2026 (2) TMI 258

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....vely there are two grievances of the Revenue. Ground no.1- mandatory requirements of Rule 46A(3) of the Rules not complied and an opportunity to the Assessing Officer has not been granted to examine and rebut the evidence. Ground no.2- Ld. CIT(A) erred in deleting the addition of Rs. 2,67,22,210/- made u/s 69B of the Act. 3. Brief facts of the case are that the assessee is an individual and income of Rs. 80,74,800/- declared in the return filed for A.Y. 2018-19 on 21.09.2018 and the same was subsequently revised on 15.10.2018 and 01.02.2019. Case selected for complete scrutiny to examine (i) source of loans/advances and (ii) income from other sources. The assessee is in the business of wholesale trading of yarn and general commission age....

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....The Rajratna Mills (P) Limited. * Sales made by the assessee as a depot agent are recorded in the books of the principal companies, not in the assessee's own books. The assessee s books only reflect commission income and late payment interest charged to debtors for whom he acted as an agent. * The accounting treatment and revenue recognition principles followed by the assessee align with standard practices for agency relationships, where only commission and interest income are recognized in the agent's accounts, while the principal records the underlying sales and corresponding debtors. * The Assessing Officer's addition of Rs. 2,67,22,210/- as unexplained loans and advances appears to be based on the ....

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....s grounds on the above issues are allowable, and the additions made by the Assessing Officer is deleted." 5. Aggrieved Revenue is in now in appeal before this Tribunal. 6. Ld. DR submitted that the additional evidences have been filed by the assessee for which no remand report has been called by Ld. CIT(A)/NFAC. Ld. DR also challenged the finding of Ld. CIT(A)/NFAC deleting the impugned addition for which reference was made to the observation of the Assessing Officer. 7. On the other hand, Ld. AR for the assessee submitted that the assessee along-with carrying on business of trading in yarn, also works as a commission agent. He submitted that the assessee stands as a guarantor for the payment of debtors for the other parties sellin....

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....loans and advance based on the interest income of Rs. 26,72,221/- declared in the audited financial statements and duly offered to tax. Only because there were no loans and advances appearing in the balance sheet, Ld. Assessing Officer has applied 10% interest rate and assumed that the assessee had given loans and advances to the tune of Rs. 2,67,22,210/- and the same are not recorded in the books. We have gone through the audited financial statement of the assessee of current year and preceding year and also the debtor's ledger and note that the interest income of Rs. 26,72,221/- is basically in the nature of commission income, which the assessee earns for securing the payments of debtors of various other parties. To understand for example....