M/S. ALAG SECURITIES PVT. LTD,MUMBAI vs. THE COMM OF INCOME TAX (A)-22, MUMBAI

Centre, Delhi (in short ‘the Ld. First Appellate Authority’) for Centre, Delhi (in short ‘the Ld. First Appellate Authority’) for Centre, Delhi (in short ‘the Ld. First Appellate Authority’) for assessment year 2005 assessment year 2005-06, 2008-09, 2009-10 and 201 10 and 2010-11 respectively. As common issue respectively. As common issues-in-dispute have been raised in these been raised in these appeals, therefore, same therefore, same were heard together and disposed off by heard together and disposed off by way of this consolidated order for convenience and avoid repetition way of this consolidated order for convenience and avoid repetition way of this consolidated order for convenience and avoid repetition of facts.

by the assessee are 06. The grounds raised by the assessee are reproduced as under: reproduced as under:

2. The learned Assessing Officer and the learned CIT (A) has erred in learned Assessing Officer and the learned CIT (A) has erred in learned Assessing Officer and the learned CIT (A) has erred in law and in facts in passing the order without complying with the law and in facts in passing the order without complying with the law and in facts in passing the order without complying with the principals of natural justice. principals of natural justice. 3. The learned Assessing Officer and the learned (A) has erred in law The learned Assessing Officer and the learned (A) has erred in law The learned Assessing Officer and the learned (A) has erred in law and in facts ignoring the Bom and in facts ignoring the Bombay High Court judgments which has bay High Court judgments which has been decided in favour of the applicant and according to the been decided in favour of the applicant and according to the been decided in favour of the applicant and according to the Bombay High Court judgments the income should be taken @0.15% Bombay High Court judgments the income should be taken @0.15% Bombay High Court judgments the income should be taken @0.15% of the turnover and 50% expenses should be allowed of the expenses of the turnover and 50% expenses should be allowed of the expenses of the turnover and 50% expenses should be allowed of the expenses claimed against the income. claimed against the income.

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 3 to 72/M/2022

4. The learned Assessing Officer and the learned CIT (A) has erred in learned Assessing Officer and the learned CIT (A) has erred in learned Assessing Officer and the learned CIT (A) has erred in law and in facts in applying 2% income on entire bank deposit as law and in facts in applying 2% income on entire bank deposit as law and in facts in applying 2% income on entire bank deposit as against 0.15% offered by the appellant. against 0.15% offered by the appellant.

5. The learned Assessing Officer and the learned The learned Assessing Officer and the learned CIT (A) has erred in CIT (A) has erred in law and in facts by ignoring the direction given by Honorable ITAT law and in facts by ignoring the direction given by Honorable ITAT law and in facts by ignoring the direction given by Honorable ITAT that income should be calculated @0.15% of the net turnover (after that income should be calculated @0.15% of the net turnover (after that income should be calculated @0.15% of the net turnover (after deducting transfer entries). deducting transfer entries). 6. The learned Assessing Officer and the learned CIT (A) has erred in The learned Assessing Officer and the learned CIT (A) has erred in The learned Assessing Officer and the learned CIT (A) has erred in law and in facts in estimating the income on gross receipts without and in facts in estimating the income on gross receipts without and in facts in estimating the income on gross receipts without reducing the transfer entries amount in bank account on which no reducing the transfer entries amount in bank account on which no reducing the transfer entries amount in bank account on which no income is earned. It is a transfer to the sister concerns and entities income is earned. It is a transfer to the sister concerns and entities income is earned. It is a transfer to the sister concerns and entities under the same management. under the same management. 7. The learned Assessing Officer The learned Assessing Officer and the learned CIT (A) has erred in and the learned CIT (A) has erred in law and in facts by ignoring the direction given by ITAT that 50% law and in facts by ignoring the direction given by ITAT that 50% law and in facts by ignoring the direction given by ITAT that 50% expenses claimed should be allowed against income estimated expenses claimed should be allowed against income estimated expenses claimed should be allowed against income estimated @0.15%. 8. The appellant craves leave to add to, alter, amend and/ or delete in The appellant craves leave to add to, alter, amend and/ or delete in The appellant craves leave to add to, alter, amend and/ or delete in all the foregoi all the foregoing grounds of appeal

