1994 (2) TMI 121 - AT - Income Tax

Addition To Income Assessing Officer Assessment Year Earning Income Real Estate Business Travelling Expenses

Summary

Issues Involved:
1. Addition of Rs. 45,000 as net income from brokerage in the hands of the assessee.
2. Admissibility and credibility of additional evidence (affidavit of Shri B. Janardhan).

Detailed Analysis:

1. Addition of Rs. 45,000 as Net Income from Brokerage:
The primary issue in this appeal is the addition of Rs. 45,000 as net income from brokerage in the hands of the assessee. The assessee derived income from his profession as a Practitioner in Homeo medicines and Acupuncture Therapy, and also engaged in real estate business without maintaining regular books of account. The Income-tax Officer examined the assessee and Shri B. Janardhan, establishing that the assessee was involved in a tripartite agreement concerning the sale of land owned by Shri S. Metturam Reddy and his sons. The land was subject to various legal suits and a compromise decree dated 24-4-1982, which required the sale of specific portions of the land at revised rates.

The revenue's case was that the assessee acted as a mediator in the sale transaction and was entitled to Rs. 12.50 per sq.yd. from M/s. Radhasoami Co-operative Housing Society. On 17-9-1981, the assessee received Rs. 1,00,000, out of which he refunded Rs. 32,000. The remaining amount was detailed in documents marked G-1 and G-9, which were in the assessee's handwriting. The Income-tax Officer included Rs. 45,000 as part of the assessee's income, resulting in a total income of Rs. 69,460 against the returned income of Rs. 23,490.

The Commissioner (Appeals) upheld the addition, noting that the assessee's involvement in the land deal was admitted, and the application of Rs. 1 lakh was authenticated by the assessee. The Commissioner (Appeals) found that the assessee received Rs. 68,000 by way of commission, spent Rs. 18,000 on travelling, and had estimated other expenses of Rs. 5,000, leaving Rs. 45,000 as net income from brokerage.

2. Admissibility and Credibility of Additional Evidence:
The assessee sought to admit an affidavit of Shri B. Janardhan dated 30-6-1987 as additional evidence, claiming that Rs. 45,000 was taken by Shri B. Janardhan towards court expenses. The Commissioner (Appeals) refused to admit the affidavit, finding it contrary to earlier statements and evidence. The Tribunal admitted the affidavit but questioned its credibility, noting that Shri B. Janardhan did not mention the court expenses in his earlier deposition on 6-2-1985. The Tribunal referred to the decision in Sri Krishna v. CIT [1983] 142 ITR 618, emphasizing that belated assertions supported by affidavits from interested parties carry little weight.

The Tribunal found that the assessee's statements during examination did not support the claim of court expenses. The answers given by the assessee indicated receipt of commission and involvement in the land deal. The Tribunal concluded that the assessee failed to satisfactorily explain the disbursement of Rs. 1 lakh, supporting the lower authorities' decision to include Rs. 45,000 as commission income.

Conclusion:
The Tribunal dismissed the appeal, affirming the addition of Rs. 45,000 as net income from brokerage. The Tribunal found no merit in the assessee's arguments and upheld the findings of the lower authorities, concluding that the assessee received commission and failed to account for the entire amount received.