2013 (3) TMI 708 - AT - Income Tax

Summary

Issues Involved:
1. Taxation of commission earned on hawala entries.
2. Taxation of unaccounted sales.
3. Addition on account of cash credit u/s 68.
4. Deletion of addition on account of unexplained cash credit.
5. Deletion of addition on account of cash withdrawals by family members.
6. Disallowance of interest on car loan and telephone expenses.
7. Taxation of commission income.
8. Addition of cash credit u/s 68.

Summary:

I.T.A. No.2978/M/2007 (AY:1999-2000)

1. Taxation of Commission Earned on Hawala Entries:
The assessee contested the rate of commission taxed by the AO at 4% on Rs. 10,39,48,162/- instead of the claimed 1.25%. The Tribunal directed the AO to adopt a net commission rate of 3.02% after considering hidden expenses, reducing the taxable income accordingly.

2. Taxation of Unaccounted Sales:
The Tribunal set aside the issue to the AO for fresh examination after admitting additional evidence, as the CIT (A) had previously rejected the evidence due to procedural lapses.

3. Addition on Account of Cash Credit u/s 68:
Similar to the unaccounted sales, this issue was also set aside to the AO for fresh examination after admitting additional evidence regarding loans from Minalshree Chemicals Private Limited.

I.T.A. No.2427/M/2007 (AY: 1999-2000) (By Revenue)

4. Deletion of Addition on Account of Unexplained Cash Credit:
The CIT (A) deleted the addition of Rs. 15,32,800/- as the origin of cash was explained by the assessee. The Tribunal upheld this decision, confirming that the provisions of section 68 were not applicable.

5. Deletion of Addition on Account of Cash Withdrawals by Family Members:
The CIT (A) deleted the addition of Rs. 13,57,427/- as the source of cash withdrawals was explained. The Tribunal upheld this decision, confirming that the provisions of section 68 were not applicable.

I.T.A. No.1947/M/2007 (AY:2000-2001) (By Assessee)

6. Disallowance of Interest on Car Loan and Telephone Expenses:
The assessee did not press these grounds, and they were dismissed as not pressed.

7. Taxation of Commission Income:
The Tribunal applied the same reasoning as in the AY 1999-2000, directing the AO to adopt a net commission rate of 3.02% for AY 2000-2001.

8. Addition of Cash Credit u/s 68:
The Tribunal set aside the issue to the AO for fresh examination after admitting additional evidence regarding loans from Minalshree Chemicals Private Limited.

Conclusion:
The appeals were partly allowed for statistical purposes, with directions for fresh examination of certain issues by the AO after admitting additional evidence. The Tribunal provided specific instructions on the commission rate to be applied for the relevant assessment years.