3. Briefly stated, facts of the case are that consequent to search Briefly stated, facts of the case are that consequent to search Briefly stated, facts of the case are that consequent to search action u/s 132(1) of the Act carried out at the premises of action u/s 132(1) of the Act carried out at the premises of action u/s 132(1) of the Act carried out at the premises of ‘Mahasagar Group’ of cases of cases [re-named as ‘Alag Securities Pvt. Ltd. Alag Securities Pvt. Ltd.’], assessment u/s 143(3) r.w.s. 153A was assessment u/s 143(3) r.w.s. 153A was passed on 08.12.2011 passed on 08.12.2011 wherein the Assessing Officer assessed the total income at wherein the Assessing Officer assessed the total income at wherein the Assessing Officer assessed the total income at ₹1,12,12,150/- as against Nil income declared by the assessee. In the as against Nil income declared by the assessee. In the as against Nil income declared by the assessee. In the M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 4 to 72/M/2022 course of search, it was found that the companies of earch, it was found that the companies of earch, it was found that the companies of ‘Mahasagar Group’ of cases were involved in providin of cases were involved in providing accommodation entries g accommodation entries by way of cheque against against receipt of cash from the customers customers seeking cheques. The Assessing Officer cheques. The Assessing Officer estimated income from commission e from commission @ 2% for issuing accommodation entries for issuing accommodation entries on the sum of the on the sum of the ‘credit entries’ appearing in the bank acco appearing in the bank accounts of the assessee of the assessee. Against assessment order passed, the Ld. First Appellate Authority assessment order passed, the Ld. First Appellate Authority assessment order passed, the Ld. First Appellate Authority confirmed the additions by way of a combined order dated confirmed the additions by way of a combined order dated confirmed the additions by way of a combined order dated 31.07.2012 for assessment year 2004 31.07.2012 for assessment year 2004-05 to assessment year 2010 05 to assessment year 2010- 11. On further appeal by the assessee, the Trib 11. On further appeal by the assessee, the Tribunal by way of order unal by way of order dated 07.07.2017 in to 6055/M/2012 restored the dated 07.07.2017 in ITA No. 6049 to 6055/M/2012 restored the dated 07.07.2017 in ITA No. 6049 to 6055/M/2012 restored the matter back to the file of the Assessing Officer for providing matter back to the file of the Assessing Officer for providing matter back to the file of the Assessing Officer for providing opportunity to the assessee, following the order of the Tribunal in opportunity to the assessee, following the order of the Tribunal in opportunity to the assessee, following the order of the Tribunal in the case of Jayesh K. Sampat v. DCIT [ITA N the case of Jayesh K. Sampat v. DCIT [ITA Nos. 1000 to 1003 & os. 1000 to 1003 & 1005/M/2013 order dated 28.10.2016] 1005/M/2013 order dated 28.10.2016]. Consequent Consequent to the direction of the Tribunal (supra) (supra), the Assessing Officer provided opportunity , the Assessing Officer provided opportunity

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 5 to 72/M/2022 to the assessee, however to the assessee, however, relying on the statement and the relying on the statement and the evidences found during the course of search, evidences found during the course of search, he he in impugned assessment order, upheld the commission @ 2% upheld the commission @ 2% upheld the commission @ 2% which was estimated by the Assessing Officer by the Assessing Officer in assessment order in assessment order dated 08.12.2011. The Assessing Officer is of the view that order of the 08.12.2011. The Assessing Officer is of the view that order of the 08.12.2011. The Assessing Officer is of the view that order of the Tribunal in other group cases of Tribunal in other group cases of ‘Mahasagar Securities Mahasagar Securities’ wherein commission income has been commission income has been estimated @ 0.15%, were not estimated @ 0.15%, were not acceptable because the Department had preferred appeal against acceptable because the Department had preferred appeal against acceptable because the Department had preferred appeal against those orders before the before the Hon’ble Bombay High Court. Further, the Hon’ble Bombay High Court. Further, the Assessing Officer also disallowed Assessing Officer also disallowed the claim of the assessee seeki the claim of the assessee seeking exclusion of certain transfer entries in the bank account for the transfer entries in the bank account for the purpose of invoking commission @ 2%. According to the Assessing purpose of invoking commission @ 2%. According to the Assessing purpose of invoking commission @ 2%. According to the Assessing Officer, no evidence in support of the claim was filed. Further, the Officer, no evidence in support of the claim was filed. Further, the Officer, no evidence in support of the claim was filed. Further, the Assessing Officer also rejected the claim for allowanc Assessing Officer also rejected the claim for allowanc Assessing Officer also rejected the claim for allowance of the 50% of the expenses as held in other group cases. On further appeal, the Ld. the expenses as held in other group cases. On further appeal, the Ld. the expenses as held in other group cases. On further appeal, the Ld.

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 6 to 72/M/2022 CIT(A) rejected the contention of the assessee and dismissed the CIT(A) rejected the contention of the assessee and dismissed the CIT(A) rejected the contention of the assessee and dismissed the appeal.

5. The ground No. 1 & 2 are general in nature and therefore, we e ground No. 1 & 2 are general in nature and therefore, we e ground No. 1 & 2 are general in nature and therefore, we are not required to adjudicate the same. The ground No. 3 to 5 are in adjudicate the same. The ground No. 3 to 5 are in adjudicate the same. The ground No. 3 to 5 are in respect of estimation of commission income on the receipts debited respect of estimation of commission income on the receipts debited respect of estimation of commission income on the receipts debited in bank account of the assessee. The contention of the asses in bank account of the assessee. The contention of the asses in bank account of the assessee. The contention of the assessee is that Hon’ble Bombay High Court for assessment year 2003 that Hon’ble Bombay High Court for assessment year 2003 that Hon’ble Bombay High Court for assessment year 2003-04 has restricted the commission income @ 0.15% of the turnover and restricted the commission income @ 0.15% of the turnover and restricted the commission income @ 0.15% of the turnover and therefore, facts of assessment year under consideration of assessment year under consideration of assessment year under consideration being identical to assessment year 2003 ical to assessment year 2003-04, the rate of commission sh he rate of commission should be applied @ 0.15% on the turnover. be applied @ 0.15% on the turnover.

