TaxTMI 
TaxTMI 
2026 (10) TMI 597
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....or 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 confirming the action of the assessing officer in levying penalty an amount of Rs. 1,50,000/- without considering the facts of the case. Therefore, the order passed by the lower authorities is ex-facie, illegal and arbitrary. 3. The learned CIT(A) failed to appreciate that the appellant was engaged only in commission agency business, and the actual income earned was commission income, which did not attract the provisions of Section 44AB of the A....
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....Rs. 74,59,261/-, after making certain additions/disallowances, viz., (i) addition under section 69 of the Act: Rs. 68,35,046/-; and (ii) disallowance of the assessee's claim for deduction under Chapter VI-A of the Act: Rs. 2,03,500/-. 4. The AO, while framing the assessment, observed that there were total bank deposits of Rs. 5,69,58,722/- during the subject year, which were inferred by him as the turnover of the assessee. The said turnover exceeded the threshold limit of Rs. 1 crore as contemplated under section 44AB of the Act, thereby rendering the assessee liable to have his accounts audited by an accountant and to furnish the audit report to the Income Tax Department before the specified due date. The AO observed that the assessee h....
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.... availing the services of a consultant, wherein he had declared his turnover and arrived at a profit of Rs. 6,24,215/-. The assessee had stated that he had been engaged in and carrying on commission business for the past several years at the Bowenpally Vegetable Market Yard, Shop No. B-21/1, wherein he would earn commission income as per the rates fixed by the Market Committee from time to time. The assessee further stated that as he was only in receipt of commission income of Rs. 6,24,215/-, which was not liable for tax audit for the subject year, therefore, he had not got his books of account audited under section 44AB of the Act. Accordingly, the assessee submitted that the penalty proceedings initiated against him under section 271B of ....
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....CIT(Appeals), has carried the matter in appeal before us. 11. We have heard the learned authorized representatives of both parties, perused the orders of the authorities below and the material available on record. 12. Shri T. Chaitanya Kumar, Advocate, learned Authorized Representative (for short, 'Ld. AR') for the assessee appellant, at the threshold of hearing of the appeal, submitted that the AO had grossly erred in law and facts of the case in imposing a penalty of Rs. 1,50,000/- on the assessee under Section 271B of the Act. Elaborating on his contention, the Ld. AR submitted that as the assessee was a commission agent, i.e., a kachha arhtia, who during the subject year had received commission on the volume of his turnover record....
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....arty; his remuneration consists solely of commission; he has no interest in the profits or losses of his constituent; he has no dominion over the goods; he has no personal interest in the transaction other than his commission and certain out-of-pocket expenses; and, in the event of loss, he is entitled to be indemnified by his principal. 14. Per Contra, Shri K Prasad, Learned Senior Departmental Representative (for short, "Ld. Sr-DR"), on the other hand, relied upon the observations of the AO and submitted that the assessee had substantial transactions running into about Rs. 5.69 crore through his bank account and, therefore, his claim that he is merely a kachha arhtia requires proper verification. 15. Be that as it may, we find that ....
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....aid observations of the AO lend substantial support to the claim of the assessee that he was acting as a kachha arhtia, still, in the absence of any irrefutable documentary evidence conclusively establishing his status as a kachha arhtia, say, copy of license, market committee receipts etc., the matter requires further verification. Therefore, considering the substantial volume of the transactions and the absence of any conclusive documentary evidence evidencing that the assessee was merely acting as a kachha arhtia and was not undertaking any purchase or sale on his own account, we are of the view that the matter requires to be set aside to the file of the AO for carrying out the necessary verification. 18. We thus are of the considered....