TaxTMI 
TaxTMI 
2026 (10) TMI 279
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.....12.2019 for the assessment year 2017-18. The assessee has assailed the impugned order on the following grounds of appeal before us: "1. The learned Commissioner of Income-tax (Appeals) order is erroneous in facts and law. 2. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in partly confirming the assessment order passed u/s 144 of the Income-tax Act, 1961, in estimating the income @4% on turnover without properly appreciating the nature of business carried on by the Appellant and the material placed on record. 3. The learned Commissioner of Income-tax (Appeals) erred in estimating the income @4% on turnover without allowing expenditure incurred by the appellant. 4. The learned ....
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....ome forth with the requisite details despite specific directions, thus issued a show-cause notice to the assessee, wherein he was called upon to explain as to why, in the absence of supporting documentary evidence, his claim for deduction under Chapter VI-A of Rs. 2,03,500/- may not be disallowed. However, the assessee failed to furnish any reply to the aforesaid notice. 4. The AO, while framing the assessment, observed that a perusal of the assessee's bank account No.068105500143 for the subject year revealed cash deposits to the tune of Rs. 5,69,58,722/-. As the assessee had failed to come forth with any explanation regarding the source of the aforesaid cash deposits along with supporting documentary evidence, the AO held the entire am....
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....e assessee's own case for the assessment year 2018-19, had not drawn any adverse view. Apart from that, it was observed that in the assessment framed in the case of the assessee's brother, viz. Shri Mutta Yadgiri, PAN: CNNPM348C, dated 24.03.2022 for the same assessment year, i.e., assessment year 2017-18, the claim of commission at the rate of 4% of total receipts was accepted. 7. The CIT(Appeals), on careful examination of the submissions of the assessee, found merit in his claim that the total cash deposits of Rs. 5,69,58,722/- represented his business transactions/turnover, on which his commission income was to be determined at the rate of 4%. Accordingly, the CIT(Appeals), based on his aforesaid observations, reduced the estimation ....
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.... account of Rs. 1,51,27,030/-, which, thus, worked out at 1.87% of the gross receipts/credits in the bank account. 11. The Ld. AR further submitted that in the assessee's own case for the immediately succeeding year, i.e., assessment year 2018-19, the AO had accepted the assessee's claim of commission at the rate of 4% of the total receipts, which included labour cost of loading and unloading charges and other administrative charges to be paid during the year under consideration. It was submitted that thereafter the AO had accepted the net profit of Rs. 3,95,910/- (as disclosed in the profit & loss account), as against the total cash deposits of Rs. 2,24,33,530/- in the same bank account No.068105500143 maintained with ICICI Bank Ltd., t....
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....rder of the CIT(Appeals) be upheld. 14. We have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both parties and perused the material available on record. Admittedly, the AO had initially estimated the assessee's business income at 12% of total receipts of Rs. 5,69,58,722/-. The CIT(Appeals), however, after considering the material placed on record by the assessee, accepted that the assessee was carrying on the business as a commission agent in the Bowenpally Vegetable Market Yard and that the aforesaid receipts represented his business transactions/turnover. The CIT(Appeals), taking note that the assessee was receiving a commission at 4% of the sale proceeds, accordingly restricted....
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....hemselves, be mechanically applied to the year under consideration, they do constitute relevant material for determining whether the income estimate of 4% is reasonable. 17. We also take note of the fact that the CIT(Appeals) himself had accepted the assessee's claim that he was acting as a commission agent and that the total cash deposits represented business transactions/turnover on which commission income was to be determined. Once the nature of the activity is accepted to be that of a commission agent, the estimation of income has to be made having regard to the actual nature of the activity and the material available on record. 18. Considering the totality of the facts and circumstances of the case, and having regard to the incom....