SAROJ ANIL STEEL P. LTD, THANE v. ITO WD NO 3(4), MUMBAI

ITA 8933/MUM/2010 | 1997-1998
Pronouncement Date: 04-04-2014 | Result: Dismissed

Appeal Details

RSA Number 893319914 RSA 2010
Assessee PAN AAFCS0196M
Bench Mumbai
Appeal Number ITA 8933/MUM/2010
Duration Of Justice 3 year(s) 3 month(s) 13 day(s)
Appellant SAROJ ANIL STEEL P. LTD, THANE
Respondent ITO WD NO 3(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 04-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 04-04-2014
Date Of Final Hearing 10-03-2014
Next Hearing Date 10-03-2014
Assessment Year 1997-1998
Appeal Filed On 22-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI SANJAY ARORA ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEM BER . / ITA NO. 8932 /MUM./201 0 ( / ASSESSMENT YEAR : 1996 97 ) . / ITA NO. 8933 /MUM./201 0 ( / ASSESSMENT YEAR : 1997 98 ) . / ITA NO. 5853 /MUM./201 2 ( / ASSESSMENT YEAR : 1998 99 ) M/S. SAROJ ANIL STEEL P. LTD. 21/103 TULSIDHAM BUILDING NO.21 GHODBUNDER ROAD THANE .. / APPELLANT V/S INCOME TAX OFFICER WARD 3(4) THANE .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAFCS0196M / ASSESSEE BY : MR. DINESH S. SHAH / REVENUE BY : MR. ASHOK SURI / DATE OF HEARING 10 .0 3 .201 4 / DATE OF ORDE R 04.04.2014 / ORDER / PER BENCH THE AFORESAID APPEAL S HAVE BEEN PREFERRED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER DATED 15 TH SEPTEMBER 2010 FOR THE M/S. SAROJ ANIL STEEL P. LTD. 2 ASSESSMENT YEAR 1996 97 AND 1997 98 AND ORDER DATED 16 TH JULY 2012 FOR THE ASSESSMEN T YEAR 1998 99 RESPECTIVELY PASSED BY THE LEARNED COMMISSIONER (APPEALS) I THANE FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) R/W SECTION 254 OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ) . THE APPEALS FOR THE ASSESSMENT YEAR 1996 97 AND 1997 98 WERE HEARD ON 10 TH MARCH 2014 AND THE APPEAL FOR THE ASSESSMENT YEAR 1998 99 WAS HEARD ON 11 TH MARCH 2014. 2 . SINCE ALL THESE APPEALS PERTAIN TO THE SAME ASSESSEE INVOLVING COMMON ISSUES EXCEPT VARIATION IN FIGURES ARISING OUT OF IDENTICAL SET OF FACTS AND CIRCUMSTANCES THEREFORE AS A MATTER OF CONVENIENCE THESE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. HOWEVER IN ORDER TO UNDERSTAND THE IMPLICATION IT WOULD BE NECESSARY TO TAKE NOTE OF THE FACTS OF ONE APPEAL. WE ARE A CCORDINGLY NARRATING THE FACTS AS THEY APPEAR IN THE APPEAL IN ITA NO. 8932 /MUM./201 0 FOR ASSESSMENT YEAR 1996 9 7. 