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TMI Blog2023 (1) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... of the wife of the assessee without appreciating that no income of the wife could be added in the hands of the assessee - rate of commission applied by the authority below - HELD THAT:- So far the decision of CIT(A) for applying 5% of the total addition as income of the assessee is backed by binding precedents. CIT DR could not controvert the finding of Ld.CIT(A) by bringing any other binding precedents to our notice. Therefore, the decision of CIT(A) for estimating commission income cannot be faulted. However, under the identical facts, the Co-ordinate Bench of the Tribunal in various decisions, has taken the rate of earning of commission varying from 0.55% to 1.25%. Therefore, looking to the facts of the present case, it would sub-serve the interest of justice if the rate of earning of commission is adopted at the rate prevalent in the same line of business. Therefore, the addition is restricted to 1.25 % of the total amount. Disallowance of expenditure incurred claimed by the assessee on surmises, conjecture and suspicion - assessee submitted that CIT(A) was justified in granting part relief as the expenditure was incurred for business purposes. The entire expenditure shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the following judicial pronouncements relied upon by the appellant: a) 113 ITR 22 (Guj) P.V. Doshi vs. CIT b) 194 ITR 548 (Born) Inventors Industrial Corpn. Vs. CIT c) 281 ITR 366 (All) Abdul Majid vs. CIT d) 21 SOT 440 (Kol) Pearless Ge. Fin. Inv. Co. Ltd. vs. ACIT e) 127 ITD 160 (Chennai) Hemal Knitting Industries vs. JCIT f) ITA No. 2638/2005 (Kar) dated 5.4.2010 CIT v Mis PaiVaibhav Hotels (P) Ltd 2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding the addition of Rs. 4,51,930/- representing 5% of the assessed income of the wife of the appellant without appreciating that no income of the wife could be held to be in the case of appellant. 2.1. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no evidence on record to establish that wife of the appellant was benamidar of the appellant and mere fact that wife was allegedly unable to explain her transactions of her business M/s Akriti Investments, the same could not be a ground to assume that such income is, income of the appellant. 3 That the learned Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecific ground that it had not received any notice and the notice u/s 148 of the Act was served upon its Chartered Accountant and not upon the assessee. He relied upon various case laws to buttress the contention that the impugned assessment was framed without authority of law. 7. Ld. CIT DR opposed these submissions and submitted that as per the records, the assessment was framed under the normal provision i.e. section 143(3) of the Act. Therefore, the objection regarding jurisdiction is misconceived and is not supported by the evidences. 8. We have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. We find that the original assessment was framed u/s 143(3) of the Act when a pointed query regarding objection that no notice u/s 148 of the Act was served upon the assessee, was raised by him. Ld. Counsel for the assessee could not point out to any evidence regarding the assessment being framed u/s 147 of the Act except the contents of the Remand Report filed before Ld.CIT(A). In our considered view, the material placed before us, does not support the claim that the assessment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions are made in it, I do not know anything. 16. When asked about loans given on her behalf of her companies of which she is a Director and what rate of interest and against what security she stated again. I do not know 12.3. He thus held in para 23 as under: 23. In addition to the income assessed in the hand of Sh. Sanjeev Kumar, the income in the name of assessee's wife, Smt. Rekha Gupta, in view of her ascertion about now knowing any thing about the business and evidences of Mr. Sanjeev Kumar Chaudhary controlling the entire business, has assessed in the hands of Mr. Sanjeev Kumar Chaudhary on substantive basis 12.4. In the written submission appellant stated that addition has been made by relying upon the appraisal report and order of assessment in the case of Mrs. Rekha Gupta which have not been confronted. It was also submitted that mere fact that wife was allegedly unable to explain her transaction of her business M/s Akriti Investments, the same could not be a ground to assume and conclude that alleged income of the wife is income of the appellant as has been held in the case of ACIT vs. Peter Thorose reported in 111 ITD page 360 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) for estimating commission income cannot be faulted. However, under the identical facts, the Co-ordinate Bench of the Tribunal in various decisions, has taken the rate of earning of commission varying from 0.55% to 1.25%. Therefore, looking to the facts of the present case, it would sub-serve the interest of justice if the rate of earning of commission is adopted at the rate prevalent in the same line of business. Therefore, the addition is restricted to 1.25 % of the total amount [Rs.90,38,572/-] which is restricted to Rs.1,00,000/-. Thus, Ground Nos.2, 2.1 3 raised by the assessee are partly allowed. 13. Apropos to Ground No.4 raised by the assessee is against the upholding of disallowance of Rs.77,607/- out of expenditure incurred claimed by the assessee on surmises, conjecture and suspicion. 14. Ld. Counsel for the assessee submitted that Ld.CIT(A) was justified in granting part relief as the expenditure was incurred for business purposes. The entire expenditure should have been allowed by Ld.CIT(A). 15. Ld.CIT DR opposed these submissions and supported the assessment order. 16. We have heard Ld. Authorized Representatives of the parties and perused the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits even though the assessee has not provided plausible explanations with the necessary documentary evidences. 2. In the facts and circumstances of the case, the Ld. CIT(A) grossly erred in restricting the addition made by the AO on account of disallowance of expenses to 20% instead of 40% made by the AO. 3. In the facts and circumstances of the case, the Ld. CIT(A) grossly erred in restricting the addition made by the AO on account of 'sundry creditors' and 'other creditors' to only 5% of such creditors even though assessee failed to provide plausible explanation with necessary documentary evidence. 4. In the facts and circumstances of the case, the Ld. CIT(A) grossly erred in deleting the addition made by AO on account of unexplained cash. 5. In the facts and circumstances of the case, the Ld. CIT(A) grossly erred in deleting the addition made by AO on account of fixed assets as the assessee has not produced bills in respect of addition to fixed assets. 6. In the facts and circumstances of the case, the Ld. CIT(A) grossly erred in restricting the addition made by AO on account of undisclosed deposits of Rs.2 lacs to only 5% of t ..... 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