2019 (3) TMI 2061 - AT - Income Tax

Computation of commission income - CIT(A) held that the assessee has not provided any evidence in support of his claim that the commission estimated at 2% of the deposits made is excessive - HELD THAT - The assessee has relied on the order of this Bench in the case of Jaswant Singh 2018 (9) TMI 965 - ITAT KOLKATA , thus keeping in view the precedents (supra), and the facts and circumstances of the case we direct the Assessing Officer to estimate the income at 0.5% of the deposits as in our view, this would meet the ends of justice - Appeal of the assessee is allowed in part.

Summary

Issues involved:
Assessment of commission income based on bank account activities, adequacy of evidence provided by the assessee, comparison of commission rates in similar cases, applicability of precedent in determining commission income.

Analysis:

1. Assessment of Commission Income:
The Assessing Officer estimated the assessee's income from accommodation entries at 2% of the deposits made into his bank account. The Commissioner of Income Tax (Appeals) upheld this estimation, stating that the assessee failed to provide supporting evidence to challenge the 2% commission rate. The appellate tribunal considered the facts and circumstances, along with the precedent set in a similar case, and directed the Assessing Officer to estimate the income at 0.5% of the deposits, allowing the appeal in part.

2. Adequacy of Evidence Provided:
The Commissioner of Income Tax (Appeals) noted that the assessee did not produce any material during the appeal to refute the Assessing Officer's findings. Despite the assessee's claim that the estimation was excessive, the lack of evidence to support this assertion led to the confirmation of the initial assessment. The tribunal emphasized the importance of providing substantial evidence to challenge income estimations.

3. Comparison of Commission Rates:
The assessee relied on a precedent set by the Kolkata 'A' Bench of the Tribunal in a different case, where a commission rate of 0.1% was considered appropriate. The tribunal, after considering this precedent and the facts of the present case, decided to set the commission income at 0.5% of the deposits, deviating from the initial 2% estimation by the Assessing Officer and the Commissioner of Income Tax (Appeals).

4. Applicability of Precedent:
The tribunal's decision to adjust the commission rate based on a precedent set by the same Bench in a previous case showcases the importance of consistency and the application of established legal principles in determining income assessments. By referring to the precedent, the tribunal ensured fairness and uniformity in its judgment, ultimately allowing the appeal in part and providing relief to the assessee.

In conclusion, the appellate tribunal's judgment addressed the issues surrounding the estimation of commission income, the necessity of providing adequate evidence, the relevance of comparing commission rates in similar cases, and the significance of applying precedents to ensure consistency and fairness in income assessments.