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2019 (4) TMI 1936 - HC - Income TaxUnexplained cash credits u/s. 68 - AO adopted the rate of commission of 2% on the total turnover, which order the CIT (A) confirmed - Tribunal reduced the rate of commission to 0.15% - HELD THAT - The entire issue is based on facts. The estimation of the rate of commission of the Assessee would always be subject matter of some guesswork. No precise formula could be applied. Tribunal having taken into consideration the relevant factors, has arrived at a certain percentage of commission that any such kind of activities could be expected to be derived from. This does not give rise to any substantial question of law. Revenue also disputes the expenditure allowed by the Tribunal on such activities. Here also, for the same reasons cited above, in our opinion, no question of law arises.
Issues:
Challenge to Judgment of Income Tax Appellate Tribunal regarding addition of unexplained cash credits under section 68 of the Act. Analysis: The High Court of BOMBAY dismissed the Revenue's Appeal challenging the Tribunal's Judgment on the addition of unexplained cash credits. The primary issue was whether the Tribunal erred in restricting the addition to 0.15% without proper explanation from the assessee. The Court referred to a similar case involving another assessee with a sister concern, where the Tribunal reduced the rate of commission to 0.15%. The Court emphasized that the estimation of commission involves guesswork and is based on facts. They concluded that the Tribunal's decision was reasonable and did not give rise to any substantial question of law. The Court also upheld the expenditure allowed by the Tribunal, stating that no question of law arose in this regard. In the present case, the Assessing Officer had added the entire sum without limiting it to the commission charged. However, the CIT (A) applied the percentage of commission, leading to the deletion of the rest of the additions. Despite the difference in approach compared to the previous case, the Court found no grounds to interfere with the Tribunal's decision. Ultimately, the Income Tax Appeal was dismissed by the High Court of BOMBAY.
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