NARENDRA KUMAR MADAN,MUMBAI vs. ITO WD 13(2)(1), MUMBAI

Assessee by : None Revenue by : Shri Suman Kumar (DR) Date of hearing : 07.11.2017 Date of Pronouncement : 29.11.2017 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: This appeal by the assessee under section 253 of the Income Tax Act is directed against the order of Ld. Commissioner of Income Tax [ld. CIT(A)] (Appeals)-24, Mumbai dated 25.06.2014 for Assessment Year (AY) 2009-10.

The assessee has raised the following grounds of appeal:

drivers on delivery of goods which are deposited into the bank a/c of your appellant. Customer usually gives the total amount after deduction of TDS thereon which includes transport charges and commission of your appellant hence the total of cash and cheques deposits in bank a/c are high. The total Contract Receipts as per 26AS are Rs.9721818/- and the net amount after TDS (Rs.1 073659) amount to Rs.8648159/- and amount deposited in the accounts by cash & cheques amount to Rs.1766485/- so the question of unexplained cash credit & cheque deposits does not arise and the addition should be deleted b) Unexplained Cheques credit in Bank a/c Rs.200000/- As mentioned above the Learned Income tax officer has also adhoc added Rs. 200000/- out of the cheques deposited of Rs. 633485/- As explained in para 1 above the customer pay not only commission of your appellant but also the transport charges which are in turn paid to the truck owners hence the same are genuine business receipts so the question of unexplained cheques deposits does not arise and the addition of Rs.200000/- should be deleted. c) Enhancement of the Net Commission Rs.284857/- As stated in para '1' above customers usually provides the total amount to the driver on delivery of goods which comprises of Transport charges and commission of your appellant. They deduct the TDS on the total amount paid by the customer. Your appellant has offered for taxation the entire net commission of Rs.10736591- and claimed the TDS as reflected in Form 26AS. As the entire commission has been offered the enhancement of Net commission by Rs.284857/- is unjustified. Further comparative statement of last 2years commission offered is enclosed & marked as Annexure -

1. 1. d). Disallowance of Expenses Rs.25000/- The Learned Income Tax Officer has adhoc disallowed expenses of Rs.25000/- whereas all the expenses debited to the Profit and Loss A/c are exclusively and entirely for the business purposes only.

3. Without prejudice to the above your appellant would like to state that the Learned Commissioner of Income Tax (Appeals - 24) had stated that he would call for Remand Report from the Learned Income Tax Officer hence your appellant did not attend before the Learned Commissioner of Income Tax and waited for the notice. Further your appellant in order to justify the expenses and disallowance made had approached the Learned Income Tax Officer but the Learned income tax officer has not attended your appellant as the Learned income tax officer had not received any instruction from the Learned Commissioner of Income tax Appeals -24.

4. Being aggrieved with the above additions & disallowances made by the learned income Tax Officer & Learned Commissioner of Income Tax (Appeals -24).

2. Brief facts of the case are that the assessee is a Transport Commission agent, filed his return of income for relevant AY on 29.09.2009 declaring total income of Rs. 3,53,981/-. The assessment was completed under section 143(3) on 27.12.2011. The Assessing Officer (AO) while passing the assessment order made the addition on account of unexplained cash credit in bank account of Rs. 7,16,225/-, unexplained cheque credit of Rs. 2,00,000/-, disallowed interest on loan for Truck of Rs. 1,24,885/-, enhanced the income on commission for Rs. 2,84,857/- and disallowed expenses of Rs. 25,000/-. On appeal before the ld. CIT(A), all the addition/disallowance were confirmed. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us.

11,33,000/- in Oriental Bank of Commerce and cheque deposit of Rs. 6,33,485/-. The AO made the addition on the principal of peak credit theory for Rs. 7,16,225/- as cash credit and addition of Rs. 2,00,000/- as cheque credit. The assessee explained before the ld. CIT(A) that assessee is a transporter and also earning commission income. The customers usually hand over the cash or cheques to the truck drivers of goods which are deposited in the bank. Customer usually gives total amount after TDS, which includes transport charges and commission. The ld. CIT(A) concluded that assessee has not furnished detailed and documents. The assessee has shown the TDS of Rs. 342193/- on asset side in the balance-sheet, however the receipt on which these TDS were made do not appear to have been accounted for in view of recourse to the provision of section 44AE and yet nevertheless, the TDS entry on debit is the asset side of the balance-sheet. Thus, the fact clearly established the capital account do not represent the real picture and sustained the addition. Before us, the assessee neither filed any documentary evidence nor explained the fact to substantiate the ground of appeal

. Hence, we do not find any reason to interfere with the finding of ld. CIT(A). In the result, Ground No. 2(a) & 2(b) are dismissed.

6. Ground No. 2(c) & 2(d) relates to enhancement of commission income and disallowance of expenses. The AO enhance the commission income of Rs. 2,84,587/- on the basis of difference claimed by assessee and the details available in Form 26AS. The AO disallowed the adhoc disallowance of expenses of Rs. 25,000/- in absence of any details. The ld. CIT(A) confirmed both the addition holding that no details were provided nor the facts were properly explained. Even before us, the assessee has neither filed any documentary evidence nor explained the fact. Thus, we do not find any illegality or infirmity in the order passed by ld. CIT(A). In the result, the grounds of appeal No. 2(c) & 2(d) are dismissed.