ATULKUMAR VINUBHAI THAKKAR,SABARKANTHA V. THE ITO, WARD-3, HIMATNAGAR, SABARKANTHA

ITA 2009/AHD/2024

AI Insights

The case involves Atulkumar Vinubhai Thakkar, the proprietor of Maruti Telecom, who appealed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC) for the Assessment Year 2017-18. The primary contention was regarding the assessment of business income, where the CIT(A) had confirmed an addition to the business income and directed the computation of the same at 8% of total deposits in the bank account, resulting in a total income assessment of Rs. 20,13,850 as opposed to Rs. 3,55,560 returned by the appellant. The Assessee argued that the estimation of income at 8% was unjustified and harsh, given the nature of his business, which involved a net income of commission not exceeding 3 to 4%. The Tribunal, after hearing the arguments, found the assessment of 3% as the net profit on the receipts to be reasonable and justifiable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473699 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUDHAKAR VERMA
• Assessee Lawyers: D.K PARIKH
• Keywords: Business income

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.TA. No.2009/Ahd/2024 (Assessment Year: 2017-18) Atulkumar Vinubhai Thakkar, Prop: Maruti Telecom Gambhai, Post: Gambho Himatnagar, Sabarkantha-383030. Vs. Income Tax Officer, Ward-3, Himatnagar. [PAN No.AFWPP5467P] (Appellant) .. (Respondent) Appellant by : Shri D.K Parikh AR Respondent by: Shri Sudhakar Verma, Sr.DR Date of Hearing 10.03.2025 Date of Pronouncement 12.03.2025 O R D E R PER: DR. BRR KUMAR, VICE PRESIDENT: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Appeal Centre vide order dated 30.09.2024 passed for the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal 1. The learned CIT(Appeals) / NATIONAL FACELESS APPEAL CENTRE | NFAC] has grievously erred both in law and on facts in PARTLY confirming the addition of business income and directing to compute the same at 8% of total deposits in bank account and thereby directing ITA No. 2009/Ahd/2024 Asst.Year –2017-18 - 2– to assess total income at Rs. 20,13,850/- as against Rs. 3,55,560/- returned by appellant as per accounts. The addition due to retaining the amount as above is unjustified and deserves to be deleted. It be deleted now. 2. The Id CIT(Appeals) / [NFAC) further erred in law and on facts in not appreciating that looking to the submissions made to the Id AO and also as per the nature of business of appellant as retailer in sale of mobile recharge coupons noted by AO, the net income of commission is not exceeding 3 to 4% and hence the estimation of income at 8% and that too of the total deposits in bank account is wholly unjustified and very harsh. It be so held now. 3. The Id CIT(Appeals)/NFAC further erred in law and on facts in not appreciating that the appellant had furnished to the Id AO, the details of cash deposited for earlier Financial Year and the financial year relevant to assessment year under appeal with details of commission which showed that net income could not exceed about on average 3% maximum. The addition therefore retained by Id CIT(appeal) /NFAC deserves to be deleted and returned income be directed to be accepted. It be so held now. 4. Both the lower authorities erred in not appreciating that there was no question of rejecting books of account and considering net capital and balance sheet, income assessed and addition retained is untenable both on facts and in law. It be so held now and income returned be directed to be accepted in to to or alternatively. reduced. 5. The appellant craves leave to add, alter, modify or delete any of the grounds at the time of hearing. 3. The assessee has not complied before the Assessing Officer. The case of the assessee was selected for scrutiny assessment to verify the large cash deposit. The Assessing Officer has brought an amount of Rs.46,25,729/- being 20% of the turnover of the “business income ” of the assessee. The Ld. CIT(A) determined the profit @ 8%. We find that the assessee is dealing with recharge coupons of mobile service providers and has sold the recharge coupons in cash. Keeping in view the realities of the business of the profit allowed by the principal ITA No. 2009/Ahd/2024 Asst.Year –2017-18 - 3– service provider, the Ld.AR submitted that 3% as the net profit on the receipt can be considered as justifiable, which after hearing the argument of the revenue authorities, we find it as reasonable. 4. In the result, the appeal filed by the Assessee is partly allowed. This Order pronounced in Open Court on 12.03.2025 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. BRR KUMAR) JUDICIAL MEMBER VICE PRESIDENT (True Copy) Ahmedabad; Dated 12.03.2025 Manish, Sr. PS TRUE COPY आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "