Suresh Vs ITO (ITAT Chennai)
ITAT Chennai held that estimation of 8% as income on the total receipt by AO is justifiable since assessee failed to substantiate its claim of earning 5% commission on total receipt. Accordingly, addition confirmed and appeal dismissed.
Facts- The assessee has deposited cash of Rs 1,99,62,640/- in his saving bank account but has not filed return of income. The Department accordingly reopened the assessment by issuing notice u/s. 148 of the Act. The assessee in response to notice u/s. 148 of the Act has filed the return of income declaring total income of Rs.4,49,163/- by estimating 5% of the cash deposit as commission income. The A.O estimated the income @ 8% as the assessee could not produce any documents, agreement etc., in support of his contentions that he has earned commission only @ 5%. The Ld. CIT(A) has confirmed the addition.
Conclusion- Held that A.O estimated income @ 8% of amount deposited in the bank account as the assessee has not been able to substantiate the basis of income @5% filed in the return of income. The Ld. AR during assessment proceedings has stated that he only earns 5% commission income, however has not been able to substantiate the same and therefore, taking help of the provisions of Section 44AD of the Act, the Ld. A.O estimated the income @ 8% of the total receipt of Rs. 2,00,46,640/-. The Ld. CIT(A) has confirmed the addition as the assessee has not been able to substantiate his case. We do not find any infirmity in the order of Ld. CIT(A) and the AO as the assessee has not been able to substantiate the income shown in the return of income by documentary evidences. The assessee before us has also not submitted any documentary evidence in support of his contention of 5% commission. We accordingly uphold the order of Ld CIT(A) and confirm the addition made by the A.O.