3 . THE SOLE ISSUE INVOLVED WHICH IS COMMON IN ALL THE YEARS UNDER APPEAL IS DETERMINATION OF CORRECT HAWALA INCOME IN THE HANDS OF THE ASS ESSEE. FOR THE SAKE OF READY REFERENCE THE GROUNDS RAISED BY THE ASSESSEE IN THE ASSESSMENT YEAR 1996 97 ARE REPRODUCED HEREIN BELOW: (A) THE ASSESSING OFFICER AS WELL AS COMMISSIONER OF INCOME TAX (APPEAL) HAS FAILED TO DETERMINE THE CORRECTLY THE HA WALA INCOME. THE APPELLANT HAS ISSUED BILLS I.E. SALES BILLS TO THE COMMERCIAL WORLD I.E. THE NEEDY PERSONS. WHO HAS PAID THE APPELLANT THE HAWALA COMMISSION. (B) THE APPELLANT TRIBUNAL HAS GIVEN CLEAR DIRECTION TO COMPUTE HAWALA INCOME AND ONE CAN NOT EARN INCOME FROM OWN CONCERNS OR SISTER CONCERNS OR GROUPS CONCERNS AND TRANSACTION OF SUCH CONCERNS AND OR GROUPS BE EXCLUDED FROM THE TURNOVER. (C) THE AO AS WELL AS CIT(A) OUGHT TO DETERMINE TURNOVER AS THE TRANSACTIONS WITH COMMERCIAL WORLD ON WHICH APPELLANT HAS EARNED INCOME. M/S. SAROJ ANIL STEEL P. LTD. 3 (D) THE AO OUGHT TO HAVE REDUCED THE TRANSACTION WITH THE SISTER CONCERNS GROUP CONCERNS TRANSACTIONS WHICH ARE DONE TO INFLATE SALE FOR OBTAINING BANK FACILITIES ON WHICH NO COMMISSION IS EARNED. (E) THE AO AS WELL AS CIT (A) OUGHT TO HAVE CONSIDERED THE SUBMISSION AN AFFIDAVITS AND VARIOUS DOCUMENTARY PROOF FILED WITH THE AO AS WELL AS TO THE CIT (A) THAT THE APPELLANT HAS NOT EARNED ANY COMMISSION INCOME FROM SISTER OR GROUP CONCERNS. 2)(A) THE AO EARED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF CASE BY ASSESSING THE INCOME OF RS.15 40 950/ - ON BASIS OF TOTAL TURNOVER AT THE RATE OF 1% OF TOTAL TURNOVER OF RS.15 40 95 400/ - . (B) APPELLANT HAD EARNED COMMISSION INCOME ON BILLS ISSUED TO OUTSIDE PARTY. INCOME FROM T HIS ACTIVITY CAN BE COMPUTED ON THE BASIS OF SALES MADE TO OUTSIDER TO WHOM BILLS ARE ISSUED FOR EARNING NOMINAL COMMISSION. THEREFORE THOSE BILLS ON WHICH INCOME IS EARNED WILL BE TAKEN AS TURNOVER OR BILLS AMOUNTS BE TAKEN FOR A TURNOVER AND ALL THE OFF ICE RUNNING EXPENSES SHOULD BE ALLOWED FROM INCOME COMPUTED ON ABOVE TURNOVER I.E. 1 % OF COMMERCIAL HAWALA TURNOVER. (C) IN THIS TYPE OF BUSINESS INCOME CAN BE EARNED ON COMMERCIAL TURNOVER I.E. SALES MADE TO THIRD PARTY (OTHER THAN SISTER CONCERNS). TH EREFORE INCOME SHOULD BE COMPUTED ACCORDINGLY. THE SISTER CONCERN TRANSACTION ON WHICH NO COMMISSION WAS EARNED SO SUCH TRANSACTION SHOULD BE REDUCED FROM TOTAL TURNOVER AS FOLLOWS: - TOTAL TURNOVER R S .15 57 00 478 LESS: TURNOVER WITH SISTERS CONCERNS/GROUP R S .10 91 00 478 CONCERNS SALE. COMMERCIAL HAWALA TURNOVER. RS. 4 66 00 000 ========== THE BUSINESS INCOME WILL BE 1 % OF HAWALA COMMERCIAL TURNOVER OF I.E. 1 % OF RS.4 66 00 000/ - WHICH COMES TO RS .4 66 00 0 / - . DURING THE YEAR UNDER CONSIDERATION APPELLANT MADE TOTAL TURNOVER OF RS.15 57 00 478/ - OUT OF WHICH TURNOVER WITH SISTER CONCERN IS OF RS . 10 91 00 478/ - W HICH IS TO BE REDUCED FROM TOTAL TURNOVER WHILE DETERMINING THE COMMERCIAL HAWALA TURNOVER . 