SATAIAH MOLUGU,HYDERABAD vs. INCOME TAX OFFICER, WARD-15(4 ), HYDERABAD

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ITA 213/HYD/2020Status: DisposedITAT Hyderabad09 February 20212 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the 5% profit estimation by the Assessing Officer was without any benchmark. Therefore, the profit element was reduced to 3.5% in the assessee's hands.

What were the facts?

The assessee's appeal challenges the estimation of income at 5% profit on cash deposits of Rs. 1,84,15,380/-. The assessee was reportedly a telecom commission agent and recharge coupon provider.

What were the issues?

Whether the estimation of profit at 5% on cash deposits by the Assessing Officer was justified and if a lower estimation is warranted.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘SMC’ BENCH : Hyderabad

Before: SHRI S.S. GODARA

Hearing: 27/01/2021Pronounced: 22/02/2021

Date of Hearing : 27/01/2021 Date of Pronouncement : 22/02/2021 O R D E R This assessee’s appeal arises against the Commissioner of Income Tax (Appeals) -7 [CIT(A)] Hyderabad’s order dated 26.11.2019 passed in case no.45/CIT(A)-7/2019-20 in proceedings u/s 144 of the Income Tax Act, 1961 [in short ‘the Act’] for AY 2016-17.

Case called twice. None appeared on behalf of assessee. Heard Shri Narayanamurthy Naik, DR representing the department. Case file perused.

2.

With able assistance from revenue’s side, it is noticed at the outset that assessee’s sole substantive grievance challenges the correctness of both lower authorities’ action in estimating assessee’s icome @ 5% profit element qua the cash deposits in bank account to the tune of Rs.1,84,15,380/- on the ground that he has been carrying out telecom commission agent/recharge coupon AY 2016-17 Shri Sataiah Molugu, Hyd. provider of M/s Bharathi Airtel Limited. I notice that the Assessing officer’s impugned estimation of assessing assessee’s profit element at 5% is without any benchmark. In all these circumstances, I deem it appropriate that interest of justice would be met impugned profit element of 5% in assessee’s hands is reduced to 3.5% only with a rider that the instant estimation shall not be taken as precedent in any other case or A.Y.; as the case may be. Necessary computation shall follow as per law. This assessee’s appeal is partly allowed in above terms.

Order pronounced in Open Court on 22/02/2021.

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