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 7 to 72/M/2022

“18. Since Tribunal had relied upon its own decision in the case of M/s.

18. Since Tribunal had relied upon its own decision in the case of M/s.

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 9 to 72/M/2022 earned on providing accommodation entries. Therefore, Tribunal took n providing accommodation entries. Therefore, Tribunal took n providing accommodation entries. Therefore, Tribunal took the view that since the assessee had itself declared the commission on the view that since the assessee had itself declared the commission on the view that since the assessee had itself declared the commission on turnover at 0.15% which was more than the percentage considered to turnover at 0.15% which was more than the percentage considered to turnover at 0.15% which was more than the percentage considered to be reasonable by the Tribunal, be reasonable by the Tribunal, Minal Parab ITXA1512_17.odt ITXA1512_17.odt the same should be accepted. Accordingly, Tribunal accepted the commission should be accepted. Accordingly, Tribunal accepted the commission should be accepted. Accordingly, Tribunal accepted the commission declared by the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd., and set aside declared by the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd., and set aside declared by the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd., and set aside the order of CIT (A). Tribunal further noticed that the above stand had the order of CIT (A). Tribunal further noticed that the above stand had the order of CIT (A). Tribunal further noticed that the above stand had been consistently followed by been consistently followed by the Tribunal in various orders. No the Tribunal in various orders. No distinguishing feature could be brought on record by the Revenue. distinguishing feature could be brought on record by the Revenue. distinguishing feature could be brought on record by the Revenue. Therefore, Tribunal following the above orders including the order in Therefore, Tribunal following the above orders including the order in Therefore, Tribunal following the above orders including the order in the case of the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd. in the the case of the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd. in the the case of the assessee i.e., M/s. Goldstar Finvest Pvt. Ltd. in the immediately pre immediately preceding year had upheld the order of the CIT (A). ceding year had upheld the order of the CIT (A).” 7.1 Accordingly, respectfully following the finding of the Hon’ble Accordingly, respectfully following the finding of the Hon’ble Accordingly, respectfully following the finding of the Hon’ble Bombay High Court, the Assessing Officer is Bombay High Court, the Assessing Officer is directed to restrict the directed to restrict the commission income @ 0.15% of the total turnover of the assessee. commission income @ 0.15% of the total turnover of the assessee. commission income @ 0.15% of the total turnover of the assessee.

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 10 to 72/M/2022 However, the assessee failed to provide any such evidence before However, the assessee failed to provide any such evidence before However, the assessee failed to provide any such evidence before the Assessing Officer. The relevant finding of the Assessing Of the Assessing Officer. The relevant finding of the Assessing Of the Assessing Officer. The relevant finding of the Assessing Officer is reproduced as under: reproduced as under:

“5.2 Secondly, in the set aside proceedings the assessee company has Secondly, in the set aside proceedings the assessee company has Secondly, in the set aside proceedings the assessee company has claimed transfer entries & other deductions against the total of hawala claimed transfer entries & other deductions against the total of hawala claimed transfer entries & other deductions against the total of hawala entries worked out by the AO in assessment order stating that such entries worked out by the AO in assessment order stating that such entries worked out by the AO in assessment order stating that such deduction represents entries given to sister concerns etc. First and represents entries given to sister concerns etc. First and represents entries given to sister concerns etc. First and foremost, in support of its claim the assessee company has not submitted foremost, in support of its claim the assessee company has not submitted foremost, in support of its claim the assessee company has not submitted any evidence nor the names of companies to whom such entries were any evidence nor the names of companies to whom such entries were any evidence nor the names of companies to whom such entries were given and whether these entries were accounted for in the given and whether these entries were accounted for in the given and whether these entries were accounted for in the assessment orders of such group companies and therefore such claim is found to be orders of such group companies and therefore such claim is found to be orders of such group companies and therefore such claim is found to be not acceptable. Similarly, Mr. Mukesh M. Choksi was asked whether such not acceptable. Similarly, Mr. Mukesh M. Choksi was asked whether such not acceptable. Similarly, Mr. Mukesh M. Choksi was asked whether such claim was ever made before the Ld. CIT(A) or Hon'ble ITAT in appeal claim was ever made before the Ld. CIT(A) or Hon'ble ITAT in appeal claim was ever made before the Ld. CIT(A) or Hon'ble ITAT in appeal proceedings and was shown copy of F proceedings and was shown copy of Form No. 35A and Form 36 wherein orm No. 35A and Form 36 wherein no such claims were made. In response Mr. Mukesh M. Choksi has no such claims were made. In response Mr. Mukesh M. Choksi has no such claims were made. In response Mr. Mukesh M. Choksi has accepted that such claim was not made in any appeal proceedings nor accepted that such claim was not made in any appeal proceedings nor accepted that such claim was not made in any appeal proceedings nor he has any evidences in support of such claims. Therefore, the claim of he has any evidences in support of such claims. Therefore, the claim of he has any evidences in support of such claims. Therefore, the claim of assessee company for assessee company for allowance/reduction of entries from the hawala allowance/reduction of entries from the hawala entries worked out by AO in assessment order for calculating entries worked out by AO in assessment order for calculating entries worked out by AO in assessment order for calculating commission income is not acceptable and such claim of the assessee commission income is not acceptable and such claim of the assessee commission income is not acceptable and such claim of the assessee company to allow deduction of transfer entries is rejected. company to allow deduction of transfer entries is rejected. company to allow deduction of transfer entries is rejected.” 8.1 The assessee has The assessee has neither filed any such evidence before the Ld. neither filed any such evidence before the Ld. First Appellate Authority nor before us and therefore in such First Appellate Authority nor before us and therefore in such First Appellate Authority nor before us and therefore in such M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 11 to 72/M/2022 circumstances, the claim of the assessee cannot be accepted the circumstances, the claim of the assessee cannot be accepted the circumstances, the claim of the assessee cannot be accepted the ground raised by the assessee is accordingly dismissed. ground raised by the assessee is accordingly dismissed. ground raised by the assessee is accordingly dismissed.

