2024 (10) TMI 1617 - AT - Income Tax

Addition of commission income @ 1.00 % of total transaction / credit in the bank account of assessee - assessee vehemently argued that in case of assessee s group concerned, the Revenue has assessed commission income @ nine paisa or ten paisa per rupees hundred. However, in case of assessee, the Revenue has followed similar income assessed @ 1.00 % per hundred rupees - HELD THAT - Assessee relied on the decision of Sanjay R Shah 2016 (11) TMI 1233 - ITAT AHMEDABAD and Rohit P Panwala 2011 (5) TMI 1146 - ITAT AHMEDABAD wherein similar income was assessed @ ten paisa or twelve paisa per rupees hundred. Thus, if the commission income is considered @.50 paisa per rupees hundred is sufficient and reasonable as no straight jacket formula can be applied of such income. Thus, ground No.1 is partly allowed.

Summary

Issues:
1. Addition of commission income at 1.00% by the Assessing Officer.
2. Addition of Rs. 1.20 lakh under section 69 of the Act.

Analysis:

Issue 1: Addition of Commission Income
The appeal was against the order of the National Faceless Appeal Centre, Delhi, for the assessment year 2013-14, based on the assessment order passed by the Assessing Officer under section 147 r.w.s. 144B of the Income Tax Act, 1961. The assessee, engaged in the business of cheque discounting and money transfer, had his case reopened due to a survey action in the case of M/s Hari Corporation. The Assessing Officer made an addition of commission income at 1.00% of total transactions/credit received in the assessee's bank account. The commission earned varied from 0.15% to 0.20% per Rs. 100, depending on various factors. The Ld. CIT(A) upheld the Assessing Officer's action. The assessee argued that the commission income was already shown in the return of income and that the Assessing Officer had assessed similar income at a much lower rate for other related entities. The tribunal considered the facts and circumstances and decided that assessing the commission income at 0.50 paisa per rupees hundred was reasonable, partially allowing the appeal.

Issue 2: Addition of Rs. 1.20 Lakh under Section 69
The Assessing Officer also made an addition of Rs. 1.20 lakh under section 69 of the Act, alleging that the amount was given to M/s Hari Corporation from the assessee's bank account for business purposes. The Ld. CIT(A) confirmed this addition. The assessee contended that the amount was duly shown in the balance sheet and no further addition was warranted. However, since no specific ground of appeal was raised by the assessee regarding this addition, and no application for additional grounds of appeal was filed, the tribunal rejected the submissions of the assessee against this addition.

In conclusion, the tribunal partly allowed the appeal of the assessee, considering the reasonable rate of commission income and the lack of specific grounds raised against the addition under section 69 of the Act.