J.B.PARDIWALA,J. - (1.) This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short, 'the Act 1961') is at the instance of the assessee and is directed against the order passed by the Income Tax Appellate Tribunal, Surat Bench, Surat, in the C.O. No.161/ AHD/2015 arising out of the I.T.A No.2287/ AHD/2015 dated 23rd March 2018 for the Assessment Year 2011-12.
(2.) The appellant has proposed the following substantial question of law : "Whether in the facts and circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming addition of Rs.22,53,100/- on account of alleged commission income @ 2% without there being any evidence or material on record for making such estimate "
(3.) It appears from the materials on record that the appellant had filed his return of income on 15th September 2011 declaring the total income at Rs.5,34,342/-. The return was processed under Section 143(1) of the Act. The case was selected for scrutiny and notice under Section 143(2) of the Act was issued dated 31st July 2012. The appellant filed his revised return of income on 30th March 2012, declaring the total income of Rs.7,44,070/- and claimed refund of Rs.23,26,700/-. The notice under Section 142(1) of the Act was issued on 24th May 2013. According to the appellant, he derived income from civil contract (labour job work). The appellant showed gross business receipts of Rs.12,00,02,100/- and a net profit of Rs.5,37,942/-. The refund of Rs.23,26,700/- out of the prepaid taxes contained tax deducted by M/s.PACL Limited against the payment for labour. The appellant showed labour receipts income account of Rs.12,00,02,100/-. The Assessing Officer, relying on the statement of the appellant recorded under Section 131 of the Act and the information received subsequent to the search in the case of M/s.PACL India Limited, came to the conclusion that the dealings of the appellant with M/s.PACL India Limited were accommodation entries. The Assessing Officer issued showcause notice dated 14th March 2014, calling upon the appellant to show-cause as to why the labour receipt income or Rs.12,00,02,100/- should not be treated as income from other sources under Section 56 of the Act. The appellant, vide his reply dated 21st March 2014, explained that he had only received commission of Rs.0.30 on Rs.100/-, i.e. Rs.3,60,000/- on Rs.12,00,02,100/- which had already been included in the net profit and reflected in the profit and loss account. The Assessing Officer rejected the books of accounts under Section 145(3) of the Act and estimated the income at 10% of the gross receipts. The Assessing Officer made an addition of Rs.1,20,00,210/- as income from other sources under Section 56 of the Act.;