Kailash Kumar Patwari Vs DCIT (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT), Kolkata, decided cross-appeals filed by the assessee and the Revenue arising from separate orders of the Commissioner of Income Tax (Appeals) [CIT(A)] for multiple assessment years. Since the issues were common across all years, the Tribunal treated Assessment Year (AY) 2013-14 as the lead case and applied its findings to the remaining appeals.
The assessee challenged the estimation of commission income, the validity of the reopening of assessment under Section 147 of the Income Tax Act, and the reliance placed on incriminating material allegedly recovered from a third party. The Revenue, on the other hand, challenged the CIT(A)’s reduction of the commission rate from 1.5% to 0.15%.
The assessee had originally filed a return declaring income of ₹1,84,740. A search under Section 132 was conducted on 8 March 2022 at the assessee’s office, residential premises, and bank locker. During the search, various documents and electronic data were seized. Based on these materials, the assessment for AY 2013-14 was reopened under Section 148. The assessee subsequently filed a return declaring income of ₹7,43,819.
During reassessment, the Assessing Officer (AO) relied upon tally data maintained in the name “SGJN,” allegedly recovered from a laptop seized at Todi Mansion. According to the assessee, the laptop and premises did not belong to him and the data related to another individual. The AO nevertheless concluded that the assessee had provided accommodation entries amounting to ₹1,334.10 crore during the relevant year and estimated commission income at 1.5%, resulting in an addition of ₹21.82 crore.
