2015 (9) TMI 1521 - AT - Income Tax

Estimating the income from genuine transport charges at 5% - bifurcation of receipts pertaining to accommodation bills - Held that - We notice that the receipts pertaining to genuine transport business was ₹ 14.47 lakhs out of which income was estimated at 5% thereof amounting to ₹ 72,355/-. The plea of the assessee is that the income should be estimated at 0.5% on the above said amount of ₹ 14.47 lakhs also. In support of this contention, the assessee has placed reliance on the affidavit filed by the assessee. With regard to the receipts pertaining to accommodation bills, the assessee seems to have proved the same by showing his bank account wherein the cheque received from the parties have been immediately withdrawn by way of cash. The explanation of the assessee was that the cheques received from the parties were deposited into the bank accounts and the cash was immediately withdrawn thereafter and handed over to the parties. If the assessee is able to demonstrate that the very same modality was followed in respect of ₹ 14.47 lakhs also, then the assessee s claim for estimating income at 0.5% plus TDS amount can be admitted. However, this fact requires verification at the end of the AO. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine the bank accounts and other explanations furnished by the assessee and take appropriate decision in accordance with the law. - Decided in favour of assessee for statistical purposes

Summary

Issues:
1. Estimation of income from genuine transport charges at 5%.
2. Consideration of affidavit filed by the assessee.
3. Verification of receipts pertaining to accommodation bills.

Analysis:
Issue 1: The Assessing Officer (AO) estimated income from genuine transport charges at 5% and allowed a deduction, resulting in a total income determination. The assessee challenged this estimation before the Ld CIT(A), claiming that the entire receipts consisted of accommodation bills only. The Ld CIT(A) did not consider the affidavit filed by the assessee and upheld the assessment order. The Appellate Tribunal noted the plea of the assessee to estimate income at 0.5% on the total amount of genuine transport receipts. The Tribunal directed the AO to re-examine the issue, considering the affidavit and explanations provided by the assessee.

Issue 2: The assessee contended that the tax authorities should have estimated income at 0.5% on the entire receipts based on the affidavit filed. The Tribunal observed that the assessee demonstrated the receipts related to accommodation bills by showing bank transactions where cheques were deposited and cash withdrawn immediately. The Tribunal emphasized the need for verification by the AO regarding the modality followed for the entire amount in question. The Tribunal set aside the Ld CIT(A)'s order on this issue and instructed the AO to review the bank accounts and explanations provided by the assessee.

Issue 3: The Tribunal, after considering the contentions and evidence presented by the assessee, allowed the appeal for statistical purposes. The decision was made on September 23, 2015, by the Appellate Tribunal ITAT Mumbai, comprising B. R. Baskaran (Accountant Member) and Lalit Kumar (Judicial Member), with legal representation for both parties.

This judgment highlights the importance of thorough examination and verification of evidence in income estimation cases, emphasizing the need for tax authorities to consider all relevant documentation and explanations provided by the assessee before making final determinations.