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Facts
The Assessing Officer (AO) estimated the assessee's business income at 8% of gross receipts from the sale of Aircel recharge coupons, despite a 1.75% profit margin being accepted in previous assessment years. Additionally, an amount of Rs. 2,22,376/- was added under section 69A due to a discrepancy between amounts deposited from sales and amounts transferred to Aircel. The CIT(A) confirmed these additions, leading to the assessee's appeal.
Held
The Tribunal set aside the impugned order and remanded the case back to the AO for fresh adjudication. The assessee is permitted to place on record new documents, including Income Tax Returns from preceding assessment years, to support its contention of a consistent 1.75% profit margin. The AO is directed to consider these documents and provide a reasonable opportunity for submissions before reframing the assessment order.
Key Issues
Whether the Assessing Officer was justified in estimating the assessee's business income at 8% of gross receipts, instead of the 1.75% accepted in prior years, and whether the addition under Section 69A was correctly applied.
Sections Cited
Section 69A of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH “B”, DELHI
(A.Y.2017-18) Chandan Singh Rana, 1819/202 Dhola Complex, Uday Chand Marg Kotla, South Extn. New Delhi 110003 ...... अपीलाथ�/Appellant PAN: AGKPR-8787-K बनाम Vs. Commissioner of Income Tax(Appeals), ..... �ितवादी/Respondent Ward 53(4), Delhi अपीलाथ� �ारा/ Appellant by : Shri R.K Yadav, Advocate �ितवादी�ारा/Respondent by : Shri Vivek Kumar Upadhyay, CIT-DR सुनवाई क� ितिथ/ Date of hearing : 20/11/2024 घोषणा क� ितिथ/ Date of pronouncement : : 20/11/2024 आदेश/ORDER
PER VIKAS AWASTHY, JM:
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.
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.
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.
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 side. 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.
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. Sd/- Sd/- (S RIFAUR RAHMAN) (VIKAS AWASTHY) लेखाकार सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER िद�ी/Delhi, �दनांक/Dated 20/11/2024 NV/- �ितिलिप अ�ेिषतCopy of the Order forwarded to : अपीलाथ�/The Appellant , 1. �ितवादी/ The Respondent. 2.