Dandu Madhuvarma Vs ITO (ITAT Visakhapatnam)
ITAT Visakhapatnam sends back ₹4.10 Cr Commission Income dispute for fresh examination – Rule 46A violation found
Visakhapatnam ITAT has remanded a case involving alleged undisclosed commission income of over ₹4.10 crore back to AO after finding that the CIT(A) had accepted additional evidence without complying with Rule 46A.
Assessee, an individual engaged in the business of trading & cultivating live fish prawns under the proprietorship concern Arunodaya Aqua, filed his return for AY 2022-23 declaring an income of ₹7.78 lakh. The case was selected for scrutiny under CASS due to large turnover without a tax audit u/s 44AB.
During assessment, AO noticed that the assessee had effected commission sales amounting to ₹5.49 crore but disclosed only ₹1.34 lakh as commission income under the head “Income from Other Sources”. Treating the declared figure as unreasonably low, AO estimated commission income at ₹4.11 crore. Additionally, 25% of certain expenses claimed, totaling ₹49.55 lakh, were disallowed & total income was assessed at ₹4.68 crore.
Before CIT(A), assessee submitted additional evidence including bank statements, supplier confirmations & ITR acknowledgements to explain the nature of transactions. CIT(A) deleted the entire estimated commission addition of ₹4.10 crore & restricted the disallowance of expenses from ₹49.55 lakh to ₹15.85 lakh.
