2023 (1) TMI 627 - AT - Income Tax

Reopening of assessment u/s 147 - assessee had taken specific ground that it had not received any notice and the notice u/s 148 of the Act was served upon its Chartered Accountant and not upon the assessee - HELD THAT:- We find that the original assessment was framed u/s 143(3) of the Act when a pointed query regarding objection that no notice u/s 148 of the Act was served upon the assessee, was raised by him. Assessee could not point out to any evidence regarding the assessment being framed u/s 147 of the Act except the contents of the Remand Report filed before Ld.CIT(A) - The material placed before us, does not support the claim that the assessment was re-opened under the provision of section 147 of the Act. Even there is no such fact is recorded by the AO in the body of the assessment order. Moreover, the Revenue has also not placed any such material before us. Therefore, Ground raised by the assessee are dismissed since they are not backed by any material evidence.

Addition representing 5% of the assessed income of the wife of the assessee without appreciating that no income of the wife could be added in the hands of the assessee - rate of commission applied by the authority below - HELD THAT:- So far the decision of CIT(A) for applying 5% of the total addition as income of the assessee is backed by binding precedents. CIT DR could not controvert the finding of Ld.CIT(A) by bringing any other binding precedents to our notice. Therefore, the decision of CIT(A) for estimating commission income cannot be faulted. However, under the identical facts, the Co-ordinate Bench of the Tribunal in various decisions, has taken the rate of earning of commission varying from 0.55% to 1.25%. Therefore, looking to the facts of the present case, it would sub-serve the interest of justice if the rate of earning of commission is adopted at the rate prevalent in the same line of business. Therefore, the addition is restricted to 1.25 % of the total amount.

Disallowance of expenditure incurred claimed by the assessee on surmises, conjecture and suspicion -assessee submitted that CIT(A) was justified in granting part relief as the expenditure was incurred for business purposes. The entire expenditure should have been allowed by Ld.CIT(A) - HELD THAT:- No details as to number of the companies or operations of the companies are emerging from either the order of assessment or other material on record. In light of the above it is necessary to estimate the disallowance and keeping in view the fact that genuineness of the expenditure has not been disputed, considered it reasonable to sustain disallowance of 20% of the expenditure claimed by the appellant.