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2024 (1) TMI 479 - ITAT INDOREEstimation of commission income - unaccounted cash found during the search as well as in the raid of Police authorities - As per DR assessee indulged in unaccounted transaction and non-submissions of the supporting details and documents regarding commission income, the AO has estimated the commission income by increasing 20% - CIT(A) deleted addition - HELD THAT:- AO has made ad hoc addition by estimating the commission income with increase of 20% of the income already declared by the assesse. The sole basis of the AO for increasing the commission income is the past unaccounted cash found during the search as well as in the raid of Police authorities in the year 1998 and 2008 respectively. Therefore, the AO suspected the unaccounted transactions of earning commission income by the assessee for these years also. Addition made by the AO is purely on the basis of the suspicion without any material or evidence to reflect any unaccounted commission income of the assessee for these years. As it is manifest from the assessment order that the AO has not referred to any incriminating material disclosing any undisclosed income of commission for these assessment year either found during the search and seizure action or even during the assessment proceedings. AO has not brought any material on record to show higher commission income earned by the assessee. The commission income duly recorded in the books of account and declared in the return of income cannot be disturbed in absence of any material. Accordingly we do not find any error or illegality in the impugned order of the CIT(A) qua this issue. Unexplained unsecured loan - Addition deleted by CIT(A) - HELD THAT:- There is no dispute that the loans were received by the assessee through banking channels as evident from the bank account statement of the assessee as well as the loan creditors. Further, it is also evident that most of the loans were repaid by the assessee in the very next year as reflected in the bank account statement and ledger accounts produced by the assesse. Accordingly in view of the documentary evidence produced by the assessee showing the transactions through banking channel and subsequent repayment of loan amounts through banking channel and in the absence of any defect pointed out by the AO in the evidence produced by the assesse, we do not find any error or illegal in the impugned order of the CIT(A) who has duly considered the supporting evidence produced by the assessee as well as the remand report of the AO before passing impugned order. Undisclosed investment - Alleged Hawala transactions - Addition deleted by the CIT(A) - HELD THAT:- Once it is found that such party was involved in the Hawala transactions then the text massages found from the mobile of such party send from the mobile of the assessee lead to a safe inference that the involvement of the assessee in the Hawala transactions cannot be ruled out. Even otherwise the searched party as well as assessee did not dispute the ownership of the respective mobile numbers. However, the question arises whether the involvement of the assessee in Hawala transaction would attract the addition of the entire quantum of the transactions or only the commission income as would have been earned by the assessee on such transactions. Therefore, in the facts and circumstances of the case as well as in view of the decision of Coordinate Bench of this tribunal in case of ACIT vs. Narendra Gupta [2023 (1) TMI 1004 - ITAT INDORE] we concur with the view of the CIT(A) that only the commission income in the hand of the assessee is assessable to tax. Hence, we uphold the impugned order of the CIT(A) qua this issue. Validity of assessment u/s 153C - Whether the documents found during search and seizure operations, "pertains" to assessee and do not "belong" to assessee? - HELD THAT:- As assessee has fairly submitted that this issue is now covered by the Hon’ble Supreme Court in case of ITO vs. Vikram Sujitkumar Bhatia [2023 (4) TMI 296 - SUPREME COURT] Accordingly in view of the judgment of Hon’ble Supreme Court as well as fair statement of Ld. AR of the assessee ground no.2 is dismissed being devoid of any merit. No satisfaction note recorded by the AO of searched person - When the satisfaction was recorded by the AO who is having jurisdiction over the assessee as well as search person then there is no infirmity in the recording of satisfaction for want of separate satisfaction by the AO of search person as well as by the AO of the assessee. Accordingly we do not find any reason to interfere with the impugned order of the CIT(A) qua this issue. Unexplained expenditure on foreign trips - HELD THAT:- The assessee has produced the certificate of M/s Grand Agencies, Indore who has confirmed the fact of sponsoring foreign trip of the assessee and bearing expenses. Once the assessee has produced the certificate of M/s. Grand Agencies Indore claiming and confirming the expenditure incurred on foreign trips of the assessee then the AO ought to have conducted further inquiry to ascertain the correctness of said claim of the assesse. Even otherwise the AO has only estimated the expenditure and not even referred any basis for such estimation of the expenditure. Accordingly, in the facts and circumstances of the case and when the assessee has explained source of the expenditure and also produced confirmation/certification of sponsoring entity then the addition made by AO without conducting further inquiry is not justified. Hence, in the interest of justice this issue is set aside to the record of the AO for fresh adjudication.
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