4 . BRIEF FACTS WHICH ARE PERMEATING THROUGH ALL THE YEARS UNDER APPEALS ARE THAT A SURVEY ACTION UNDER SECTION 133A WAS CONDUCTED BY THE REVENUE AT THE BUSINESS PREMISES OF THE ASSESSEE ON 17 TH M/S. SAROJ ANIL STEEL P. LTD. 4 DECEMBER 1998. DURING THE COURSE OF SURVEY IT WAS FOUND THAT T HE ASSESSEE IS NOT ACTUALLY DOING BUSINESS IN IRON/STEEL BUT IS MAINLY ENGAGED IN ISSUING BOGUS SALE BILLS WITHOUT ACTUALLY DELIVERING THE GOODS EXCEPT IN A VERY FEW TRANSACTIONS. IN OTHER WORDS THE ASSESSEE WAS MAINLY INVOLVED IN HAWALA TRANSACTIONS I. E. ACCOMMODATION ENTRIES. THE ASSESSING OFFICER VIDE ORIGINAL ASSESSMENT ORDER DATED 26 TH MARCH 2002 HAS TAKEN THE SALES AT ` 15 57 00 478. HOWEVER FOR THE PURPOSE OF CALCULATING NET COMMISSION HE HAS ESTIMATED THE INCOME @ 1% OF THE SALES IN THE FOLL OWING MANNER: TOTAL SALES AS PER PROFIT & LOSS ACCOUNT ` 15 57 00 478 LESS: SALES TO SISTER CONCERN ` 16 05 068 NET TURNOVER FOR ESTIMATING COMMISSION @ 1% ` 15 40 95 410 AMOUNT OF 1% COMMISSION WORKED OUT ` 15 40 954 5 . THE LEARNED COMMISSIONER (APP EALS) DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INCOME OF COMMISSION FROM HAWALA TRANSACTION @ 0.4% OF GROSS TURNOVER. 6 . IN THE SECOND APPEAL THE TRIBUNAL VIDE ORDER DATED 31 ST MARCH 2005 DIRECTED T HE ASSESSING OFFICER TO ESTIMATE THE INCOME @ 1% OF THE TOTAL TURNOVER AND ALSO DIRECTED TO ALLOW CERTAIN ADMINISTRATIVE EXPENSES THEREFROM. THE RELEVANT OBSERVATIONS AND THE FINDINGS OF THE TRIBUNAL IN THE FIRST ROUND AS GIVEN IN PAGE 150 AND 151 ARE AS UNDER: 6. LEARNED REPRESENTATIVES HAVE VERY FAIRLY AGREED THAT THERE ARE NO PRECEDENTS ON THE ISSUE AS TO WHAT SHOULD CONSTITUTE REASONABLE PROFIT FROM THE ACTIVITY OF ISSUING HAWALA BILLS FOR SALE OF IRON AND STEEL. SHRI BHUJLE TRIED TO RELY UPON THE TRIBUNAL DECISION IN RESPECT OF BILL DISCOUNTING CASES BUT WHEN IT WAS POINTED OUT TO M/S. SAROJ ANIL STEEL P. LTD. 5 HIM THAT BILL DISCOUNTING BUSINESS AND HAWALA BUSINESS ARE NOT COMPARABLE HE FAIRLY DID NOT PRESS THE POINT FURTHER. HE HOWEVER SUBMITTED THAT NOT MORE THAN 2% NET PR OFIT CAN BE JUSTIFIED IN SUCH A LINE OF ACTIVITY. ON THE OTHER HAND SHRI REDDY SUBMITTED THAT EVEN HAWALA COMMISSION IS TAKEN AT 1% NOT MORE THAN 1% TO 15% EXPENSES CAN BE JUSTIFIED. IT WAS THUS CONTENDED THAT 85% NET PROFIT IS THE LEAST POSSIBLE NET PROF IT FROM THIS LINE OF ACTIVITY. RESPECTIVE STANDS WERE ALSO REITERATED BEFORE US. WE ARE OF THE VIEW THAT ALL THAT IS REQUIRED FOR US IS TO ESTIMATE A REASONABLE BASIS ON WHICH INCOME FROM THIS ACTIVITY CAN BE COMPUTED. THE GUIDANCE IS AVAILABLE FROM THE OR DER OF THE ASSESSING OFFICER HIMSELF. TH E E ASSESSING OFFICER HAS OBSERVED THAT THE NORMAL RATE OF HAWALA COMMISSION RANGES FROM 1% TO 2%. THAT MEANS 1% HAWALA COMMISSION RATE CANNOT BE SAID TO BE AN UNREALISTIC RATE. THE NEXT QUESTION THEN IS AS TO WHAT SHOULD BE THE EXPENSES DEDUCTIBLE FROM THIS TO ARRIVE AT NET PROFIT RATE. THE ASSESSEE BEFORE US IS AN ARTIFICIAL JURIDICAL PERSON AND THE ASSESSEE HAS TO INCUR SOME EXPENSES TO HAVE ITS CONTINUED LEGAL EXISTENCE AND