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| The Tax Publishers2019 TaxPub(DT) 3701 (Mad-HC) : (2019) 265 TAXMAN 0009 INCOME TAX ACT, 1961
Section 69A
As assessee failed to adduce any evidence for establishing that 1% was only reasonable estimate of income, assessable in his hands and moreover, as assessee failed to disclose the identity of purchasers, assessee could only be treated as engaged in the business of his own and not as an agent. Therefore, the Estimate of Income in the business of purchase and sale of gold was required to be made by AO.
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Income from undisclosed sources - Addition under section 69A - Estimation of Profit Ratio -
Assessee was engaged in business of purchase and sale of gold from finance companies and disclosed only commission income of 1% for the total quantum of turnover of purchase and sale of gold. AO estimated the income of assessee at 3.5% of the turnover of gold purchased and sold by him and also denied assessee's claim of refund of TCS collected by finance company, as assessee failed to furnish the details of purchasers. Assessee contended that he only acted as an agent on behalf of purchasers and earned only commission, which was duly disclosed and, therefore, additions under section 69A was merely to deny his claim of refund of TCS on sale of gold. Held: Assessee, except contending before AO that 3.5% of income was unreasonable, failed to adduce any evidence for establishing that 1% was only reasonable Estimate of Income, assessable in his hands. Moreover, assessee's claim to be only acting as an Agent, in the absence of any disclosure about the identity of the purchasers, could only be treated as engaged in the said business of his own. Therefore, the Estimate of Income in the business of purchase and sale of gold was required to be made by AO.
REFERRED : ITO v. M/s. Vonamala Jagadishwaraiah [ITA No. 1783/Hyd/2013, C.O. No. 54/Hyd/14, dt. 8-4-2015]
FAVOUR : Against the assessee
A.Y. : 2013-14
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