CHANDAN SINGH RANA,DELHI V. ITO,WARD-53(4), DELHI

ITA 2994/DEL/2024

AI Insights

The case involves Chandan Singh Rana, the appellant, who contested the order of the Commissioner of Income Tax (Appeals) regarding the assessment year 2017-18. The primary contention was the Assessing Officer's estimated addition of Rs.22,89,114 as business income, calculated at an 8% profit margin on gross receipts from the sale of Aircel recharge coupons, which was significantly higher than the 1.75% margin accepted in previous years. Additionally, an addition of Rs.2,22,376 was made under section 69A of the Income Tax Act, 1961, due to discrepancies between sales deposits and transfers to Aircel. The Tribunal found merit in the appellant's argument that the profit margin estimation was excessively high and directed a reassessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 298898 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 18-06-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK KUMAR UPADHYAY
• Assessee Lawyers: R.K YADAV
• Keywords: Set aside; Business income
• Section: 69A

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “बी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं ŵी एस įरफौर रहमान, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER आअसं.2994/िदʟी/2024 (िन.व. 2017-18) ITA No.2994/DEL/2024 (A.Y.2017-18) Chandan Singh Rana, 1819/202 Dhola Complex, Uday Chand Marg Kotla, South Extn. New Delhi 110003 PAN: AGKPR-8787-K ...... अपीलाथᱮ/Appellant बनाम Vs. Commissioner of Income Tax(Appeals), Ward 53(4), Delhi ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri R.K Yadav, Advocate ŮितवादीȪारा/Respondent by : Shri Vivek Kumar Upadhyay, CIT-DR सुनवाई कᳱ ितिथ/ Date of hearing : 20/11/2024 घोषणा कᳱ ि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. 2. 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 2 ITA No. 2994/DEL/2024 (AY 2017-18) 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. 3. 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. 4. 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 3 ITA No. 2994/DEL/2024 (AY 2017-18) 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. 5. 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 सद᭭य/ACCOUNTANT MEMBER ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 20/11/2024 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. 4 ITA No. 2994/DEL/2024 (AY 2017-18) BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "