IN INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA No.7426/M/2014 Assessment Year: 2010-11 M/s. Readymade Steel India P. Dy. Commissioner of Income Ltd., tax, Circle-7(2), C/o M/s. U.B. Lakhani & Co., R.No.624, A/102, Neel Kanthdhara, Vs. Aayakar Bhavan, Opp. Dhanwanti Hospital, 6th Floor, N.S. Road, Mulund (W), M.K. Road, Mulund 80 Mumbai 400020 PAN: AADCR2540N (Appellant) (Respondent) Present for: Assessee by : Shri Jigna Parekh, A.R. Revenue by : Shri Triparthi, D.R. Date of Hearing : 05.10.2016 Date of Pronouncement : 19.10.2016 ORDER Per Sanjay Garg, Judicial Member: present appeal has been preferred by assessee against order dated 29.10.2014 of Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT(A)] relevant to assessment year 2010-11. 2. assessee has taken following revised grounds of appeal: grounds of appeal mentioned herein below are without prejudice to one another. 1. Ld AO erred in computing amount of Rs.24,89,60,272/-, instead of Rs.24,16,32,566/-, despite accepting bifurcated fi gures of genui ne turno ver and acco mmodation turno ver Rs.73,27,706/- of accommodation turnover as against correct figure of such turnover. CIT (A) erred in confirming it. ITA No.7426/M/2014 2 M/s. Readymade Steel India P. Ltd. 2. Ld AO erred in adopting rate of 3% for estimating income of appellant on impugned acco mmo dati on turnover witho ut bri nging any comparable case on record, as well as rejecting rate of 1% declared by appellant itself without assigning any reason for such rejection. CIT (A) erred in confirming it. appellant craves leave to add, alter, amend, delete or withdraw one or more grounds of appeal. 3. brief facts of case are that survey action under section 133A of Income Tax Act was carried out at premises of assessee and it was noticed that assessee company was providing accommodation bills to certain parties apart from doing actual business of trading in ferrous and non ferrous goods. turnover declared by assessee was bifurcated into two parts viz. i) actual business turnover and ii) turnover due to accommodation bills. assessee declared net profit from turnover of accommodation bills at rate of 1% in return of income. However, Assessing Officer (hereinafter referred to as AO) estimated same at rate of 3% of turnover. Being aggrieved by above order of AO, assessee preferred appeal before Ld. CIT(A). 4. It was pleaded before Ld. CIT(A) that profit at rate of 3% was excessive; that assessee has rightly declared profit at rate of 1% of turnover of accommodation bills. Ld. CIT(A) , however, did not accept contention of assessee and confirmed addition made by AO in this respect. Being aggrieved by above order, assessee has come in appeal before us. 5. We have heard rival contentions and have also gone through records. assessee, before us, has not disputed that it was indulged in providing accommodation bills to certain parties. However, it has been submitted that estimation of profits at rate of 3% were very excessive. ITA No.7426/M/2014 3 M/s. Readymade Steel India P. Ltd. It was also explained that out of total turnover of Rs.32.3 crores, genuine turnover of actual business carried out was only Rs.8.2 crores and profit there from has been declared at Rs.82,75,831/- which has accordingly been taxed as business income of assessee. Ld. A.R. has further submitted that assessee has declared income of accommodation bills at rate of 1% of turnover which was actually received by assessee. That AO in impugned assessment order himself has mentioned that there was no mention of cash commission in survey report. But assessee, despite that, itself, has offered for taxation actual income received from providing accommodation bills and further that assessee had not claimed any expenses or sub commission in respect of said declared income. Ld. A.R. has relied upon certain decisions of Tribunal wherein commission income from such accommodation bills has been estimated or accepted by Tribunal even at rate which is less than 1% of turnover. She has mainly relied upon decision of co-ordinate bench of Tribunal in case of Saroj Anil Steel Pvt. Ltd. vs. ITO . She has stated that in said case also that assessee was in similar business as that of present assessee and in said case commission income was estimated by AO at rate of 1% of turnover. But Ld. CIT(A) in appellate proceedings directed AO to estimate income of commission from hawala transactions at rate of 0.4% of gross turnover. Tribunal, however, directed AO to estimate income at rate of 1% of total turnover and also directed to allow certain administrative expenses there from. Ld. A.R. has stated that in case of assessee no expenditure has been claimed. Even estimation of income at rate of 1% of accommodation bills turnover has also been approved by Tribunal. Considering above submissions of assessee and after going through decision of Tribunal, though we find that there cannot be fixed criteria to adopt as to at what rate commission income in such cases can be adopted for turnover, however, considering facts of case and submissions of ITA No.7426/M/2014 4 M/s. Readymade Steel India P. Ltd. Ld. A.R., in our view, estimation of commission income at rate of 3% in absence of any evidence, any calculation or other basis or any example of similarly placed case seems to be on higher side. assessee, on other hand, has supported its case while providing all details including actual amount of turnover and actual amount received by assessee and AO has not pointed out any peculiar point on basis of which calculation and income offered by assessee can be faulted with. We accordingly restrict income offered from accommodation bills turnover at rate of 1% as against 3% estimated by AO. Before parting, it is made clear that our above observations will not have any bearing in any other case as such type of cases have to be decided on their own merits. 6. In result, appeal of assessee is treated as allowed. Order pronounced in open court on 19.10.2016. Sd/- Sd/- (Ashwani Taneja) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 19.10.2016. * Kishore, Sr. P.S. Copy to: Appellant Respondent CIT, Concerned, Mumbai CIT (A) Concerned, Mumbai DR Concerned Bench //True Copy// [ By Order Dy/Asstt. Registrar, ITAT, Mumbai. M/s. Readymade Steel India P. Ltd. v. Dy. Commissioner of Income-tax, Circle-7(2), Mumbai