SUNDARAM LOGANATHAN,KARUR vs. INCOME TAX OFFICER, WARD 1, KARUR, KARUR

आदेश / O R D E R

PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 22.12.2025 for Assessment Year (AY) 2019-20.

ITA No1625/Chny/2026 Sundaram Loganathan :- 2 -: the assessee has received certain amount as commission on investment which was not disclosed in the return of income. Accordingly, the AO reopened the assessment by issue of notice u/s. 148 of the Act. The assessee submitted before the A.O that he has made an investment of Rs.1,56,000/- in M/s. Dream Makers Global Company and that he has received a sum of Rs.87,642/- as commission during the year under consideration which has been duly disclosed in the return of income. The assessee further submitted that Mr. Selvaraj Satish Kumar, Managing Direction of M/s. Dream Makers Global Company had not returned the investment and has misled many poor people. The AO noticed from the findings made by the Investigation Unit where in the sworn statement recorded Mr. Selvaraj Satish Kumar admitted that payouts were made to various people who made investments. The A.O further noticed that a list of payouts in a pen drive was seized during the search operation conducted at M/s. Dream Makers Global Company and that assessee's name is stated in Sr. No.201 where it is stated that a sum of Rs.7,13,196/- was paid to the assessee. The assessee denied receipt of the amount as mentioned in the pen drive and submitted that he has received commission only to the tune of Rs.87,462/- which is substantiated by the bank statements furnished during assessment proceedings. The A.O however did not accept the submissions and proceeded to treat the difference amount of Rs.6,25,554/- to be the income of the assessee u/s. 69A of the Act. Aggrieved, the assessee filed further appeal before the CIT(A). The CIT(A) confirmed the addition by holding that: “6.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under: - The AO noted that the lists provided during the search shows that he has received pay out of Rs.7,13,196/-. The assessee had offered only Rs. 87,642/- in the return. Hence, the assessee’s submissions cannot be

ITA No1625/Chny/2026 Sundaram Loganathan :- 3 -: considered and the difference amount of Rs.7,13,196- Rs. 87,642/- = Rs. 6,25,554/- is deemed to be the income of the assessee u/s 69A of the Income-tax Act,1961 for the Financial year 2018-19 relevant to the Assessment year 2019-20 and added to the total income of the assessee. The appellant stated that the Assessing Officer erred in making the addition of Rs. 6,25,554/- in spite of the fact that the AO himself admitted that on going through the bank statements it was found that he has received only Rs. 87,642/- as commission. The facts of the case are considered. The AO made addition because as per the incriminating material and statement recorded during the search, the assessee received commission of Rs. 7,13,196/-. The assessee has not disclosed the remaining amount of commission in the return of Income. The difference amount of Rs. 7,13,196/- less Rs. 87,642/- = Rs. 6,25,554/- is deemed to be the income of the assessee u/s 69A of the Income-tax Act. The assessee is relying on the bank statement but the assessee has not denied that the remaining amount of commission might have been received in cash or in any other manner. Considering the admission by payer, the claim of the assessee that such high return of Rs. 7,13,196/- will be paid on investment of Rs. 1,56,000/- is not found to be acceptable. It is undisputed fact that the amount of commission as per seized material is Rs. 7,13,196/-. The payer has confirmed the payment but the receiver is denying having received the amount. The denial is not based on any confirmation of the payer. The addition made by the AO is based on the evidence in the form of incriminating material and statement recorded during the search. To rebut the same, the assessee was required to bring evidence on record that the incriminating material is not correct and the claim made by the payer is not correct and that the statement made during the search is not reliable. However, the assessee failed to bring any evidence on record. In the absence of any evidence the evidence brought on record by the AO remains without any rebuttal. The addition made by the AO is therefore found to be justified and confirmed. The ground no. 3 to 5 are treated as dismissed.”

The assessee is in appeal before the Tribunal against the order of the CIT(A).

ITA No1625/Chny/2026 Sundaram Loganathan :- 4 -: of Rs.7,13,196/- as commission. The AO did not accept the submissions of the assessee that he has received only Rs. 87,642/- as commission which is declared in the return of income. The assessee in support of such claim submitted the bank statements. The A.O however did not accept the submissions and treated the difference amount as addition u/s. 69A of the Act. From the perusal of the findings of the A.O, we noticed that the AO had made the addition merely based on the details contained in the pen drive and has not brought any other corroborative material on record in support of the claim that the assessee has received the excess commission. From the above extracted findings of the CIT(A), we notice that the CIT(A) though admits the fact that the assessee has submitted bank statements in support of the actual amount of commission received by him, but has proceeded to confirm the addition made by the A.O stating that the assessee might have received the difference amount in cash or any other manner. It is relevant to mention here that the CIT(A) also has not brought any other material on record except what is found in the third party search. Therefore, we see merit in the arguments of the Ld. AR that the entire addition is made based on mere conjecture and surmise and not evidenced by any material. It is also noticed that the CIT(A) has recorded that the assessee failed to bring any evidence on record to show that he has not received the excess commission. In our considered view such a finding is not correct as the assessee would not be able to prove a negative factor that he has not received the alleged excess commission received by him. Even during the course of hearing before us, the Revenue did not bring anything on record to substantiate the contention that the assessee has indeed received the commission in excess of what is already declared in the return of income. In view of this discussion, we are of the considered view that the addition based on mere suspicion that the assessee ought to have received the commission as stated in the material seized in a third party search without any

ITA No1625/Chny/2026 Sundaram Loganathan :- 5 -: corroborative evidence in support of such claim cannot be sustained. Accordingly, we direct the AO to delete the addition made in this regard.

Order pronounced on 04th day of August, 2026 at Chennai.

Sd/ Sd/ (जॉज� जॉज� के) (पदमावती यस) (Padmavathy.S) (George George K) उपा�� / Vice President लेखा लेखा सद�य लेखा लेखा सद�य सद�य /Accountant Member सद�य चे�नई/Chennai, �दनांक/Dated: 04th August, 2026. EDN, Sr. P.S EJTADA Digitally signed by EJTADA DURGA आदेश क� �ितिल�प अ�े�षत/Copy to: DURGA NARESH 1. अपीलाथ�/Appellant Date: 2026.08.07 NARESH 17:58:19 +05'30' 2. ��थ�/Respondent 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF