs. 2,49,562/ being the commission income which is required to be added in the hands of the assessee as against the alleged addition u/s 69 of the Act. We accordingly, set aside the finding of the lower authorities and partly allow the Grounds raised by the assessee sustaining the addition at Rs.2,49,562/-. Accordingly, ,the additional ground raised by the assessee for Assessment Year 2012-13 is partly allowed.”

3 IT(SS)A No.17/KOL/2025 6. It is noticed that the ld. CIT(A) has followed the judicial discipline in relying upon the order of the Tribunal for the immediate previous assessment years. This being so, we find no reason to interfere in the order of the ld. CIT(A) and also the revenue even has not been able to show any change of facts for the impugned assessment year under consideration. Accordingly, the appeal of the revenue is dismissed. 7. In the result, appeal of the revenue is dismissed. Order dictated and pronounced in the open court on 01/05/2025.

Sd/- Sd/- (RAKESH MISHRA) (GEORGE MATHAN) लेखा सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 01/05/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant- प्रत्यर्थी / The Respondent- 2. 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, 5. ITAT, Kolkata 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यापपत प्रतत //True Copy// (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata

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