9. In ground No. 7, the a In ground No. 7, the assessee is seeking for allowing 50% of the ssessee is seeking for allowing 50% of the expenses claimed by the assessee in the return of income. According expenses claimed by the assessee in the return of income. According expenses claimed by the assessee in the return of income. According to the Assessing Officer, the assessee has also filed Nil return of to the Assessing Officer, the assessee has also filed Nil return of to the Assessing Officer, the assessee has also filed Nil return of income and claimed expenses against the revenue shown from the income and claimed expenses against the revenue shown from the income and claimed expenses against the revenue shown from the business income. According to the Assessing Officer, commission e. According to the Assessing Officer, commission e. According to the Assessing Officer, commission income has been estimated separately and therefore expenses income has been estimated separately and therefore expenses income has been estimated separately and therefore expenses claimed against the business income cannot be allowed against the claimed against the business income cannot be allowed against the claimed against the business income cannot be allowed against the commission income. According to him, the commission income was commission income. According to him, the commission income was commission income. According to him, the commission income was estimated on net basis and therefore, further allowing the business basis and therefore, further allowing the business basis and therefore, further allowing the business expenses would result income Nil income or expenses would result income Nil income or little little income in the hands of the assessee. The relevant findings of the Assessing Officer hands of the assessee. The relevant findings of the Assessing Officer hands of the assessee. The relevant findings of the Assessing Officer are reproduced as under: are reproduced as under:

“5.3 In respect of expenses to the tune of Rs. 5.3 In respect of expenses to the tune of Rs. 872,664/- claimed against claimed against the commission income as assessed in assessment order, the assessee the commission income as assessed in assessment order, the assessee the commission income as assessed in assessment order, the assessee company has filed only a list of such expenses. As reproduced herein company has filed only a list of such expenses. As reproduced herein company has filed only a list of such expenses. As reproduced herein

