SANJEEV KUMAR MITTAL,SIRGANGANAGAR vs. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2, LUDHIANA, LUDHIANA

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ITA 549/CHANDI/2023Status: DisposedITAT Chandigarh21 April 2025AY 2019-2020Bench: SHRI RAJPAL YADAV (Vice President), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal directed the AO to estimate commission income at 3% of total receipts, similar to previous years where similar appeals were dismissed. The assessee's appeal was partly allowed, and the Revenue's appeal was dismissed.

What were the facts?

During a search, incriminating documents regarding cash transactions were seized from the assessee. The assessee acted as a broker for arranging finance, receiving commission. The AO added the entire cash paid amount, while the CIT(A) restricted it to peak credit.

What were the issues?

Whether the addition on account of cash transactions should be restricted to peak credit, and if commission income should be estimated at 3% of total receipts.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153A,Section 69A,Section 292C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

Heard together (2 matters)

ITA No.549/CHANDI/2023
ITA No.550/CHANDI/2023

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid cross-appeals for Assessment Year (AY) 2019-20 arises out of an order of learned Commissioner of Income Tax (Appeals)-5, Ludhiana [CIT(A)] dated 02-06-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 153A of the Act on 29-09-2021. In the assessment order, Ld. AO made addition of Rs.317.63 Lacs which form the subject matter of cross- appeals. Having heard rival submissions and upon perusal of case records, the appeals are disposed-off as under. The registry has noted delay of 35 days in assessee’s appeal which stand condoned.

2.

Pursuant to search action on assessee group on 26-02-2020, notice u/s 153A was issued to the assessee. The assessee declared income of Rs.6.95 Lacs. During search, certain incriminating documents pertaining to cash transaction was seized from the premises of the assessee. The assessee could not satisfactorily explain the same. It appeared that the assessee arranged finance for some parties and acted as broker against commission of 1% to 2%. This document revealed that the cash was received for Rs.228.76 Lacs whereas cash was paid for Rs.317.63 Lacs. The Ld. AO added entire amount of Rs.317.63 Lacs u/s 69A. The Ld. CIT(A), considering the presumption of Sec.292C, observed that there was regular receipt and payment in cash. Therefore, the addition was to be made on the basis of peak credit. The same worked out to be Rs.95.92 Lacs and accordingly, the impugned addition was restricted to that extent. The same has led to cross-appeals before us.

3.

From the facts, it clearly emerges that certain incriminating document has been found from the premises of the assessee which details receipts and payments in cash. Apparently, the assessee has acted as broker for arranging finance against commission. The Ld. AR placed on record copy of order of Tribunal in assessee’s own case for AYs 2016-17 & 2017-18, & 490/Chd/2023 dated 15-01- 2025. In these years, Ld. CIT(A) estimated commission income of 3% of total receipts. The revenue preferred further appeals which stood dismissed by the Tribunal. This being the case, we direct Ld. AO to make similar estimation of commission income of 3% of total receipts in this year. No other ground has been urged in assessee’s appeal. 4. stand dismissed. ITA No.549/Chandi/23 stand partly allowed. Order pronounced on 21-04-2025.

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