TO MEET THE COSTS OF RUNNING THE OFFIC E ETC. THESE EXPENSES SHOULD BE ALLOWED AS A DEDUCTION. THE ASSESSEE HAS ALSO CONTENDED THAT A DEDUCTION SHOULD ALSO BE ALLOWED IN RESPECT OF COMMISSION THAT THE ASSESSEE HAS TO PAY TO THOSE WHO GET HIM THE BUSINESS OF HAWALA ENTRIES. SINCE WE HAVE ALREADY ADOPTED A MINIMUM COMMISSION RATE OF 1%. WE DO NOT CONSIDER IT NECESSARY TO ALLOW FURTHER DEDUCTION IN RESPECT OF SUCH A COMMISSION. THIS CLAIM MUST BE DECLINED. IN EFFECT THE NET INCOME FROM THIS BUSINESS IS TO BE ARRIVED AT BY REDUCING FROM 1% OF TOTA L TURNOVER THE OFFICE EXPENSES AND THE EXPENSES INCURRED FROM CONTINUED LEGAL EXISTENCE OF THE COMPANY (SUCH AS FILING FEES ROC FEES AUDIT FEES AND EXPENSES ON STATUTORY COMPLIANCES) AND ALSO THE DIRECTORS REMUNERATION IN CASE THE ASSESSEE HAS CLAIMED T HE SAME. THE NET PROFIT IS TO BE COMPUTED ACCORDINGLY. ACCORDINGLY WE RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR RE COMPUTE THE PROFIT ON THE ABOVE LINE. 8. WE MAY MENTION THAT PARTIES HAVE ADDRESSED US AT LENGTH ON OTHER PERIPHERAL ASPE CTS OF THE MATTER BUT IN VIEW OF THE ESTIMATION BASIS EXPLAINED ABOVE WHICH WE CONSIDER TO BE FAIR AND REASONABLE WE SEE NO NEED TO DEAL WITH THOSE ISSUES IN DETAIL. THE MATTER STANDS M/S. SAROJ ANIL STEEL P. LTD. 6 RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE ABOVE DIRECTI ONS. 7 . IN PURSUANCE OF THE ABOVE THE ASSESSING OFFICER PASSED ASSESSMENT ORDER DATED 30 TH NOVEMBER 2006 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT ` 13 73 980 AFTER ALLOWING CERTAIN EXPENDITURE. AGGRIEVED BY THE SAID ORDER WITH REGARD TO ALLOWABILI TY OF CERTAIN EXPENDITURE S THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS) WHO VIDE ORDER DATED 14 TH AUGUST 2007 DISMISSED THE APPEAL OF THE ASSESSEE. ON FURTHER APPEAL BEFORE THE TRIBUNAL THE CO ORDINATE BENCH VIDE ORDER DA TED 11 TH SEPTEMBER 2008 IN THE SECOND ROUND AGAIN SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER AFTER OBSERVING AND HOLDING AS UNDER: 3.1 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ESTIMATION OF INCOME FROM HAWALA TRANSACTIONS. GROSS INCOME FROM HAWALA TRANSACTIONS HAS ALREADY BEEN UPHELD BY THE TRIBUNAL AT THE RATE OF 1%. THE REAL DISPUTE IS REGARDING ALLOWANCE OF EXPENSES AGAINST THE AFORESAID GROSS INCOME. THE TRIBUNAL IN APPEAL AGAINST THE ORIGINAL ASSESSMENT HAD HELD THAT OFFICE EXPENSES AS WELL AS THE EXPENSES FOR LEGAL EXISTENCE OF THE COMPANY SUCH AS FILING FEES ROC FEES / AUDIT FEES AND EXPENSE ON STATUTORY COMPLIANCES HAVE TO BE ALLOWED AND THAT THE COMMISSION FOR PROMOTION OF SALES I S NOT TO BE ALLOWED. THE ASSESSING OFFICER IN THE FRESH ASSESSMENT AS PER THE DIRECTIONS OF THE TRIBUNAL HAS ALLOWED DIRECTORS; REMUNERATIONS AUDITORS FEES FILING FEES AND OTHER STATUTORY EXPENSES BUT OUT OF THE BALANCE EXPENDITURE HE HAS ALLOWED ONLY 6 0 000 AS OFFICE EXPENSES. THE CASE OF THE ASSESSEE IS THAT THE ENTIRE ADMINISTRATIVE EXPENDITURE WHICH HAD BEEN ACTUALLY INCURRED HAVE TO BE ALLOWED. ON CAREFUL PERUSAL OF THE EXPENSES CLAIMED WE FIND THAT THE ASSESSEE HAS ALSO CLAIMED EXPENSES ON ACCOUNT OF WAREHOUSING CHARGES COMMISSION SALES PROMOTION BROKERAGE EXPENDITURE ON SALE PROMOTION COMMISSION AND BROKERAGE IS ACTUALLY NOT TO BE ALLOWED AS PER THE EARLIER DIRECTIONS OF THE TRIBUNAL. FURTHER AS THE ASSESSEE IS ONLY PROVIDING HAWALA ENTRIES W ITHOUT ANY ACTUAL PURCHASE AND SALE OF GOODS WAREHOUSING M/S. SAROJ ANIL STEEL P. LTD. 7 CHARGES CANNOT BE ALLOWED HAS RIGHTLY HELD BY THE LEARNED CIT(A). ALL THE REMAINING EXPENSES INCURRED BY THE ASSESSEE FOR THE RUNNING OF THE OFFICE INCLUDING OFFICE RENOVATION CONVEYANCE ETC. HAVE TO BE ALLOWED PROVIDED THE SAME ARE FOUND TO BE GENUINE. THE ASSESSING OFFICER HAS ESTIMATED THE EXPENSES WITHOUT MAKING ANY EXAMINATION OF GENUINENESS OF EXPENDITURE CLAIMED WHICH IS NOT CORRECT. EXPENSES CAN BE ESTIMATED ONLY WHEN THESE ARE NOT PROPERL Y VOUCHED OR ARE FOUND TO BE BOGUS. BUT THIS ASPECT HAS NOT BEEN EXAMINED. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR PASSING A FRESH ORDER IN THE LIGHT OF OBSERVATIONS MADE ABOVE AND AFT ER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 8 . THUS IN THIS ORDER THE TRIBUNAL RESTRICTED THE SCOPE OF THE ASSESSING OFFICER TO EXAMINE CERTAIN EXPENSES ONLY. INSOFAR AS THE NET COMMISSION RATE OF 1% FOR ESTIMATING THE COMMISSION INCOME IS CONCERNE D THE SAME STOOD FINAL AS PER THE EARLIER ORDER OF THE TRIBUNAL AS REPRODUCED IN THE FOREGOING PARAGRAPHS. 9 . THE ASSESSING OFFICER IN PURSUANCE OF THE AFORESAID OBSERVATIONS FINALLY COMPUTED THE INCOME AT ` 12 28 020 AFTER ANALYZING AND VERIFYING THE VA RIOUS ADMINISTRATIVE EXPENSES DEBITED TO THE PROFIT & LOSS ACCOUNT. AGAINST THE SAID ORDER THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS) WHEREIN A PLEA WAS RAISED FOR THE FIRST TIME THAT MAJOR PART OF THE TURNOVER CONSTIT UTES SALES TO SISTER CONCERN ON WHICH THE ASSESSEE HAS NOT EARNED ANY INCOME AND THEREFORE THE TURNOVER OF THE SISTER CONCERN SHOULD BE EXCLUDED FOR COMPUTING THE COMMISSION INCOME BY APPLYING THE RATE OF 1%. IN SUPPORT OF THIS CONTENTION RELIANCE WAS P LACE D ON THE DECISIONS OF THE TRIBUNAL MUMBAI BENCHES IN MAGANLAL B. JAIN AND PALRECHA AND CO. ITA NO.905/MUM./1981. M/S. SAROJ ANIL STEEL P. LTD. 8 10 . THE LEARNED COMMISSIONER (APPEALS) HELD THAT THE ASSESSING OFFICER HAS ONLY FOLLOWED THE DIRECTIONS OF THE TRIBUNAL AND HAS CONSIDERED THE EXPENDITURE AFTER VERIFYING THE DETAILS AS MANDATED BY THE TRIBUNAL. THESE DISALLOWANCES AS MADE BY THE ASSESSING OFFICER HAVE NOT BEEN SERIOUSLY AGITATED BEFORE HIM AND THE ONLY PLEA TAKEN BEFORE HIM IS THAT THE TURNOVER RELATING TO SISTER CONCERN AMOUNTING TO ` 10 91 00 478 SHOULD BE EXCLUDED FROM THE TOTAL TURNOVER. THE LEARNED COMMISSIONER (APPEALS) OUTRIGHTLY REJECTED THE ASSESSEES CONTENTION AND HELD THAT THIS IS A NEW PLEA RAISED FOR THE FIRST TIME WHICH HAS NEITHER BEEN RAISED AT THE STAGE OF THREE ASSESSMENT PROCEEDINGS OR BEFORE ANY OF THE FIRST APPELLATE AUTHORITIES OR BEFORE THE TRIBUNAL AND TH EREFORE HE REJECTED THE ASSESSEES PLEA ON THIS SCORE AFTER OBSERVING AND HOLDING AS UNDER: 5.3 AS REGARDS THE PLEA OF THE APPELLANT THAT TH E TURNOVER WITH THE SISTER CONCERNS AMOUNTING TO RS.10 91 00 478/ - SHOULD BE EXCLUDED FROM THE TOTAL TURNOVER FOR COMPUTING THE INCOME AT @ % I FIND THAT THIS IS A NEW ISSUE RAISED FOR THE FIRST TIME BEFORE ME IN APPEAL . THIS ISSUE HAS NEITHER BEE N RAIS ED BEFORE THE AO DURING THE THREE ASSESSMENT PROCEEDINGS NOR BEFORE THE CIT(A) TWO TIMES EARLIER AND NOT EVEN BEFORE THE I TAT TWICE. ACCORDINGLY I HOLD THAT THIS IS AN AFTERTHOUGHT AND ALSO I FIND THE PLEA TO BE DEVOID OF ANY MERIT . WHILE RAISING BILLS IN THE NAME OF THE SISTER CONCERN ALSO THERE IS A PROFIT ELEMENT INCORPORATED. IT COULD THEREFORE NOT BE SAID THAT THE APPELLANT HAS NOT EARNED INCOME BY WAY OF COMMISSION IN TURNOVER WITH SISTER CONCERN. ACCORDINGLY I REJECT THE GROUND NOS 1 TO 3 ON TECH NICAL GROUND AS WELL AS ON MERIT. THE GROUNDS NO NO.1 TO 3 ARE THUS DISMISSED. 11 . HOWEVER THE LEARNED COMMISSIONER (APPEALS) GAVE SOME PART RELIEF OF ` 27 790 ON ACCOUNT OF CERTAIN EXPENSES. AGGRIEVED BY THE SAID ORDER THE ASSESSEE IS IN APPEAL BEFORE US . M/S. SAROJ ANIL STEEL P. LTD. 9 12 . THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US SUBMITTED THAT THE TURNOVER RELATING TO SISTER CONCERN SHOULD HAVE BEEN EXCLUDED FROM THE TOTAL TURNOVER FOR COMPUTING THE COMMISSION INCOME @ 1%. THIS IS BECAUSE THE ASSESSEE CANNOT EARN INCOME FROM OWN SISTER CONCERN AND HAS IN FACT NOT EARNED ANY COMMISSION INCOME FROM SISTER / GROUP CONCERN. HE SUBMITTED THAT THE TRIBUNAL IN ANIL GOEL EXIM PVT. LTD. ITA NO.1330/ MUM./2002 ITA NO.2314 & 2315/MUM./2003 VIDE ORDER DATED 25 TH APRIL 2005 HAS NOTED TH IS POINT AND DIRECTED THE ASSESSING OFFICER TO LOOK INTO THIS ISSUE. HE POINTED OUT THE RELEVANT OBSERVATIONS OF THE TRIBUNAL GIVEN IN PAGE 5 AND 6 OF THE SAID WHICH IS REPRODUCED HEREIN BELOW: THE ABOVE POINT IS RAISED BY THE LEARNED COUNSEL. IT IS SUB MITTED THAT CERTAIN INTRA GROUP ACCOMMODATION ENTRIES WERE RAISED PURELY FOR THE PURPOSE OF RAISING BANK FINANCES AND THESE ENTRIES THEREFORE CANNOT BE VIEWED AS SOURCE OF REVENUE BEING GENERATED. 6. AS FAR AS THIS PLEA IS CONCERNED WE ARE OF THE VIEW THAT SINCE MATTER IS REQUIRED TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO IN THE LIGHT OF DIRECTIONS CONTAINED IN TRIBUNALS ORDER DATED 31 ST MARCH 2005 THE ASSESSING OFFICER IS TO BE DIRECTED TO CONSIDER THIS PLEA AS WEL L. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO DEAL WITH THIS CONTENTION IN ACCORDANCE WITH THE LAW AND BY WAY OF A SPEAKING ORDER. 13 . THUS THIS MATTER NEEDS TO BE LOOKED INTO BY THE ASSESSING OFFICER AS THE TRIBUNAL HAS ADMITTED THAT INTRA GROUP ACCOM MODATION ENTRIES MAY NOT BE THE SOURCE OF REVENUE. HE ALSO REFERRED TO VARIOUS AFFIDAVITS FILED BY THE SISTER CONCERN STATING THAT ON THE SALE BILLS ISSUED TO THEM THE ASSESSEE HAS NOT EARNED ANY COMMISSION INCOME NOR THEY HAVE PAID ANY SUCH COMMISSION TO THE ASSESSEE. HE SUBMITTED THAT THESE AFFIDAVITS WERE ALSO FILED BEFORE THE ASSESSING OFFICER. THUS THE SUM M/S. SAROJ ANIL STEEL P. LTD. 10 AND SUBSTANCE OF THE LEARNED COUNSEL IS THAT WHILE ESTIMATING THE INCOME @ 1% AS COMMISSION ON THE TOTAL TURNOVER THE TURNOVER PERTAINING TO SIST ER CONCERN SHOULD BE EXCLUDED AND THIS MATTER CAN BE EXAMINED OR VERIFIED BY THE ASSESSING OFFICER. 14 . THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITTED THAT THE PLEA WHICH HAS BEEN BEING RAISED FOR THE FIRST TIME BEFORE THE LEARNED COMMI SSIONER (APPEALS) IN THIRD ROUND OF PROCEEDINGS CANNOT BE ENTERTAINED NOW FOR THE REASON THAT THE ASSESSMENTS HAVE BEEN PASSED PURELY IN PURSUANCE OF THE DIRECTION GIVEN BY THE TRIBUNAL WHERE IN THE SCOPE OF THE ASSESSMENT WA S VERY LIMITED. THUS HE STRONGL Y RELIED UPON THE OBSERVATIONS AND THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) ON THIS SCORE. 15 . WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AS WELL AS THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALREADY RECORDED T HE CHEQURED HISTORY OF VARIOUS ROUNDS OF PROCEEDINGS IN THE ASSESSEES CASE AND THIS IS THE THIRD ROUND OF PROCEEDINGS WHICH IS IN PURSUANCE OF THE DIRECTION S GIVEN BY THE TRIBUNAL. IN THE FIRST ROUND THE TRIBUNAL HAS SET ASIDE THE MATTER TO THE FILE OF T HE ASSESSING OFFICER ONLY FOR THE PURPOSE OF EXAMINING THE EXPENSES AND INSOFAR AS THE ASSESSMENT OF NET COMMISSION IS CONCERNED THE SAME WAS UPHELD AT 1% OF THE TURNOVER AS DETERMINED BY THE ASSESSING OFFICER I.E. THE TURNOVER OF ` 15 40 95 410 FOR THE ASSESSMENT YEAR 1996 97 WHICH STOOD ALREADY CRYSTALLISED . THERE IS IN FACT ALSO NO DISPUTE THAT THE SALES TO THE SISTER CONCERN ARE ALSO HAWALA TRANSACTION AND NOT ACTUAL SALES. THEREAFTER NO LEGAL REMEDY WAS PURSUED AND THIS INTER ALIA MEANS THAT THE ISSUE OF COMMISSION INCOME OR TOTAL TURNOVER HAS ATTAINED FINALITY. EVEN IN THE SECOND ROUND BEFORE THE TRIBUNAL THIS ISSUE WAS NOT THE SUBJECT MATTER OF AGITATION. NOW IN THE THIRD ROUND OF PROCEEDINGS THE M/S. SAROJ ANIL STEEL P. LTD. 11 ASSESSEE HAS TAKEN A PLEA THAT THE TURNOVER PERTAINING TO I T S SISTER CONCERN S SHOULD BE EXCLUDED FROM THE TOTAL TURNOVER FOR THE PURPOSE OF