SURESH,THANJAVUR vs. COMMISSIONER OF INCOMETAX (APPEALS), DELHI

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ITA 1524/CHNY/2024Status: DisposedITAT Chennai30 October 2024AY 2013-20145 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the orders of the lower authorities, confirming the addition of income estimated at 8% of the cash deposited. The assessee failed to provide documentary evidence to support their claim of earning only 5% commission.

What were the facts?

The assessee deposited a large sum of cash in his savings bank account without filing a return of income. Upon reopening the assessment, the assessee declared income at 5% of the cash deposit as commission, but the AO estimated it at 8% due to lack of substantiation.

What were the issues?

Whether the estimation of income at 8% by the AO was justified when the assessee could not substantiate their claimed commission income of 5%.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, A BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI JAGADISH

For Respondent: Shri V. Karthick Krishnan, C.A, Ms. Babita, JCIT
Hearing: 09.10.2024Pronounced: 30.10.2024

आदेश / O R D E R

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2013-14 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 09.05.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 147 r.w.s 144B of the Income-tax Act,1961 (hereinafter “the Act”) on 28.03.2022.

ITA No.1524/Chny/2024 :- 2 -:

2.

The effective ground of appeal in this appeal of assessee is against confirming the addition of Rs. 13,04,454/- by estimating income @8% of cash deposited in the saving bank account.

1.

3. The assessee has deposited cash of Rs 1,99,62,640/- in his saving bank account but has not filed return of income. The Department accordingly reopened the assessment by issuing notice u/s. 148 of the Act. The assessee in response to notice u/s. 148 of the Act has filed the return of income declaring total income of Rs.4,49,163/- by estimating 5% of the cash deposit as commission income. The A.O estimated the income @ 8% as the assessee could not produce any documents, agreement etc., in support of his contentions that he has earned commission only @ 5%. The Ld. CIT(A) has confirmed the addition.

3.

The Ld. Authorized Representative (A.R) of the assessee before us has submitted that the assessee was Branch Manager and working for the company CISB Facility Services Pvt. Ltd. involved in providing security services across India and responsible for maintenance of the Thanjavur activities of security services for manpower, maintenance of attendance of the manpower and settlement of salary etc. The Ld. AR

4.

The Ld. Departmental Representative (DR), on the other hand, supported the orders of authorities below and argued that the assessee has not submitted any documentary evidence in support of his contention and therefore A.O was justified to estimate income @8% as provided in section 44AD.

5.

We have heard the rival submissions, and perused the materials available on record. The case was reopened as the assessee has deposited cash to the tune of Rs. 1,90,62,240/- in his saving bank account with Axis Bank but has not filled his return of income. In response to notice issued u/s. 148 of the Act, the assessee has filed return of income of Rs. 4,49,163/-. The A.O estimated income @ 8% of amount deposited in the bank account as the assessee has not been able to substantiate the basis of income @5% filed in the return of income. The Ld. AR during assessment proceedings has stated that he only earns 5% commission income, however has not been able to substantiate the same and therefore, taking help of the provisions of :- 4 -:

Section 44AD of the Act, the Ld. A.O estimated the income @ 8% of the total receipt of Rs. 2,00,46,640/-. The Ld. CIT(A) has confirmed the addition as the assessee has not been able to substantiate his case. We do not find any infirmity in the order of Ld. CIT(A) and the AO as the assessee has not been able to substantiate the income shown in the return of income by documentary evidences. The assessee before us has also not submitted any documentary evidence in support of his contention of 5% commission. We accordingly uphold the order of Ld CIT(A) and confirm the addition made by the A.O.

6.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced on 30th October, 2024.

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