SARVESH MERCANTILE P.LTD,MUMBAI vs. DCIT 2(4), MUMBAI

PER OM PRAKASH KANT, AM PER OM PRAKASH KANT, AM These three appeals by the assessee are directed against three These three appeals by the assessee are directed against three These three appeals by the assessee are directed against three separate orders dated 26/08/2019, 20/06/2018 and 26/08/2019 separate orders dated 26/08/2019, 20/06/2018 and 26/08/2019 separate orders dated 26/08/2019, 20/06/2018 and 26/08/2019 passed by the Ld. Ld. Commissioner of Income-tax(Appeals) tax(Appeals)-48, Mumbai [in short ‘the Ld. CIT(A) the Ld. CIT(A)’] for assessment years 2013 ] for assessment years 2013-14, 2014-15 and 2015-16 respectively. As common grounds permeating 16 respectively. As common grounds permeating 16 respectively. As common grounds permeating from the same set of the facts have been raised in these appeals, from the same set of the facts have been raised in these appeals, from the same set of the facts have been raised in these appeals, therefore, these appeals were heard together and dispose therefore, these appeals were heard together and dispose therefore, these appeals were heard together and disposed off by way of this consolidated order for convenience and avoid way of this consolidated order for convenience and avoid way of this consolidated order for convenience and avoid repetition of facts. Despite notifying neither anyone appeared nor any Despite notifying neither anyone appeared nor any Despite notifying neither anyone appeared nor any adjournment application was filed on behalf of the assessee. On adjournment application was filed on behalf of the assessee. On adjournment application was filed on behalf of the assessee. On earlier occasions i.e. 24.01.2022, 21.02.2022 & earlier occasions i.e. 24.01.2022, 21.02.2022 & 19.05.2022 also none 19.05.2022 also none attended and matter was adjourned on written request filed. attended and matter was adjourned on written request filed. attended and matter was adjourned on written request filed. Further, on 24.05.2022, the Authorized Representative of the Further, on 24.05.2022, the Authorized Representative of the Further, on 24.05.2022, the Authorized Representative of the assessee was present and on assessee was present and on whose request, the matter was posted request, the matter was posted

ITA No. 7163/MUM/2019 Assessment Year: 2013 2013-14 2. We first take the appeal of the assessee for AY 2013-14. The We first take the appeal of the assessee for AY 2013 We first take the appeal of the assessee for AY 2013 grounds raised in assessment grounds raised in assessment year 2013-14 are reproduced as 14 are reproduced as under:

1. The Ld. CIT(A) erred in upholding the addition made by Ld. AO The Ld. CIT(A) erred in upholding the addition made by Ld. AO The Ld. CIT(A) erred in upholding the addition made by Ld. AO estimating business income at estimating business income at ₹68,94,265/- rejecting the books rejecting the books of account. of account.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 4 & 7162/M/2019

3.1 In the case of the assessee a survey action under section 133A In the case of the assessee a survey action under section 133A In the case of the assessee a survey action under section 133A of the Income Tax Act Income Tax Act, 1961 (in short ‘the Act’) was carried out by was carried out by the Investigation Wing Investigation Wing of the Income-tax Department ax Department Mumbai on19.03.2015 alongwith 19.03.2015 alongwith search action at the premises of the search action at the premises of the ‘Luxora’ group. During the course of the survey During the course of the survey, statement of the statement of the director of the company director of the company ‘Sh Kirtikumar Tarachand Doshi Kirtikumar Tarachand Doshi’ was recorded and he was asked to furnish details of all purchase and was asked to furnish details of all purchase and was asked to furnish details of all purchase and sales transactions with sales transactions with ‘Mirah Dekor P. Ltd.’ and other and other ‘Mirah Group’ entities. He admitted that all the transactions with admitted that all the transactions with admitted that all the transactions with ‘M/s Mirah Group’ were without taking or giving any physical delivery of goods were without taking or giving any physical delivery of goods were without taking or giving any physical delivery of goods or services. He further stated that such accommodation entries were rvices. He further stated that such accommodation entries were rvices. He further stated that such accommodation entries were also provided to M/s Mirah Group also provided to M/s Mirah Group, through other concerns through other concerns

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 5 & 7162/M/2019 controlled and operated by him such as M/s Symcom, M/s Ecospace controlled and operated by him such as M/s Symcom, M/s Ecospace controlled and operated by him such as M/s Symcom, M/s Ecospace etc. During survey action survey action, the director Sh. Kiritkumar Tarachand Sh. Kiritkumar Tarachand Doshi was also asked regarding unsecured loans as also asked regarding unsecured loans as also asked regarding unsecured loans from certain entries recorded in the books of accounts of the assessee company. entries recorded in the books of accounts of the assessee company. entries recorded in the books of accounts of the assessee company.

3.2 Based on the information received of survey action from the Based on the information received of survey action from the Based on the information received of survey action from the Investigation Wing, Mumbai, the , Mumbai, the Assessing Officer Assessing Officer reopened the assessment after recording reasons to believe that income escape nt after recording reasons to believe that income escape nt after recording reasons to believe that income escaped assessment. In the assessment completed under section 147 of the assessment. In the assessment completed under section 147 of the assessment. In the assessment completed under section 147 of the Act on 20/12/2017, the on 20/12/2017, the Assessing Officer made t made two additions. Firstly, the addition was made for earning commission income Firstly, the addition was made for earning commission income Firstly, the addition was made for earning commission income of ₹68,94,265/- from providing accommodation entries, which was from providing accommodation entries, which was from providing accommodation entries, which was estimated at the rate of the 5% on sales recorded in books of at the rate of the 5% on sales recorded in books of at the rate of the 5% on sales recorded in books of accounts of ₹13,78,85, 13,78,85,318/-. Secondly, the addition was made in Secondly, the addition was made in respect of loans recorded in books of accounts from four parties respect of loans recorded in books of accounts from four parties respect of loans recorded in books of accounts from four parties namely, M/s Karishma diamonds private limited ( shma diamonds private limited ( shma diamonds private limited (₹25,00,000/-); M/s Parshwnath Gems P. Ltd. ( M/s Parshwnath Gems P. Ltd. (₹35,00,000/-) Marine Gems P Ltd ) Marine Gems P Ltd

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 6 & 7162/M/2019 (₹1,50,00,000/-) M/s Keshria ) M/s Keshria Diamonds P. Ltd. (₹25,00,000/-), holding the same as unexplained cash credit in terms of section 68 holding the same as unexplained cash credit in terms of section 68 holding the same as unexplained cash credit in terms of section 68 of the Act. Before the Ld. CIT(A), the assessee did not press ground . Before the Ld. CIT(A), the assessee did not press ground . Before the Ld. CIT(A), the assessee did not press ground challenging reopening of the assessment and therefore same was challenging reopening of the assessment and therefore same was challenging reopening of the assessment and therefore same was dismissed by the Ld. CIT(A). dismissed by the Ld. CIT(A). But on merit of the addition also, the n merit of the addition also, the Ld. CIT(A) dismissed the grounds of the assessee. Ld. CIT(A) dismissed the grounds of the assessee. Ld. CIT(A) dismissed the grounds of the assessee. Aggrieved, the assessee is in appeal before the n appeal before the Tribunal raising the ground as raising the ground as reproduced above.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 7 & 7162/M/2019 rejected the books of accounts and estimated addition at the rate of rejected the books of accounts and estimated addition at the rate of rejected the books of accounts and estimated addition at the rate of the 5% on sales of the 5% on sales of ₹13,78,85,318/- which was worked out to which was worked out to ₹68,94,265/-. The Ld. CIT(A) upheld the addition holding that profit . The Ld. CIT(A) upheld the addition holding that profit . The Ld. CIT(A) upheld the addition holding that profit embedded embedded embedded in in in bogus bogus bogus transactions transactions transactions in in in the the the form form form of of of brokerage/commission was over and above the normal profit brokerage/commission was over and above the normal profit brokerage/commission was over and above the normal profit declared by the assessee. declared by the assessee.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 8 & 7162/M/2019 6.1 Without prejudice to the objection to th Without prejudice to the objection to the rejection of books of e rejection of books of account, he further submitted that in assessment year 2014 e further submitted that in assessment year 2014 e further submitted that in assessment year 2014-15, the assessment order of which was framed earlier to the present assessment order of which was framed earlier to the present assessment order of which was framed earlier to the present assessment order, the addition ssessment order, the addition for brokerage/commission for brokerage/commission was made at the rate of two percent of the sales, whereas in the present two percent of the sales, whereas in the present two percent of the sales, whereas in the present assessment year addition has been made at assessment year addition has been made at the rate of the rate of 5%, which is arbitrary and without reference to past records. He further without reference to past records. He further without reference to past records. He further submitted that assessee has already shown a gross profit of ubmitted that assessee has already shown a gross profit of ubmitted that assessee has already shown a gross profit of ₹1,47,12,015/-, which is in excess of 5% and therefore making , which is in excess of 5% and therefore making , which is in excess of 5% and therefore making further addition estimating gross profit rate of 5%, amounts to further addition estimating gross profit rate of 5%, amounts to further addition estimating gross profit rate of 5%, amounts to double taxation and hence also the addition need to be deleted. double taxation and hence also the addition need to be deleted. double taxation and hence also the addition need to be deleted.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 9 & 7162/M/2019

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 11 & 7162/M/2019 either the name of the directors or contact person from whom the name of the directors or contact person from whom the name of the directors or contact person from whom the loans were received and he was also not aware about the business received and he was also not aware about the business received and he was also not aware about the business activity of those parties from activity of those parties from whom loans were received. In view of received. In view of the above observations, the the above observations, the Assessing Officer issued notice under issued notice under section 133(6) to the parties. to the parties. In response, the parties file parties filed replies affirming the giving of loans to the assessee, giving of loans to the assessee, however, the however, the Assessing Officer was not satisfied with the creditworthiness of those parties. was not satisfied with the creditworthiness of those parties. was not satisfied with the creditworthiness of those parties.

10.1 The Ld. Assessing Officer Assessing Officer in respect of the loans from M/s e loans from M/s Karishma Diamonds Private Limited Diamonds Private Limited and M/s Paraswnath and M/s Paraswnath Gems Private Limited, has referred to the statement of Sh Gautam , has referred to the statement of Sh Gautam , has referred to the statement of Sh Gautam Bhanwarlal Jain, wherein he in his statement recorded under section Jain, wherein he in his statement recorded under section Jain, wherein he in his statement recorded under section 131 of the Act stated that these two entities stated that these two entities i.e. M/s Karishma & M/s i.e. M/s Karishma & M/s Parasnath were controlled and operated by him and the entries were controlled and operated by him and the entries were controlled and operated by him and the entries recorded in their books of accounts are all bogus entries and no books of accounts are all bogus entries and no books of accounts are all bogus entries and no business activity was carried by tho ness activity was carried by those two entities. Regarding loan from M/s Marine, the , the Assessing Officer has referred to the has referred to the Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 12 & 7162/M/2019 statement of the director director ‘Sh Pramod Kumar Ranka Sh Pramod Kumar Ranka’, wherein he admitted that the entity admitted that the entity ‘M/s Marine’ was controlled and operated was controlled and operated by him and used for providing accommodation entries. I by him and used for providing accommodation entries. I by him and used for providing accommodation entries. In respect of loan from ‘M/s Kesharia Kesharia’, the Assessing Officer referred to statement referred to statement of director Sh Vijay Narendra Kothari of director Sh Vijay Narendra Kothari, wherein he also admitted wherein he also admitted that entity was controlled controlled and operated by him and was used for operated by him and was used for providing accommodation entry. accommodation entry.

10.2 In view of above above statements, the Assessing Officer Assessing Officer was of the view that directors and the persons who controlled the companies, view that directors and the persons who controlled the companies, view that directors and the persons who controlled the companies, have admitted the fact that no real activity was conducted by those have admitted the fact that no real activity was conducted by those have admitted the fact that no real activity was conducted by those companies and companies and they were in the business of providing companies and they were in the business of providing they were in the business of providing accommodation entries only. The accommodation entries only. The Assessing Officer Assessing Officer also observed that director of the assessee also admitted that no real activity was that director of the assessee also admitted that no real activity was that director of the assessee also admitted that no real activity was carried out by the assessee company and all prices of goods were carried out by the assessee company and all prices of goods were carried out by the assessee company and all prices of goods were decided as per the convenience of the other party with whom the decided as per the convenience of the other party with whom the decided as per the convenience of the other party with whom the assessee was transacted. assessee was transacted.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 13 & 7162/M/2019 10.3 The Assessing Office Assessing Officer noted that during survey action also the noted that during survey action also the Director of assessee- -company failed to provide any details about failed to provide any details about those companies except se companies except the statement that loans were received by loans were received by cheque and interest at the rate of 11% was paid. and interest at the rate of 11% was paid. The Assessing and interest at the rate of 11% was paid. Officer relied on the decision of the Hon’ble Supreme Court in the e decision of the Hon’ble Supreme Court in the e decision of the Hon’ble Supreme Court in the case of Kachwala Gems Gems P. Ltd. Vs JCIT (2006) 206 CTR 585(SC) Vs JCIT (2006) 206 CTR 585(SC) wherein it is held that payment by account payee cheque is not wherein it is held that payment by account payee cheque is not wherein it is held that payment by account payee cheque is not sufficient to establish the genuineness of the purchases. He further sufficient to establish the genuineness of the purchases. He further sufficient to establish the genuineness of the purchases. He further referred to of the decision of the Hon’ble referred to of the decision of the Hon’ble High Court High Court in the case of CIT Vs Prashant (p) (1994) 121CTR 20 (Cal.) CIT Vs Prashant (p) (1994) 121CTR 20 (Cal.) wherein wherein it is held that even payment by account payee cheque is not sacrosanct and it that even payment by account payee cheque is not sacrosanct and it that even payment by account payee cheque is not sacrosanct and it would not make otherwise nongenuine transactions as genuine. would not make otherwise nongenuine transactions as genuine. would not make otherwise nongenuine transactions as genuine.

10.4 In view of above observations, the In view of above observations, the Ld. Assessing Officer Assessing Officer held that assessee failed to establish (i that assessee failed to establish (i) identity of the loan provider he loan provider (ii) creditworthiness of loan providers and (iii) genuineness of the creditworthiness of loan providers and (iii) genuineness of the creditworthiness of loan providers and (iii) genuineness of the Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 14 & 7162/M/2019 transactions, and therefore he held those loans as unexplained cash s, and therefore he held those loans as unexplained cash s, and therefore he held those loans as unexplained cash credit in terms of section 68 of the credit in terms of section 68 of the Act.

11.1 Ld. CIT(A) however was of the view that assessee failed to Ld. CIT(A) however was of the view that assessee failed to Ld. CIT(A) however was of the view that assessee failed to satisfactorily explain the nature and source of the credit in his books satisfactorily explain the nature and source of the credit in his books satisfactorily explain the nature and source of the credit in his books

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 15 & 7162/M/2019 of accounts and therefore sustain of accounts and therefore sustained the addition made by the the addition made by the Assessing Officer.

a. where the where the Assessing Officer has refused to admit the has refused to admit the evidences b. where the assessee was prevented by the sufficient cause where the assessee was prevented by the sufficient cause where the assessee was prevented by the sufficient cause from producing the evidences which were called upon by from producing the evidences which were called upon by from producing the evidences which were called upon by the Assessing Offic Assessing Officer c. where the assessee was prevented by the sufficient cause the assessee was prevented by the sufficient cause the assessee was prevented by the sufficient cause from producing the evidence which are relevant to the from producing the evidence which are relevant to the from producing the evidence which are relevant to the ground of the appeal ground of the appeal

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 16 & 7162/M/2019 d. where Assessing Officer Assessing Officer has passed the order without has passed the order without giving sufficient opportunity to the assessee to adduce giving sufficient opportunity to the assessee to adduce giving sufficient opportunity to the assessee to adduce evidences relevant to the ground of the appeal levant to the ground of the appeal

“In connection with the above assessment year, the appellant has fi In connection with the above assessment year, the appellant has filed In connection with the above assessment year, the appellant has fi an appeal as well as made submission before your Honour. Documents an appeal as well as made submission before your Honour. Documents an appeal as well as made submission before your Honour. Documents mentioned in page no. 24 to 39 and page no. 56 to 123 are being mentioned in page no. 24 to 39 and page no. 56 to 123 are being mentioned in page no. 24 to 39 and page no. 56 to 123 are being produced afresh which were not furnished during the course of produced afresh which were not furnished during the course of produced afresh which were not furnished during the course of assessment proceedings. The assessing officer called for th assessment proceedings. The assessing officer called for th assessment proceedings. The assessing officer called for the information in the month of September,2017 pertaining to the information in the month of September,2017 pertaining to the information in the month of September,2017 pertaining to the purchases and sales as well as confirmation in relation to unsecured purchases and sales as well as confirmation in relation to unsecured purchases and sales as well as confirmation in relation to unsecured loans appearing in the balance sheet. Since the details could not be loans appearing in the balance sheet. Since the details could not be loans appearing in the balance sheet. Since the details could not be collated earlier, the appellant could gather them only collated earlier, the appellant could gather them only in the month of in the month of December, 2017. Due to complexities involved in gathering December, 2017. Due to complexities involved in gathering December, 2017. Due to complexities involved in gathering

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 17 & 7162/M/2019 information from the lenders who were already busy with their information from the lenders who were already busy with their information from the lenders who were already busy with their assessment proceedings, the appellant could not lay his hands for the assessment proceedings, the appellant could not lay his hands for the assessment proceedings, the appellant could not lay his hands for the information at earlier instance. However, when the information at earlier instance. However, when the papers were ready papers were ready for submission and the appellant approached the Assessing Officer, the for submission and the appellant approached the Assessing Officer, the for submission and the appellant approached the Assessing Officer, the appellant was informed that the assessment is framed and the appellant was informed that the assessment is framed and the appellant was informed that the assessment is framed and the submissions will not be entertained. In view of these facts clause (a) submissions will not be entertained. In view of these facts clause (a) submissions will not be entertained. In view of these facts clause (a) and clause (d). In the interest of and clause (d). In the interest of natural justice, we earnestly request natural justice, we earnestly request your Honour kindly to admit the additional evidence and oblige. We your Honour kindly to admit the additional evidence and oblige. We your Honour kindly to admit the additional evidence and oblige. We have already furnished two sets of submission which enables your have already furnished two sets of submission which enables your have already furnished two sets of submission which enables your Goodselves to forward the same to the Assessing Officer for remand Goodselves to forward the same to the Assessing Officer for remand Goodselves to forward the same to the Assessing Officer for remand report. We underta report. We undertake to appear before the Assessing Officer for ke to appear before the Assessing Officer for producing all the necessary details if any called by him. Hope your producing all the necessary details if any called by him. Hope your producing all the necessary details if any called by him. Hope your Honour will please do the needful and admit the case for adjudication Honour will please do the needful and admit the case for adjudication Honour will please do the needful and admit the case for adjudication and oblige.” 13.1 We find that in the case of M/s Sunrise Associate in We find that in the case of M/s Sunrise Associate in find that in the case of M/s Sunrise Associate in 244 & 245/Mum/2022 for AY 2013 244 & 245/Mum/2022 for AY 2013-14 & 2014-15, the Co 15, the Co-ordinate Bench, in view of retraction traction of statement by Sh. Gautam Bhanwarlal statement by Sh. Gautam Bhanwarlal Jain, has restored the matter of addition u/s 68 of the Act, back to Jain, has restored the matter of addition u/s 68 of the Act, back to Jain, has restored the matter of addition u/s 68 of the Act, back to the Assessing Officer for re the Assessing Officer for re-examination.

2. The Ld. Commissioner of Income Tax (Appeals) erred in upholding The Ld. Commissioner of Income Tax (Appeals) erred in upholding The Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 1.00.00.000/- under section 68 of the Income Tax the addition of Rs. 1.00.00.000/ n 68 of the Income Tax Act. 3. The Ld. Commissioner of Income Tax (Appeals) erred in upholding The Ld. Commissioner of Income Tax (Appeals) erred in upholding The Ld. Commissioner of Income Tax (Appeals) erred in upholding the additions of Rs. 36,63,718/- as brokerage income in addition to the additions of Rs. 36,63,718/ as brokerage income in addition to the income already offered by the appellant at about 5.12% as gross the income already offered by the appellant at about 5.12% as gross the income already offered by the appellant at about 5.12% as gross profit. 4. The Ld. Commission The Ld. Commissioner of Income Tax (Appeals) erred in upholding er of Income Tax (Appeals) erred in upholding the additions of interest expenses of Rs. 16,78,356/- the additions of interest expenses of Rs. 16,78,356/