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 12 to 72/M/2022 above the director of assessee company Mr. Mukesh Choksi was asked to above the director of assessee company Mr. Mukesh Choksi was asked to above the director of assessee company Mr. Mukesh Choksi was asked to submit evidences in su submit evidences in support of such claims and in response only a chart pport of such claims and in response only a chart giving break up of such expenses was submitted. Further, it was stated giving break up of such expenses was submitted. Further, it was stated giving break up of such expenses was submitted. Further, it was stated by the assessee that all the expenses were claimed in the original by the assessee that all the expenses were claimed in the original by the assessee that all the expenses were claimed in the original assessment proceedings and therefore should be allowed. In support o proceedings and therefore should be allowed. In support of proceedings and therefore should be allowed. In support o such argument copy of letters filed before the DCIT Central Circle 46, such argument copy of letters filed before the DCIT Central Circle 46, such argument copy of letters filed before the DCIT Central Circle 46, Mumbai in the block assessment proceedings were submitted. On Mumbai in the block assessment proceedings were submitted. On Mumbai in the block assessment proceedings were submitted. On perusal of such letters it is noticed that in such letters submission of perusal of such letters it is noticed that in such letters submission of perusal of such letters it is noticed that in such letters submission of details of expenses claimed in return of income details of expenses claimed in return of income are made and it is also are made and it is also written that ledger extracts and copies of vouchers for expenses claimed written that ledger extracts and copies of vouchers for expenses claimed written that ledger extracts and copies of vouchers for expenses claimed in return are submitted. The claim so made by assessee company is in return are submitted. The claim so made by assessee company is in return are submitted. The claim so made by assessee company is considered, however, such claim is found to be not acceptable as the said considered, however, such claim is found to be not acceptable as the said considered, however, such claim is found to be not acceptable as the said letters are filed i letters are filed in original scrutiny assessments submitting details & n original scrutiny assessments submitting details & evidences of expenses claimed in return of income. As per the assessment evidences of expenses claimed in return of income. As per the assessment evidences of expenses claimed in return of income. As per the assessment order in response to Notice u/s. 153A assessee company filed return of order in response to Notice u/s. 153A assessee company filed return of order in response to Notice u/s. 153A assessee company filed return of income declaring NIL income i.e. all the expenses claimed i income declaring NIL income i.e. all the expenses claimed i income declaring NIL income i.e. all the expenses claimed in the return were set off against income offered in return of income and thereafter were set off against income offered in return of income and thereafter were set off against income offered in return of income and thereafter NIL income was filed. As against Nil income returned by the assessee NIL income was filed. As against Nil income returned by the assessee NIL income was filed. As against Nil income returned by the assessee commission income is assessed by the AO taking 2% of hawala entries. commission income is assessed by the AO taking 2% of hawala entries. commission income is assessed by the AO taking 2% of hawala entries. Thus the expenses claimed in the s Thus the expenses claimed in the set aside proceedings are over and et aside proceedings are over and above the expenses claimed in return of income filed in response to above the expenses claimed in return of income filed in response to above the expenses claimed in return of income filed in response to Notice u/s. 153A since the said expenses are claimed against Notice u/s. 153A since the said expenses are claimed against Notice u/s. 153A since the said expenses are claimed against commission income worked out by the AO in the assessment order. This commission income worked out by the AO in the assessment order. This commission income worked out by the AO in the assessment order. This fact is also evident fro fact is also evident from the computation of total income made in the m the computation of total income made in the original assessment orders wherein the income of the assessee is original assessment orders wherein the income of the assessee is original assessment orders wherein the income of the assessee is assessed at only commission income and no other addition or deduction assessed at only commission income and no other addition or deduction assessed at only commission income and no other addition or deduction of income or expenses is made therein. Further, in the assessment orders of income or expenses is made therein. Further, in the assessment orders of income or expenses is made therein. Further, in the assessment orders commission income was worked out by the AO on ad hock basis as Net mmission income was worked out by the AO on ad hock basis as Net mmission income was worked out by the AO on ad hock basis as Net Commission i.e. after considering all incomes and expenses treated as Commission i.e. after considering all incomes and expenses treated as Commission i.e. after considering all incomes and expenses treated as M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 13 to 72/M/2022 added/allowed and therefore the claim of assessee company to allow added/allowed and therefore the claim of assessee company to allow added/allowed and therefore the claim of assessee company to allow expenses against such commission income is not accepta expenses against such commission income is not accepta expenses against such commission income is not acceptable. On such facts of the case there is no scope for allowing further expenses as facts of the case there is no scope for allowing further expenses as facts of the case there is no scope for allowing further expenses as claimed by the assessee company and if, now the claim of the assessee claimed by the assessee company and if, now the claim of the assessee claimed by the assessee company and if, now the claim of the assessee company for expenses over and above claimed in the return of income is company for expenses over and above claimed in the return of income is company for expenses over and above claimed in the return of income is allowed against such net commissi allowed against such net commission income, it will result in absurd on income, it will result in absurd results being losses to the assessee company as demonstrated hereunder results being losses to the assessee company as demonstrated hereunder results being losses to the assessee company as demonstrated hereunder on the basis of claims made in set aside proceedings: on the basis of claims made in set aside proceedings: Particulars Amount ( Amount (₹) Total receipts 56,06,07,314/- 56,06,07,314/ Less : transfer entries Less : transfer entries 24,16,09,563/- 24,16,09,563/ Less : reverser payments/cheque returned Less : reverser payments/cheque returned 39,38,493/- Gross receipts Gross receipts 31,50,59,258/- 31,50,59,258/ Taxable Commission income @ 0.15% on gross Taxable Commission income @ 0.15% on gross 4,72,589/- receipts Add : Income from Business/Other income Add : Income from Business/Other income -- Total Income (A) Total Income (A) 472,589/- Expenses claimed Expenses claimed 872,664/- Taxable Income (A Taxable Income (A-B) (-) 400,075/- 5.4 As shown above if claim of expenses so made by the assessee is 5.4 As shown above if claim of expenses so made by the assessee is 5.4 As shown above if claim of expenses so made by the assessee is genuine and is actually incurred over and above the expenses claimed in genuine and is actually incurred over and above the expenses claimed in genuine and is actually incurred over and above the expenses claimed in the return of income, the result will be loss of Rs. ( the return of income, the result will be loss of Rs. (-)400,075/ )400,075/-. In other words the assessee company forgoes its claim to the extent of 50% only the assessee company forgoes its claim to the extent of 50% only the assessee company forgoes its claim to the extent of 50% only in order to show some income and not losses which would otherwise in order to show some income and not losses which would otherwise in order to show some income and not losses which would otherwise create suspicion and therefore such claim of expenses are not allowable. create suspicion and therefore such claim of expenses are not allowable. create suspicion and therefore such claim of expenses are not allowable. As discussed above, the claim for allowance of furt As discussed above, the claim for allowance of further expenses against her expenses against commission income is not acceptable and the income of the assessee is commission income is not acceptable and the income of the assessee is commission income is not acceptable and the income of the assessee is computed as per the original assessment order dated 08.12.2011. computed as per the original assessment order dated 08.12.2011. computed as per the original assessment order dated 08.12.2011.” 9.1 However, we find that the Tribunal in the case of However, we find that the Tribunal in the case of M/s Goldstar However, we find that the Tribunal in the case of Finvest Private Limited v. DCIT [ Finvest Private Limited v. DCIT [ITA No. 6114 to 6120/M/2012] to 6120/M/2012]

