Tribunal orders 25% income estimation for undisclosed amounts under section 69

The Tribunal partially allowed the Revenue's appeal, directing the Assessing Officer to estimate the appellant's income at 25% for the undisclosed amounts in question. For the first issue, the Tribunal estimated income under section 69 due to lack of proper explanation for the sources of investment. Regarding the second issue, income received from M/s. Jana Chaitanya Housing Ltd. was deemed liable for TDS as mobilization advance, with 25% of the receipt considered as the appellant's income.

---

---

Issues Involved:
1. Addition of Rs. 1,71,766 under section 69 of the Income-tax Act, 1961 for failure to provide a valid explanation for the sources of investment.
2. Addition of Rs. 20,00,000 under section 69A of the Income-tax Act, 1961 for undisclosed income received from M/s. Jana Chaitanya Housing Ltd.

Issue 1:
The first issue revolves around the addition of Rs. 1,71,766 under section 69 of the Income-tax Act, 1961 due to the appellant's failure to furnish a valid explanation for the sources of investment. The appellant received two cheques but did not adequately explain the source of the funds. The CIT(A) deleted the addition based on the explanation that the amount was used for payment to landlords. However, the Tribunal observed that the appellant did not clarify the sources from whom the amount was received and the purpose for which it was received. Consequently, the Tribunal estimated the income at 25% due to the lack of proper explanation, partially allowing the Revenue's ground.

Issue 2:
The second issue involves the addition of Rs. 20,00,000 under section 69A of the Income-tax Act, 1961 for undisclosed income received from M/s. Jana Chaitanya Housing Ltd. The AO noticed the receipt in Form No. 26AS but the appellant did not declare it as trading receipt. The appellant argued that the amount was received as commission for acting as an agent, not for contract works. The CIT(A) accepted the appellant's explanation based on confirmation letters and bank statements. However, the Tribunal disagreed with the CIT(A)'s decision, stating that the amount was liable for TDS as mobilization advance and should be considered income. The Tribunal directed the AO to adopt 25% of the receipt as the appellant's income, partially allowing the Revenue's ground.

In conclusion, the Tribunal partially allowed the Revenue's appeal concerning both issues, directing the AO to estimate the appellant's income at 25% for the undisclosed amounts in question.

---