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2021 (2) TMI 742 - AT - Income TaxAddition u/s 68 - credits in the form of NSC commission - On perusal of the reply of the Manager SBM, Holenarasipura Branch, the AO found that some of the credit entries had a description “NSC commission received from Post Master, Holenarasipura” - HELD THAT:- Impugned addition can be examined within the parameters of section 69A of the Act as that would be the proper provision of law applicable in the present case. As rightly contended by the learned DR, the Hon’ble Karnataka High Court in FIDELITY BUSINESS SERVICES INDIA (P.) LTD. [2018 (7) TMI 1738 - KARNATAKA HIGH COURT] has not chosen to follow the ratio laid down by the Hon’ble Allahabad High Court in the case of Smt. Sarika Jain[2017 (7) TMI 870 - ALLAHABAD HIGH COURT] and has upheld powers of Tribunal in an appeal as encompassing very wide range. On merits on the addition made by the AO addition to the extent which is a credit appearing in the bank account as on 01.03.2010 cannot be sustained as the same is an amount transferred from SBM, Doddaballapur Branch. Credit to this extent stands explained and addition to this extent is directed to be deleted. As far as addition being an entry appearing in the bank account on 23.03.2010 being the amount received from C. D. Padmanabha, the issue has to be examined afresh by the AO and the assessee has to explain the nature of this credit. Similarly, addition of ₹ 1,51,738/- being the credit appearing in the bank account as on 03.04.2010 is a credit appearing in the books of accounts of the assessee of the previous year relevant to Assessment Year 2010-11 and therefore this addition cannot also be sustained and the same is also directed to be deleted. With regard to other credits, the issue is remanded to the AO for considering afresh as the CIT(A) has not adjudicated the issue and the issue requires verification at the AO’s end. The AO is directed to afford the assessee right to cross-examine the persons from whom the AO received information and based on which he made the impugned addition. The AO will afford opportunity of being heard to the assessee. Disallowance of 40% of expenditure claimed by the assessee in earning income from LIC - HELD THAT:- It is clear from perusal of the conclusion in the CIT(A)’s order that he has agreed with the contention of the assessee that the disallowance of expenses is on the higher side. Nevertheless, he has sustained the addition for want of supporting evidence filed by the assessee - disallowance of 15% of the expenses claimed by the assessee would be just and reasonable considering the facts and circumstances of the case and the observations of the CIT(A).
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