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 14 to 72/M/2022 which is a group concern of the assessee group has allowed the which is a group concern of the assessee group has allowed the which is a group concern of the assessee group has allowed the claim of 50% expenses following finding in other group cases. The claim of 50% expenses following finding in other group cases. The claim of 50% expenses following finding in other group cases. The relevant part of the decision in the case of Goldstar Finvest Pvt. Ltd. relevant part of the decision in the case of Goldstar Finvest Pvt. Ltd. relevant part of the decision in the case of Goldstar Finvest Pvt. Ltd. (supra) reproduced as unde (supra) reproduced as under:

“4. In all these cases of the Group concerns of Sri Mukesh Chowksi In all these cases of the Group concerns of Sri Mukesh Chowksi In all these cases of the Group concerns of Sri Mukesh Chowksi including assessee, the assessments have been made in the wake of including assessee, the assessments have been made in the wake of including assessee, the assessments have been made in the wake of search and seizure action under section 132(1) dated 25.11.2009 search and seizure action under section 132(1) dated 25.11.2009 search and seizure action under section 132(1) dated 25.11.2009 carried out in the cases of M/s Mahavir Securities carried out in the cases of M/s Mahavir Securities Private Limited; M/s Private Limited; M/s Mihir Agencies P. Ltd; M/s Alliance Intermediaries and Network P Ltd Mihir Agencies P. Ltd; M/s Alliance Intermediaries and Network P Ltd Mihir Agencies P. Ltd; M/s Alliance Intermediaries and Network P Ltd and other Group companies including assessee which was managed by and other Group companies including assessee which was managed by and other Group companies including assessee which was managed by Shri Mukesh Choksi himself and his family members. In all the Group Shri Mukesh Choksi himself and his family members. In all the Group Shri Mukesh Choksi himself and his family members. In all the Group concerns as well as in the case concerns as well as in the case of the assessee, the main issues involved of the assessee, the main issues involved were determination of commission #ecome or net profit for providing were determination of commission #ecome or net profit for providing were determination of commission #ecome or net profit for providing bogus share trading entries and other accommodation entries. bogus share trading entries and other accommodation entries. bogus share trading entries and other accommodation entries. Department has held that the commission/net profit from such bogus Department has held that the commission/net profit from such bogus Department has held that the commission/net profit from such bogus entries should be entries should be taken at 2%. We find that, in the various Tribunal taken at 2%. We find that, in the various Tribunal orders, which have been referred to above as well as in the case of the orders, which have been referred to above as well as in the case of the orders, which have been referred to above as well as in the case of the assessee. itself, the net profit rate of 0.15% have been accepted. Not assessee. itself, the net profit rate of 0.15% have been accepted. Not assessee. itself, the net profit rate of 0.15% have been accepted. Not only that 50% of the expenses claimed have also accepted, in o only that 50% of the expenses claimed have also accepted, in o only that 50% of the expenses claimed have also accepted, in other words, only balance claim of expenditure of 50% have been confirmed. words, only balance claim of expenditure of 50% have been confirmed. words, only balance claim of expenditure of 50% have been confirmed. The relevant observation of the Tribunal in the case of M/s Mihir The relevant observation of the Tribunal in the case of M/s Mihir The relevant observation of the Tribunal in the case of M/s Mihir Agencies Pvt. Ltd reads as under: Agencies Pvt. Ltd reads as under: "6. After considering the relevant finding given in the impugned After considering the relevant finding given in the impugned After considering the relevant finding given in the impugned orders as well as orders as well as submission made by the parties, we find that the submission made by the parties, we find that the assessee is one of the group concerns of Mukesh Chokshi Group. A assessee is one of the group concerns of Mukesh Chokshi Group. A assessee is one of the group concerns of Mukesh Chokshi Group. A M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 15 to 72/M/2022 search and seizure action u/s 132(1) was conducted in the case of the search and seizure action u/s 132(1) was conducted in the case of the search and seizure action u/s 132(1) was conducted in the case of the assessee along with the other group companies on 25.11.2009 and on assessee along with the other group companies on 25.11.2009 and on assessee along with the other group companies on 25.11.2009 and on subsequent dates, wherein it was found that all these group companies equent dates, wherein it was found that all these group companies equent dates, wherein it was found that all these group companies belonging to Shri Mukesh Chokshi and his family members were belonging to Shri Mukesh Chokshi and his family members were belonging to Shri Mukesh Chokshi and his family members were involved in accommodation entries for various kinds of activities, has involved in accommodation entries for various kinds of activities, has involved in accommodation entries for various kinds of activities, has applied a commission income @ 2%. Before the CIT(A), vario applied a commission income @ 2%. Before the CIT(A), vario applied a commission income @ 2%. Before the CIT(A), various appellate orders were relied upon which has been noted by the CIT(A) appellate orders were relied upon which has been noted by the CIT(A) appellate orders were relied upon which has been noted by the CIT(A) in the impugned order at para 2.1. The Ld. CIT(A) after referring to the in the impugned order at para 2.1. The Ld. CIT(A) after referring to the in the impugned order at para 2.1. The Ld. CIT(A) after referring to the various material found at the time of search of Shir Mukesh Chokshi various material found at the time of search of Shir Mukesh Chokshi various material found at the time of search of Shir Mukesh Chokshi and his employees and the statements wherei and his employees and the statements wherein various rates of n various rates of commission charged have been stated ranging from 0.15% to 2% on commission charged have been stated ranging from 0.15% to 2% on commission charged have been stated ranging from 0.15% to 2% on different kind of accommodation entries. Accordingly, Ld. CIT(A) different kind of accommodation entries. Accordingly, Ld. CIT(A) different kind of accommodation entries. Accordingly, Ld. CIT(A) updated the application of net profit rate of2% as applied by the AO. updated the application of net profit rate of2% as applied by the AO. updated the application of net profit rate of2% as applied by the AO.

