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Judgment
ORDER
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals-24), New Delhi [hereinafter referred to as “CIT(A)”] vide order dated 17.6.2025 pertaining to A.Y. 2019-20 arising out the assessment order dated 13.05.2021 passed u/s. 143(3) of the Income-tax Act, 1961, (in short ‘the Act’) on the following grounds:
That the order of passed by the Assessing Officer u/s. 143(3) of the Act and the order passed by the CIT(A) are bad in law, erroneous on facts, without proper appreciation of material on record and against the principles of natural justice.
That the Assessing Officer and the CIT(A) erred in treating the alleged commission income as “undisclosed income” liable to tax under section 115BBE, whereas the said income, if at all assessable, constitutes normal business income and is chargeable to tax under the regular provisions of the Act.
That the Assessing Officer and the CIT(A) failed to appreciate that the impugned income has a direct nexus with the regular business activities of the appellant and therefore, cannot be brought to tax under the deeming provisions of section 69A read with section 115BBE of the Act.
That the addition has been sustained on the basis of assumptions, presumptions and generalized business practices, without bringing on record any independent evidence, incriminating material or conclusive finding to establish receipt of unexplained income by the appellant.
That the Assessing Officer erred in law in issuing multiple summons under section 131 dated 28.1.2021 and 19.2.2021 without specifying any independent reasons, scope or purpose, thereby converting an assessment proceeding into a roving and fishing enquiry, which is impermissible in law.
That the assessment order dated 13.5.2021 was passed without due consideration of the replies and submissions filed by the appellant in response to notices under sections 131 and 142(1) rendering the assessment order non speaking and arbitrary.
The brief facts of the case are that assessee is engaged in the business of trading and commission agency of food grains under the name and style of M/s Shree Durga Ji Trading Company. He filed his original return of income u/s. 139(1) of the Act on 3.8.2019 declaring a total income of Rs. 3,65,760/-. In this case a search and seizure action u/s. 132 of the Act was carried out from 31.10.2018 to 3.11.2018 and during the said search and seizure operation cash of Rs. 5,21,900/- was found and seized. During the course of assessment proceedings, statement of oath of the assessee was recorded u/s. 131(1A) on 1.2.2021 and assessee has accepted in his statement that the cash found from his premises was his earning from commission but he has not offered it to tax. Further, in response to show cause notice dated 22.3.2021, assessee responded on 24.3.2021, stated that the cash seized at his place was of the party from which he used to trade grains. Assessing Officer noted that assessee has not recorded this amount in his books of account and explanation offered by him is contradictory and also not furnished evidence to verify the source of the cash seized. Thus, he noted that the cash of Rs. 5,21,900/- seized from premise of the assessee if found unexplained money as provided u/s. 69A of the Act, thus he added the same in the hands of the assessee by assessing the total income at Rs. 8,87,660/- vide his order dated 13.5.2021 passed u/s. 143(3) of the Act. Against which the assessee preferred the appeal before the CIT(A), who partly allowed the appeal of the assessee by observing that . Aggrieved, assessee is in appeal before us.
We have heard the rival contentions and perused the records. It reveals from the facts that the assessee is engaged in commission agency in food grains trade. The seized material and transactions clearly pertain to trading activities carried out on behalf of parties even as per the Assessing Officer the income is commission earned on transactions, and not independent unexplained cash. Hence, once the nature of receipt is accepted as commission, the same cannot be brought u/s. 69A. It is further noted that in the year 2018-19, the Assessing Officer himself accepted that commission rate is Rs. 2,000/- per crore of transaction. The lower authorities have wrongly considered the RTGS /banking transactions with cash transactions. Before us, Ld. AR for the assessee submitted that the issue in dispute is squarely covered by the decision of the Coordinate Bench from assessee’s own case decided in Revenue’s Appeal being ITA no. 3371/Del/2023 (A.Y. 2012-13) dated 26.9.2025 wherein, the Tribunal has held as under:-
“4.As could be seen from the above, the Ld. CIT(A) restricted the commission income to Rs. 83,818/- as against Rs. 4,19,09,065/-observing that in the assessment made u/s. 153A of the Act in the case of the assessee for assessment years 2013-14 to 2018-19 the commission income was assessed @2000/- per crore. In the circumstances, since in the assessments made u/s. 153A the commission income was assessed at 2,000 per crore, we see no reason not to adopt the same percentage for the assessment year under consideration and thus, we hold that the Ld. CIT(A) has rightly adopted the said percentage. Hence, we sustain the order of the Ld. CIT(A) and reject the grounds raised by the Revenue.
In view of the above factual matrix and respectfully following the aforesaid precedent, in assessee’s own case, it is observed that income of the assessee has been assessed by accepting ‘commission income @ Rs. 2000/- per crore’ as admitted by assessee in his statement (for assessment orders u/s. 153A for A.Y. 2013-14 and A.Yrs. 2016-17 to 2018-19 and there is no material change in facts and circumstances in the present case. Accordingly, the Assessing Officer is directed to restrict the commission income of assessee for A.Y. 2019-20 @ Rs. 2000/- per crore as considered by the Assessing Officer during the assessment proceedings for A.Y. 2013-14 and 2016-17 to 2018-19.
In the result the appeal of the assessee is allowed in the very terms.