The 27-year-old, who has not played since refusing to warm up during a Champions League match in September, has angered the Premier League club with his prolonged absence since November and is looking to leave in this January transfer window.
"In response to speculation, the club confirms that Carlos Tevez was found guilty by a disciplinary hearing on 21 December of gross misconduct for serious breaches of contract and was fined six weeks' wages," the source said.
"Carlos elected to appeal the finding, which was dismissed by an appeal panel made up of club directors. He has until 30th January to make a final appeal to the Premier League."
The striker forfeited the right to a six-million-pound loyalty bonus after handing in a transfer request last season, while local media reported he had not been paid since November and he was also fined two weeks' wages in September.
Chairman Khaldoon Al Mubarak issued a strongly worded statement to Abu Dhabi's The National newspaper, saying the club would hold Tevez to his contract if no suitable buyer was found this month.
He confirmed there had been talks with Inter and PSG, while also issuing a warning to AC Milan over their "misplaced sense of confidence" about a move.
"Carlos remains a player with contractual obligations to Manchester City for the next two-and-a-half seasons. Unless we receive an offer that we deem appropriate the terms of his contract will be enforced," he said.
"Inter Milan and Paris Saint-Germain approached discussions with us in good faith and it is always a positive experience to deal with people with a professional approach.
"As things stand, AC Milan isn't an option for Carlos Tevez. [Milan chief executive] Mr. [Adriano] Galliani and his advisors have developed a misplaced sense of confidence from their premature discussions with Carlos and his advisors," he added.
"If they want to be a consideration in this transfer window they would do better to stop congratulating one another and begin to look at how they would meet our terms."
Almost four months since City manager Roberto Mancini declared Tevez "finished" at the club after his conduct during the defeat at Bayern Munich, the striker's future is still no clearer with the transfer window closing in a week's time.
The latest disciplinary action comes after Tevez was fined two weeks' wages and suspended by the club during an internal investigation straight after the September incident.