7. We find that in the case of Gold St We find that in the case of Gold Star Finvest Ltd, which is a ar Finvest Ltd, which is a sister concern of the assessee, on similar facts for the assessment year sister concern of the assessee, on similar facts for the assessment year sister concern of the assessee, on similar facts for the assessment year 2003-04 and 2004 04 and 2004-05, the Tribunal after referring to various decisions 05, the Tribunal after referring to various decisions have upheld the percentage of commission on net profit @ 0.15% have upheld the percentage of commission on net profit @ 0.15% have upheld the percentage of commission on net profit @ 0.15% which was quite consis which was quite consistent with the statement recorded at the time of tent with the statement recorded at the time of search. Accordingly, following the judicial precedence in the case of the search. Accordingly, following the judicial precedence in the case of the search. Accordingly, following the judicial precedence in the case of the assessee's sister concern (supra), we uphold the rate of commission / assessee's sister concern (supra), we uphold the rate of commission / assessee's sister concern (supra), we uphold the rate of commission / rate of net profit from such activities at 0.15%. Accordingly, g profit from such activities at 0.15%. Accordingly, ground no. profit from such activities at 0.15%. Accordingly, g 4 & 5 as raised by the assessee are allowed. 4 & 5 as raised by the assessee are allowed.

8. As regards the disallowance of business expenses, the Ld. CIT(A) As regards the disallowance of business expenses, the Ld. CIT(A) As regards the disallowance of business expenses, the Ld. CIT(A) has directed the AO not to allow any expenses against the net income has directed the AO not to allow any expenses against the net income has directed the AO not to allow any expenses against the net income of 2% determined. We find that the Tribunal in the case of Gold of 2% determined. We find that the Tribunal in the case of Gold of 2% determined. We find that the Tribunal in the case of Gold Star Finvest Ltd have disallowed only 50% of the business expenses. Finvest Ltd have disallowed only 50% of the business expenses. Finvest Ltd have disallowed only 50% of the business expenses. Accordingly, following the judicial precedence, which is applicable Accordingly, following the judicial precedence, which is applicable Accordingly, following the judicial precedence, which is applicable mutatis mutandis in the case of the assessee also, we direct the AO to mutatis mutandis in the case of the assessee also, we direct the AO to mutatis mutandis in the case of the assessee also, we direct the AO to M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 16 to 72/M/2022 allow the business expenses to the extent of 50%. allow the business expenses to the extent of 50%. Accordingly, ground Accordingly, ground no.8 is treated as partly allowed. no.8 is treated as partly allowed.

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 17 to 72/M/2022 the percentage of commission at 0.15%, which is more than the the percentage of commission at 0.15%, which is more than the the percentage of commission at 0.15%, which is more than the percentage of commission considered to be reasonable by the Tribunal percentage of commission considered to be reasonable by the Tribunal percentage of commission considered to be reasonable by the Tribunal in the case of Palresha & Co and Kiran & Co (supra) in similar type of in the case of Palresha & Co and Kiran & Co (supra) in similar type of in the case of Palresha & Co and Kiran & Co (supra) in similar type of transactions. The theory of Assessing transactions. The theory of Assessing Officer to treat the entire deposit Officer to treat the entire deposit as unexplained cash credits, cannot be accepted in the light of as unexplained cash credits, cannot be accepted in the light of as unexplained cash credits, cannot be accepted in the light of assessment orders in the case of beneficiaries and also in the light of assessment orders in the case of beneficiaries and also in the light of assessment orders in the case of beneficiaries and also in the light of the fact that assessee is only concerned with the commission earned on the fact that assessee is only concerned with the commission earned on the fact that assessee is only concerned with the commission earned on providing accommodation entries. We, therefore, of the view that since ommodation entries. We, therefore, of the view that since ommodation entries. We, therefore, of the view that since the assessee itself has declared the commission on turnover at 0.15% the assessee itself has declared the commission on turnover at 0.15% the assessee itself has declared the commission on turnover at 0.15% which is more than the percentage considered to be reasonable by the which is more than the percentage considered to be reasonable by the which is more than the percentage considered to be reasonable by the Tribunal in the case of Palresha & Co and Kiran & Co (supra) Tribunal in the case of Palresha & Co and Kiran & Co (supra) Tribunal in the case of Palresha & Co and Kiran & Co (supra), the same should be accepted. We, accordingly, accept the commission declared should be accepted. We, accordingly, accept the commission declared should be accepted. We, accordingly, accept the commission declared by the assessee and set aside the order of the CIT (A) in this regard." by the assessee and set aside the order of the CIT (A) in this regard." by the assessee and set aside the order of the CIT (A) in this regard."

