Consistency in recurring commission income disputes justified limiting reassessment addition to 1% of bank transactions.

Reassessment of cash deposits in bank accounts may be confined to estimated commission income where the assessee's role as a commission agent is supported by the record, including tax deduction at source under section 194H. A recurring factual pattern from the immediately preceding assessment year was treated as a relevant factor, and consistency in approach was preferred even though res judicata did not apply as a strict bar. On those facts, the addition was restricted to 1% of gross bank transactions and the balance was deleted, with the Revenue's challenge failing.

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Issues: Whether the addition made in reassessment proceedings could be restricted to 1% of the gross bank transactions and the balance deleted on the basis that the assessee was acting as a commission agent and the view taken in the immediately preceding assessment year required consistency.

Analysis: The assessment year in question involved reassessment of cash deposits in bank accounts and an addition of the entire transaction value. The record showed that in the immediately preceding assessment year, on similar facts, the income had been estimated by applying a 1% profit rate, and the assessee's claim of commission activity was supported by deduction of tax at source under section 194H of the Income-tax Act, 1961. The identical factual pattern and the earlier acceptance of a commission-based approach were treated as material circumstances. The doctrine of res judicata was not applied as a strict bar, but consistency in treatment of a recurring factual issue was held to be appropriate.

Conclusion: The restriction of the addition to 1% and deletion of the balance were upheld. The Revenue's challenge failed.

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