2025 (6) TMI 1042

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e Act" for short) for the Assessment Year (AY) 2013-14. 2. The solitary grievance raised by the assessee in this appeal is as follows:- "In law, facts and circumstances of the Appellant's case, the learned CIT(Appeals) erred in confirming the addition made by the Assessing Officer of Rs. 32,78,055/- considering the same as brokerage income earned but not credited to client and offered to tax when no such addition is called for." 3. The assessee filed its return of income on 11.04.2018 in response to the notice u/s 148 of the Act issued. Uncharged Brokerage :- 4. The facts relating to this issue are that the Assessing Officer observed that the assessee had "not charged any brokerage" from certain clients. The assessee be....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uring the year is added to the total income of the assessee. Penal action u/s 271(1)(c) of the Act are initiated against the assessee for concealment of income for the year under consideration." 5. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who confirmed the addition made by the Assessing Officer, by observing as under:- "7.3 So far as addition of Rs. 32,78,055/- is concerned, the AO has observed that Appellant has not charged any brokerage from certain clients. The Appellant before AO has claimed that there is no manner obligatory to recover such charges from its clients as management has to decide what practice it needs to be followed. This contention of Appellant was not a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....age or not cannot be accepted as Appellant has not brought on record any cogent material or reasoning for not charging such brokerage to certain clients. There is no evidence on record which can suggest that there was no other benefit which was passed on to such entities from whom brokerage is not charged. On the contrary Appellant itself has stated that it has earned brokerage income of Rs. 15,00,000/- in current year which means that it is charging brokerage to few clients and Appellant cannot recognise income as per its own will. As Appellant is following mercantile system of accounting and considering the fact that Appellant is. carrying out a business, it ought to have charged brokerage from clients on whose behalf it has made transact....