6. It is further noticed by us that this stand has been constantly 6. It is further noticed by us that this stand has been constantly 6. It is further noticed by us that this stand has been constantly accepted by the Tribunal in various or accepted by the Tribunal in various orders, details of which have been ders, details of which have been given by the ld. Counsel, as mentioned above. We have gone through given by the ld. Counsel, as mentioned above. We have gone through given by the ld. Counsel, as mentioned above. We have gone through the orders as enclosed in the paper book filed by the assessee and find the orders as enclosed in the paper book filed by the assessee and find the orders as enclosed in the paper book filed by the assessee and find that the ld. AR has correctly stated that this issue has been that the ld. AR has correctly stated that this issue has been that the ld. AR has correctly stated that this issue has been unanimously accepted b unanimously accepted by the Tribunal in various cases including the y the Tribunal in various cases including the case of assessee. Nothing has been brought on record by the ld. DR to case of assessee. Nothing has been brought on record by the ld. DR to case of assessee. Nothing has been brought on record by the ld. DR to distinguish these cases. Therefore, respectfully following the orders of distinguish these cases. Therefore, respectfully following the orders of distinguish these cases. Therefore, respectfully following the orders of the Tribunal including the order of Tribunal in assessee's own case the Tribunal including the order of Tribunal in assessee's own case the Tribunal including the order of Tribunal in assessee's own case in the immediately preceding year, we find that the ld. CIT(A) has rightly the immediately preceding year, we find that the ld. CIT(A) has rightly the immediately preceding year, we find that the ld. CIT(A) has rightly deleted the addition, no interference is called for in the order of ld. deleted the addition, no interference is called for in the order of ld. deleted the addition, no interference is called for in the order of ld. CIT(A), therefore, the same is upheld. Grounds No.1 and 2 taken by the CIT(A), therefore, the same is upheld. Grounds No.1 and 2 taken by the CIT(A), therefore, the same is upheld. Grounds No.1 and 2 taken by the Revenue stand dismissed". Revenue stand dismissed". Thus, following the judicial precedence in cases of various Groups wing the judicial precedence in cases of various Groups wing the judicial precedence in cases of various Groups concerns as well as that of assessee concerns as well as that of assessee decided by the Tribunal, we hold decided by the Tribunal, we hold

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 18 to 72/M/2022 that net profit rate / commission should be taken at 0.15% and the that net profit rate / commission should be taken at 0.15% and the that net profit rate / commission should be taken at 0.15% and the expenditure claimed should be allowed to the extent of 50% from expenditure claimed should be allowed to the extent of 50% from expenditure claimed should be allowed to the extent of 50% from such income. Accordingly, these two issues are decided in favour of the income. Accordingly, these two issues are decided in favour of the income. Accordingly, these two issues are decided in favour of the assessee. As regards the other grounds taken, the same have not been assessee. As regards the other grounds taken, the same have not been assessee. As regards the other grounds taken, the same have not been argued before us on the ground that they will become purely academic. argued before us on the ground that they will become purely academic. argued before us on the ground that they will become purely academic. Accordingly, the appeal of the assessee is t Accordingly, the appeal of the assessee is treated as allowed. As stated reated as allowed. As stated in the operating part of the order that similar issues are involved in all in the operating part of the order that similar issues are involved in all in the operating part of the order that similar issues are involved in all the appeals, therefore, this finding will apply mutatis mutandis in all the appeals, therefore, this finding will apply mutatis mutandis in all the appeals, therefore, this finding will apply mutatis mutandis in all the impugned years. Thus, all the appeals filed by the assessee are the impugned years. Thus, all the appeals filed by the assessee are the impugned years. Thus, all the appeals filed by the assessee are treated as allowed. llowed.”

M/s Alag Securities Pvt. Ltd M/s Alag Securities Pvt. Ltd 19 to 72/M/2022

in the assessment years 2008 The ground raised in the assessment years 2008-09 to 2010

11. The ground raised in the assessment years 2008 are identical to grounds raised in assessment year 2005 are identical to grounds raised in assessment year 2005 are identical to grounds raised in assessment year 2005-06, therefore, following our finding in assessment year 2005 therefore, following our finding in assessment year 2005 therefore, following our finding in assessment year 2005-06. The grounds of the assessee in AY 2008 of the assessee in AY 2008-09 to 2010- -11 are decided mutatis mutandis.