Ananthanarayanan Rajasekaran Vs ITO (ITAT Chennai)
Income Tax Appellate Tribunal (ITAT) recently provided relief to Ananthanarayanan Rajasekaran in a case concerning a ₹118.25 Lakh cash deposit made during the 2016-17 assessment year. The assessee, a ticket booking agent, failed to provide supporting documents for the cash deposits, leading the Assessing Officer (AO) to estimate the income at a 10% margin, resulting in an addition of ₹11.82 Lakh to the taxable income. The Commissioner of Income Tax (Appeals) (CIT(A)) upheld this estimation.
However, during the appeal before the ITAT, the appellant’s representative presented a profitability chart for the years 2013-14 to 2024-25, highlighting that the margins in ticketing services are typically low due to commission being received on a per-ticket basis. The ITAT agreed with the argument, acknowledging the low-profit nature of the business. Consequently, the Tribunal directed the AO to reduce the estimated income margin to 2%, amounting to ₹2.37 Lakh (2% of ₹118.25 Lakh), which is an amount over and above the income admitted in the return. This decision provided a partial relief to the assessee, lowering the estimated addition to taxable income. The appeal was partly allowed.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 22-08-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s. 144 of the Act on 1912-2018.
