TMI Blog2017 (4) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee was earning 1% commission of the deposits in the bank account was only a surmise. Even if there were some commission earnings it gets subsumed in the peak credit considered for addition. The further addition was not justified in the fact and circumstances of the case, such addition stands deleted. - I.T.A. No.1731/Mds/2014, I.T.A. No.1871/Mds/2014 - - - Dated:- 5-4-2017 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER For the Appellant : Shri.S. Sridhar, Advocate For the Respondent : Shri. Renga rajan, JCIT ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER These are cross appeals filed by the assessee and Revenue respectively directed against an order dated 14.03.2014 of ld. Commissioner of Income-tax (Appeals), Tiruchirapalli. 2. Facts apropos are that assessee had filed return of income for the impugned assessment year disclosing income of ₹ 3,10,500/- as income from commission on money lending . Ld. Assessing Officer was having AIR information that assessee had deposits aggregating ₹ 3,67,75,800/- in his saving bank accounts M/s. Axis Bank Ltd, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 5 S. Kulandaian 36,50,000 15,55,000 5 2,05,000 4. Reply of the assessee to the above query reads as under:- (1) Assessee does not maintain any details of the persons from whom the commission was received. (2) The assessee cannot charge uniform rate for all the transactions entered into by him as the same depends on the quantum of the loan. (4) The assessee has not borrowed any money from any person as evidenced by the cash flow statement. Hence, the requirement of filing the name, address and PAN of such persons are not applicable to the assessee. (5) The following factors in the business of the assessee are to be considered (a) The money is advanced both by cash as well as by cheque. (b) The advances are also recovered both by cash as well as by cheque. (c) The cash / cheques as in para (b) above are deposited in the bank account. (d) The funds available in the bank account are utilised for making the advances both by drawing cash as well as by issue of cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the next hearing I shall furnish the details with regard to from whom, how much was received and how much was returned and how much I received as commission in respect of the transactions of VTM. Ganesan and Oasis Supermarket. Q. No.14 Were you liable to pay any outstanding amount to anyone as on 31/03/2010. If so, did you pay any interestRs. Ans. I did not get any loan from anybody nor paid any interest. Q. No.15 Likewise, were you liable to get any outstanding amount from anyone as on 31.03.2010. If so, did you receive any interest. Ans. I am not liable to receive any amount nor any commission. Q. No.16 Have you made any investment in any institutionRs. Ans. No. Q. No.17 Are you a share holder in any institutionRs. Ans. No. Q. No. 19 You have stated that you have received commission on money lending. But on scrutinising the bank account, it is seen that the entire transactions, i.e. both debit and credit, have been made in your account only. Weren't they the commission receivable by youRs. Give details. Ans. Out of the total amount of debit and credit, 1% is my com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer claim of the assessee that withdrawals from the bank were recycled was never substantiated with evidence. He treated the entire cash deposits of ₹ 3,67,75,800/- as unexplained income of the assessee, invested in money lending business and made an addition u/s.69A of the Act. 6. Aggrieved, assessee moved in appeal before ld. Commissioner of Income Tax (Appeals). Argument of the assessee was that the addition was purely based on imaginative figures. Relying on the judgments of Hon ble Apex Court in the case of Poona Electric Company vs. CIT 57 ITR 521, State Bank of Travancore vs. CIT 158 ITR 102 and Udayan Chinubhai vs. CIT 111 ITR 584, assessee contended that real income alone could be taxed and every receipt could not be considered as income. Ld. Commissioner of Income Tax (Appeals) after considering the submissions of the assessee held that ld. Assessing Officer could not bring out any material to prove any money lending business being carried on by the assessee. As per ld. Commissioner of Income Tax (Appeals) credits in the bank account were spread throughout the year and preceded by debits representing withdrawal of funds. According to him, ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cash withdrawal as long as the time interval between the withdrawals and deposits are not so significantly substantial to disbelieve the source. Whether the assessee was carrying on any money lending business, has no relevance when an assessment is made considering the amounts deposited in the bank accounts. However, in our opinion cash deposits alone cannot be the subject of an addition ignoring the cash withdrawals. Hence, finding of ld. Commissioner of Income Tax (Appeals) that peak credit of ₹ 18,12,888/- alone could have been considered for the addition cannot be faulted. In so far as transactions other than cash are concerned, it may be true that assessee was earning commission from money lending. However, the finding of the ld. Commissioner of Income Tax (Appeals) that assessee was earning 1% commission of the deposits in the bank account was only a surmise. Even if there were some commission earnings it gets subsumed in the peak credit of ₹ 18,12,888/- considered for addition. The further addition of ₹ 3,67,758/- was not justified in the fact and circumstances of the case, such addition stands deleted. 10. In the result, appeal of the Revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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