ESTIMATING THE COMMISSION INCOME. T HERE IS NO OBSERVATION OR FINDING OF THE TRIBUNAL ON THIS SCORE. EVEN IN THE SECOND ROUND OF PROCEEDINGS THE TRIBUNAL HAS SET ASIDE THE ISSUE PURELY FOR EXAMINATION OF EXPENDITURES ONLY. IN THIS ORDER ALSO THERE IS NO WHISPER WITH REGARD TO THE PLEA WHICH HAS BEEN RAISED BY THE ASSESSEE IN THIS ROUND OF PROCEEDINGS. ONCE THE MATER HAS REACHED UPTO THE STAGE OF THE TRIBUNAL AND CATEGORICA L DIRECTIONS HAVE BEEN GIVEN FOR FRAMING THE ASSESSMENT THE ASSESSING OFFICER CANNOT TRAVEL BEYOND THE SCOPE AND AMBIT OF THE DIRECTION S OF THE TRIBUNAL. THE PLEA WHICH HAS BEEN TAKEN BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER (APPEALS) OR MAY BE BEF ORE THE ASSESSING OFFICER CANNOT BE ENTERTAINED IN THE THIRD ROUND OF THE PROCEEDINGS. IF THE ASSESSEE HAD TAKEN SUCH A PLEA BEFORE THE TRIBUNAL IN THE FIRST ROUND OF THE PROCEEDINGS AND THE TRIBUNAL HAS NOT DEALT WITH SUCH AN ISSUE THEN THE ONLY COURSE LEFT WAS TO FILE MISC. APPLICATION OR SEEK LEGAL REMEDY BEFORE THE HIGH COURT. ONCE THERE WAS NO SUCH DIRECTION EITHER IN THE FIRST ROUND OR IN THE SECOND ROUND OF THE PROCEEDINGS THEN SUCH A PLEA CANNOT BE ENTERTAINED N OW AS THE SCOPE OF SET ASIDE PROCEE DINGS BY THE TRIBUNAL IS STRICTLY CIRCUMSCRIBE D BY THE DIRECTIONS OF THE TRIBUNAL. HENCE THE PLACE AND THE GROUND RAISED BY THE ASSESSEE BEFORE US IS NOT MAINTAINABLE AND ARE REJECTED. 16 . NOW COMING TO THE DECISION OF THE TRIBUNAL IN ANIL GOEL EXIM PVT. L TD. (SUP RA) AS RELIED UPON BY THE LEARNED COUNSEL IT IS SEEN THAT THIS DECISION HAS BEEN RENDERED IN THE CASE OF A DIFFERENT ASSESSEE MAY BE IN THE CASE OF A SISTER CONCERN HOWEVER THE SAME HAS NO RELEVANCE O R BEARING IN THE PRESENT CASE AS IN THE CA SE OF ASSESSEE ITSELF THE TRIBUNAL HAS SET ASIDE THE MATTER TWICE BEFORE THE A .O. WITH SPECIFIC DIRECTION S AND THE GROUND RAISED BEFORE US WAS CERTAINLY NOT ONE OF M/S. SAROJ ANIL STEEL P. LTD. 12 THEM. HENCE THE SAID DECISION RELIED UPON BY THE LEARNED COUNSEL IS OF NO ASSISTANCE. IN V IEW OF THESE FACTS THE PLEA RAISED BY THE LEARNED COUNSEL BEFORE US AND ALSO THE GROUND S TAKEN IN THE ALL ASSESSMENT YEAR 1996 97 1997 98 AND 1998 99 WHICH ARE SAME CANNOT BE SUSTAINED. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE FOR ALL THE ASSESSME NT YEAR S I.E. 1996 97 1997 98 AND 1998 99 ARE DISMISSED. 17 . 1996 97 1997 98 AND 1998 99 1 7 . IN THE RESULT ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 1996 97 1997 98 AND 1998 99 ARE DISMISSED. 4 TH APRIL 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 4 TH APRIL 2014 SD/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI DATED : 4 TH APRIL 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT MUMBAI CITY CONCERNED ; ( 5 ) / THE DR ITAT MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI