2023 (7) TMI 798 - AT - Income Tax

Income estimation - Case selected under CASS - income estimated @8% of the cash deposits / credits in the bank account - HELD THAT - Assessee had taken sub contract from Smt.Veera Veni Nainala till the date of execution of sale i.e. 19.04.2016 in favour of the assessee. We also find that the assessee had deposited the amount collected in his bank account for rendering various services viz. electricity bills, telephone bills, water bills and other revenue services, which in turn was transferred by way of RTGS to Govt. of Andhra Pradesh for which he derived commission. Revenue could not controvert the fact that the amount collected and deposited in his bank account was not his income, but it was the amount collected for various services rendered and for depositing into the account of Govt. of Andhra Pradesh. We find force in the argument of the Ld.AR therefore set aside the order passed by the Ld.CIT(A) and allow the appeal of the assessee.

Summary

Issues involved:
The appeal against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi regarding an assessment order u/s 271 of the Income Tax Act, 1961 for the Assessment Year (A.Y.) 2017-18.

Details of the Judgment:

1. Ownership of USDP VZLS Mee Seva:
The assessee, an individual, owned USDP-VZLS Mee Seva, collecting payments for various services. The Assessing Officer (AO) estimated income based on cash deposits, questioning ownership due to ambiguity. The CIT(A) upheld this decision.

2. Appeal before the Tribunal:
The assessee appealed to the Tribunal against the addition of Rs. 10,07,752 made by the AO. The Ld.AR argued that the ownership was clear based on documents submitted, while the Ld.DR supported the AO's decision.

3. Tribunal's Decision:
After reviewing the evidence, including certificates and sale letters, the Tribunal found that the assessee had acquired ownership of USDP VZLS Mee Seva. The deposits in the bank account were for services rendered, not income. The Tribunal set aside the CIT(A)'s order and allowed the appeal.

4. Conclusion:
The Tribunal allowed the appeal of the assessee, emphasizing the ownership of USDP VZLS Mee Seva and clarifying that the deposits were for services rendered, not income.