An addition of ₹ 10.33 Cr as commission income in the hands of the Auto Rickshaw Driver – ITAT Deleted addition with direction that the real culprits should be investigated
Mumbai Tribunal in the case of Surendra Kumar Rajmani Mishra (ITA No 112/Mum/2024) allowed the appeal of Assessee, an auto-rickshaw driver, and directed the deletion of the addition of ₹10,33,38,610/- as commission income with finding that the AO’s action was unjustified and that the real culprits should be investigated.
Let us have a Short Overview of the case:
Key Issue
The primary issue is whether the addition of ₹10,33,38,610/- by the AO was justified.
Facts of the Case
The AO discovered that M/s. S5 Trading Pvt. Ltd., Crystal Corporation, and M/s. Aqua Trading Company had CD accounts with Dhanlaxmi Bank Ltd., Fort Branch, Mumbai, which were opened in June 2010 and closed on 14th July 2011.
Large volumes of funds were transacted among these accounts, including RTGS transfers of ₹2 Crores each from M/s. Ravi Kumar Distilleries Ltd.
The bank account in the name of M/s. Aqua Trading Company had credit transactions amounting to ₹1,03,33,86,100/-.
The assessee, Surendra Kumar Rajmani Mishra, claimed that the account was operated by Shri Raju Bhimrajka and that he received only ₹2,000/- per month as commission, which he offered for taxation.
The AO, however, added the entire amount of ₹1,03,33,86,100/- to the assessee’s income, treating it as commission income.
Tribunal’s Findings
The Tribunal noted that the assessee is an auto-rickshaw driver who was lured by Shri Raju Bhimrajka to carry on the business in the name of M/s. Aqua Trading Company.
The Tribunal found it unimaginable that an auto-rickshaw driver could conduct transactions amounting to ₹1,03,33,86,100/-.
The AO had complete information about the three companies and the transactions but did not verify the real culprits and instead taxed the entire amount in the hands of the assessee.
The Tribunal held that the AO’s action was unjustified and directed the deletion of the impugned addition.
The Tribunal clarified that this decision should not be considered as a precedent in any other case and that the AO is free to take action against the real culprits.
The copy of the order is as under:
