Rajesh Kumar , Karnal V. ACIT, Circle Karnal, Karnal

ITA 7722/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5347 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: RAKESH JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.7722/DEL/2018 ASSESSMENT YEAR: 2010-11 RAJESH KUMAR, PRAVESH KUMAR SHARMA, ADV., 493-L MODEL TOWN, KARNAL. VS. ACIT, CIRCLE KARNAL, KARNAL. TAN/PAN: BBQPK 1126H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH JAIN, CA AND SHRI GURJEET SINGH, CA RESPONDENT BY: SHRI S.L. ANURAGI, SR.D.R. DATE OF HEARING: 25 07 2019 DATE OF PRONOUNCEMENT: 16 10 2019 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 10.10.2018 PASSED BY COMMISSIONER OF INCOME TAX (APPEALS), KARNAL FOR TH E QUANTUM OF ASSESSMENT PASSED U/S.147 FOR THE ASSESS MENT YEAR 2010-11. THE SOLE GROUNDS RAISED IN THE APPEAL READS AS UNDER: 1. THAT LD. CIT(A) ERRED IN LAW IN CONFIRMING THE ESTIMATING OF GROSS RECEIPTS OF RS.35,000/- BY LD. ACIT WHEREAS THE REC EIPTS PER STUDENT IS RS.20,000/- IN THE HANDS OF THE APPELLAN T. I.T.A. NO.7722/DEL/2018 2 2. THE FACTS IN BRIEF ARE THAT THE ASSESSING OFFICE R RECEIVED AN INFORMATION THAT ASSESSEE HAD DEPOSITED CASH AMO UNT OF RS.90,47,610/- IN HIS BANK ACCOUNTS MAINTAINED WITH HDFC BANK LTD. AND AXIS BANK DURING THE FINANCIAL YEAR 2 009-10. IN THE WAKE OF SUCH AN INFORMATION, THE ASSESSEES CASE WAS REOPENED U/S.147 BY ISSUANCE OF NOTICE U/S.148 DATE D 31.03.2017. THE LD. ASSESSING OFFICER ON THE PERUSA L OF THE BANK STATEMENT FOUND THAT ASSESSEE HAD DEPOSITED AM OUNT OF RS.65,97,610/- IN HDFC BANK AND RS.24,50,000/- IN T HE AXIS BANK. IN RESPONSE TO THE FINAL SHOW CAUSE NOTI CE, THE ASSESSEE SUBMITTED THAT HE HAS BEEN SENDING THE STU DENTS TO SCHOOL OF MANAGEMENT, LONDON FOR STUDY AND IN LIEU OF THE SAME ASSESSEE HAD RECEIVED COMMISSION FROM THE STID ENTS. THE ASSESSEE HAS BEEN CHARGING COMMISSION OF RS. 25 ,000/- TO 50,000/- PER STUDENT AND DURING THE YEAR IT WAS SUBMITTED THAT HE HAS RECEIVED COMMISSION FROM 20-22 STUDENTS WHO WERE SENT ABROAD. THE AMOUNT OF COMMISSION FEES REC EIVED FROM THE STUDENTS WAS DEPOSITED IN THE BANK ACCOUNT S AND CERTAIN AMOUNT RECEIVED FROM OTHER SOURCES WAS ALSO DEPOSITED IN THE BANK ACCOUNT. HOWEVER, ON THE BASI S OF CERTAIN DOCUMENTS AND PAPERS PLACED DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER AGREE D WITH THE CONTENTION OF THE ASSESSEE THAT HE WAS SENDING STUDENTS ABROAD FOR STUDIES AND HELD THAT ASSESSEE ON AN AVE RAGE HAS RECEIVED COMMISSION OF RS.35,000/- PER STUDENT. IF 22 STUDENTS WERE SENT ABROAD, THEN ASSESSEES INCOME S HOULD BE I.T.A. NO.7722/DEL/2018 3 RS.7,70,000/-. ACCORDINGLY, THE AMOUNT OF RS.7,70,0 00/- HAS BEEN ASSESSED AS INCOME OF THE ASSESSEE. 3. LD. CIT (A) HAS REDUCED THE ADDITION BY GIVING R ELIEF OF RS.2 LACS TOWARDS ESTIMATED EXPENSES FOR RUNNING OF THE OFFICE ESTABLISHMENT, ETC. AS ALLOWABLE EXPENSE. ACCORDING LY, ADDITION SUSTAINED WAS RS.5,70,000/-. 4. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT ONLY DISPUTE IS WITH REGARD TO THE ESTIMATE OF COMMISSION RECEIVED FROM STUDENTS W HOM ASSESSEE WAS FACILITATING IN SENDING FOR MANAGEMENT STUDIES IN LONDON. THE ASSESSEE HAD STATED THAT HE WAS RECE IVING COMMISSION RANGING BETWEEN RS.25,000/- TO 50,000/- PER STUDENT. THE LD. ASSESSING OFFICER HAS WORKED OUT A N AVERAGE OF RS.35,000/- PER STUDENT AND HAS ESTIMATED THE GR OSS RECEIPTS AT RS.7,70,000/- WHICH HAS BEEN ADDED TO T HE INCOME OF THE ASSESSEE. LD. CIT (A) HAS GIVEN BENEF IT OF CERTAIN EXPENDITURE ON ESTIMATE BASIS AND HAS REDUCED SUM O F RS.2 LAC. LOOKING TO THE FACT THAT BOTH THE AUTHORITIES HAVE ACCEPTED THAT THE ASSESSEE WAS EARNING COMMISSION F ROM THE STUDENTS FOR FACILITATING THEM TO SEND ABROAD FOR F URTHER STUDIES; AND IF ASSESSEE IS IN SUCH A BUSINESS, THE N ENTIRE GROSS RECEIPTS CANNOT BE ADDED. THUS, ON ESTIMATE B ASIS, WE HOLD THAT 50% OF THE SAID RECEIPTS I.E., RS7,70,000 /- SHOULD BE TAKEN AS PROFIT/INCOME WHICH SHOULD BE ADDED. ACCORDINGLY, ASSESSEE GETS RELIEF OF RS.3,85,000/-. I.T.A. NO.7722/DEL/2018 4 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2019. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 16 TH OCTOBER, 2019 PKK: