Case Law Details
Chandan Singh Rana Vs CIT(Appeals) (ITAT Delhi)
In the case abovementioned ITAT Delhi remanded the matter to AO for fresh adjudication after observing that there is difference in estimation in previous AY.
AO made addition of Rs. 22,89,114/- by estimating 8% of the gross receipts from sale of Airtel recharge coupons. AO, further, made addition of Rs.2,22,376/- u/s. 69A on account of difference between the amount deposited in the account from sales and the amount transferred to Aircel.
CIT (A) confirmed the additions.
It was argued on behalf of assessee that in the preceding AY, the margin of the assessee from the sale of recharge coupons was 1.75% (approx) and the same was accepted by the Department. Estimation of profit margin at 8% by AO is very much on higher side. Assessee placed ITRs of the preceding AYs. On the other side revenue argued that assessee has failed to substantiate its claim before the lower authorities, and he cannot be allowed to furnish fresh evidence at this second appellate stage.
ITAT held that there is no change in the business conducted by the assessee or the profit margins in the impugned AY. Assessee placed ITR pertaining to preceding AY in support of his contention. ITAT restore the matter back to the AO for fresh adjudication.
In short the order was set aside and the appeal filed by the assessee was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as ‘the CIT(A)’) dated 16.04.2024, for assessment year 2017-18.
2. Shri R.K Yadav, appearing on behalf of the assessee submits that the Assessing Officer (AO) in assessment proceedings has made estimated addition of Rs.22,89,114/- as Business Income. The AO has erred in estimating income of the assessee at 8% of the gross receipts from sale of Aircel recharge coupons. Whereas in the preceding assessment years the margin of the assessee from the sale of recharge coupons was 1.75% (approx) and the same was accepted by the Department Estimation of profit margin at 8% by AO is very much on higher side. The assessee carried issue in appeal before the CIT(A). The CIT(A) confirmed the addition. Apart from above, the Assessing Officer made addition of Rs.2,22,376/- u/s. 69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on account of difference between the amount deposited in the account from sales and the amount transferred to Aircel. The ld. Counsel for the assessee submits that the assessee wishes to place on record certain documents which include Income Tax Return of the preceding assessment years, wherein the profit margin of 1.75% has been accepted by the Revenue.
3. Per contra, Shri Vivek Kumar Upadhyay representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submitted that the assessee has failed to substantiate its claim before the lower authorities. Now, the assessee cannot be allowed to furnish fresh evidence at this second appellate stage.
4. We have heard the submissions made by rival sides and have examined the orders of authorities below. The nature of business carried out by the assessee is not a dispute. The short contention of the assessee is that in the preceding assessment years the assessee has declared profit margin 1.75% on of total turnover and the same was accepted by the Revenue. There has been no change in the business conducted by the assessee or the profit margins in the impugned assessment year. The contention of the assessee is that the AO has erred in estimating margins at the rate of 8% which is very much on the higher To support his contentions the assessee has now placed on record his Income Tax Returns and computations for the preceding assessment years. Taking into consideration entire facts of the case, we deem it appropriate to restore this appeal back to the AO for fresh adjudication after considering the documents furnished by the assessee to support his contentions. The AO shall reframe the assessment order after affording reasonable opportunity of making submissions to the assessee, in accordance with law.
5. In the result, impugned order is set aside and appeal of the assessee is allowed.
Order pronounced in the open court on Wednesday the 20th day of November, 2024.
Author Bio
