9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 940 - AT - Income TaxEstimation of income from the business of plying of buses - Undisclosed income from deposits from specified bank notes - HELD THAT - A perusal of the Circular issued by the RBI on 08.11.2016 clearly shows that the public sector transport operators and government transport operators have been permitted to accept the specified bank notes as legal tender during the demonetisation period. The assessee admittedly is a contractor, who operates the government buses on contract. The assessee very much falls within the specified category which is an exempted category as per the Circular issued by the RBIOnce the assessee falls within the exempted category as provided by the RBI then the deposit of such specified bank notes by such exempted category persons cannot be treated as undisclosed income of such person. Addition as made by the AO and as confirmed by the ld. CIT(A) is unsustainable and we delete the same. Even otherwise, the turnover of the assessee is more than Rs.4.05 crores. The deposit of the specified bank notes is about 5% of the total turnover of the assessee. When the AO himself has estimated the income of the assessee at 2.25%, it would be farfetched even presumed that 5% of the assessee s turnover could be an undisclosed income of the assessee from the operation of the contracted Government buses. Appeal of the assessee is allowed.
Issues:
Appeal against order of CIT(A) regarding addition of specified bank notes deposited by assessee in bank account. Analysis: The appeal was filed by the assessee against the order of the ld. CIT(A) regarding the addition of specified bank notes deposited in the bank account. The assessee, engaged in plying Government buses on a contract basis, disclosed income from this activity. The Assessing Officer (AO) estimated the income and added an amount of Rs. 87,808 to the total income. Additionally, the AO added Rs. 8,23,000 representing specified bank notes deposited by the assessee. The assessee argued that the RBI circular dated 08.11.2016 permitted transport operators, like the assessee, to accept specified bank notes from passengers. These notes were given by passengers and should not be treated as undisclosed income. The assessee contended that the addition made by the AO in respect of specified bank notes should be deleted. The Senior DR supported the orders of the AO and CIT(A), stating that it was the assessee's responsibility to prove that the specified bank notes were obtained from passengers. The Senior DR also mentioned that the AO had allowed a benefit of Rs. 2,50,000 as an opening balance. The Senior DR prayed for upholding the addition made by the AO and confirmed by the CIT(A). Upon considering the submissions, the Tribunal referred to the RBI circular which permitted public sector and government transport operators to accept specified bank notes during demonetization. As the assessee operated government buses on contract, falling within the exempted category per the RBI circular, the deposit of specified bank notes by the assessee could not be treated as undisclosed income. The Tribunal noted that the deposit of specified bank notes was only about 5% of the total turnover, which was over Rs. 4.05 crores. Given that the AO estimated the income at 2.25%, it was deemed unreasonable to consider 5% of the turnover as undisclosed income from operating contracted Government buses. Consequently, the Tribunal found the addition unsustainable and deleted it. The appeal of the assessee was allowed. In conclusion, the Tribunal ruled in favor of the assessee, deleting the addition of specified bank notes deposited in the bank account, as the assessee fell within the exempted category permitted by the RBI circular, and the deposit amount was not indicative of undisclosed income based on the turnover percentage.
|
