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Facts
The assessee's appeal was filed with a delay of 208 days against an order of the CIT(A). The assessee is an individual engaged in the business of operating passenger buses. The Assessing Officer made an addition based on cash deposits, and the CIT(A) adopted a profit rate of 8% on receipts.
Held
The Tribunal condoned the delay in filing the appeal. It held that the CIT(A)'s adoption of an 8% profit rate on total receipts should be treated as business income, not income from other sources, and allowed the grounds raised by the assessee.
Key Issues
Whether the CIT(A) was justified in adopting an 8% profit rate on receipts and whether the income should be treated as business income or income from other sources.
Sections Cited
115BBE, 147, 148, 143(3)
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Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
Year: 2018-19 Muthaiya Anandan, Vs. The Income Tax Officer, No. 8, Manickam Pillai Street, Non Corporate Ward 1(1), Madakulam, Madurai 625 003. Madurai. [PAN:AFJPA4111N] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri R. Venkata Raman, C.A. ��थ� की ओर से/Respondent by : Dr. M.D. Vijay Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 04.03.2025 घोषणा की तारीख /Date of Pronouncement : 07.03.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 19.02.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2018-19.
We find that this appeal is filed with a delay of 208 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 3 grounds of appeal, amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in adopting profit rate at 8% in the facts and circumstances of the case.
4. At the outset, we note that the assessee is an individual and engaged in the business of operating passenger buses. The Assessing Officer, on an information, pertaining to the cash deposit in State Bank of India and HDFC of the assessee, completed reassessment, inter alia, making addition of ₹.3,59,11,562/-. The ld. CIT(A), taking into consideration the audit report, cash deposits and withdrawals, adopted the profit rate at 8% of receipts shown in the profit & loss account.
5. Before us, the ld. AR Shri R. Venkata Raman, C.A. submits that the Assessing Officer passed giving effect order, in pursuance of the directions of the ld. CIT(A) in the first appeal, held the income as computed by adopting the profit rate as income from other sources and applied the provisions of section 115BBE of the Act. The ld. AR vehemently argued that the Assessing Officer fell in error in not treating the income of the assessee under the head business as there was no finding stated to have been given by the ld. CIT(A) in the impugned order. He prayed that the total income as determined by the ld. CIT(A) adopting 8% profit rate of total receipts as reflecting in the profit & loss account may be treated under the head income from business, but not under the head income from other sources.
The ld. DR Dr. M.D. Vijay Kumar, JCIT submits that the finding of the ld. CIT(A) is very much clear that the total income of the assessee is to be treated as business income only, but, not income from other sources and drew our attention to the first para of page 15 of the impugned order. Taking into consideration of the same, we find force in the argument of the ld. AR when there is no dispute with regard to the business of the assessee which is clear from page 15 of the impugned order i.e., travels by operating buses, there should not be any confusion in this regard. Thus, we make it clear that the order of the ld. CIT(A) in adopting 8% on total receipts of ₹.2,70,78,801/- is to be treated as income from business. Therefore, the grounds raised by the assessee are allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 07th March, 2025 at Chennai.