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 20 & 7162/M/2019

5. The Ld. Commissioner of Income Tax (Appeals) erred in upholding The Ld. Commissioner of Income Tax (Appeals) erred in upholding The Ld. Commissioner of Income Tax (Appeals) erred in upholding the additions of interest expenses of Rs. 6,07,472/-. the additions of interest expenses of Rs. 6,07,472/ 17. Now we take up Ground No. 3 of th Now we take up Ground No. 3 of the assessee for assessment e assessee for assessment year 2014-15 for adjudication for adjudication.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 21 & 7162/M/2019 recorded in the books of accounts recorded in the books of accounts at the gross profit rate the gross profit rate of 5.12%. According to his submission, when the assessee has also declared submission, when the assessee has also declared submission, when the assessee has also declared gross profit @ 5% on the business activity recorded in books of gross profit @ 5% on the business activity recorded in books of gross profit @ 5% on the business activity recorded in books of account which the Assessing Officer has treated as activity of account which the Assessing Officer has treated as activity of account which the Assessing Officer has treated as activity of providing accommodation entry and therefore, the Assessing Officer providing accommodation entry and therefore, the Assessing Officer providing accommodation entry and therefore, the Assessing Officer is not justified ed ed in in in making making making separate separate separate addition addition addition for for for commission/brokerage @ 2% in addition to income already commission/brokerage @ 2% in addition to income already commission/brokerage @ 2% in addition to income already declared by the assessee from said business activity. declared by the assessee from said business activity. declared by the assessee from said business activity.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 23 & 7162/M/2019 we set aside the order of the lower authorities on the issue we set aside the order of the lower authorities on the issue we set aside the order of the lower authorities on the issue-in- dispute that allow the ground raised by the assessee. dispute that allow the ground raised by the assessee. dispute that allow the ground raised by the assessee.

Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 24 & 7162/M/2019 P. Ltd., Karishma Diamonds Private Limited Karishma Diamonds Private Limited has already been has already been restored to the file of restored to the file of the Assessing Officer for deciding afresh in the Assessing Officer for deciding afresh in assessment year 2014 assessment year 2014-15. Therefore, accordingly, following our efore, accordingly, following our finding in assessment year 2013 finding in assessment year 2013-14, these grounds No. 1, 2, 4 & 5 s No. 1, 2, 4 & 5 of the appeal of the assessee are also restored to the file of the the appeal of the assessee are also restored to the file of the the appeal of the assessee are also restored to the file of the Assessing Officer for deciding afresh following our direction in Assessing Officer for deciding afresh following our direction in Assessing Officer for deciding afresh following our direction in assessment year 2013 assessment year 2013-14. These grounds of appeal are accordingly These grounds of appeal are accordingly allowed for statistical purposes. allowed for statistical purposes.

ITA No. 7162/MUM/2019 Assessment Year: 2015 2015-16 23. Now we take up the appeal of the asse Now we take up the appeal of the assessee for assessment year ssee for assessment year 2015-16. The ground No. 1 relates to rejection of books of accounts . The ground No. 1 relates to rejection of books of accounts . The ground No. 1 relates to rejection of books of accounts and making of estimated of and making of estimated of addition of ₹79,51,707/ 79,51,707/- in the year under consideration. The Assessing Officer . The Assessing Officer has estimated income has estimated income from brokerage for issuing accommodation entry bills @ 5% of the from brokerage for issuing accommodation entry bills @ 5% of the from brokerage for issuing accommodation entry bills @ 5% of the total sales. In written submission, the Ld. Counsel tal sales. In written submission, the Ld. Counsel of the assessee has submitted that during the year gross profit rate declared is of has submitted that during the year gross profit rate declared is of has submitted that during the year gross profit rate declared is of Sarvesh Mercantile Pvt. Ltd. Sarvesh Mercantile Pvt. Ltd. 25 & 7162/M/2019 6.97%, which is much higher than the brokerage/commission much higher than the brokerage/commission much higher than the brokerage/commission income estimated by the Assessing Officer by the Assessing Officer i.e. 5%. i.e. 5%. The identical issue has already been decided by us in assessment year 2014 issue has already been decided by us in assessment year 2014 issue has already been decided by us in assessment year 2014-15, therefore, following our fin therefore, following our finding in assessment year 2014 ding in assessment year 2014-15, the addition for brokerage/commission on accommodation entry bills addition for brokerage/commission on accommodation entry bills addition for brokerage/commission on accommodation entry bills on the basis of transactions for which the assessee has alread on the basis of transactions for which the assessee has alread on the basis of transactions for which the assessee has already reported gross profit @ 6.97% reported gross profit @ 6.97%, we hold that brokerage/commission we hold that brokerage/commission income is subsumed in subsumed in gross profit declared by the assessee and gross profit declared by the assessee and therefore no separate therefore no separate addition for commission/brokerage is addition for commission/brokerage is required. The ground No. 1 raised by the assessee is allowed. required. The ground No. 1 raised by the assessee is allowed. required. The ground No. 1 raised by the assessee is allowed.