Challenge Against AO's 8% Profit Margin Estimation on Aircel Recharge Coupon Sales: ITAT Remands Case [Read Order]
The assessee had argued that the profit margin of 1.75% was accepted in previous years, and no change in the business or margin had occurred.
![Challenge Against AOs 8% Profit Margin Estimation on Aircel Recharge Coupon Sales: ITAT Remands Case [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/12/Audit-Report-ITAT-Submission-of-Audit-Report-Ahmedabad-Bench-of-the-Income-Tax-Appellate-Tribunal-Income-Tax-Appellate-Tribunal-submission-of-the-audit-report-Assessing-Officer-Taxcan-1.jpg "Challenge Against AOs 8% Profit Margin Estimation on Aircel Recharge Coupon Sales: ITAT Remands Case [Read Order]")
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) remanded the case to the Assessing Officer (AO) after finding that the 8% profit margin estimate on Aircel recharge coupon sales was too high. Chandan Singh Rana,appellant-assessee, challenged the order dated 16.04.2024, for assessment year 2017-18 passed by Commissioner of Income Tax(Appeals)[CIT(A)]. In this case the...
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) remanded the case to the Assessing Officer (AO) after finding that the 8% profit margin estimate on Aircel recharge coupon sales was too high.
Chandan Singh Rana,appellant-assessee, challenged the order dated 16.04.2024, for assessment year 2017-18 passed by Commissioner of Income Tax(Appeals)[CIT(A)]. In this case the assessee counsel argued that the Assessing Officer (AO) wrongly added Rs. 22,89,114 as business income. The AO estimated the profit at 8% from Aircel recharge coupon sales, while in previous years, the profit margin was around 1.75%, which the Department had accepted.
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The counsel stated that the AO's 8% estimate was too high. The assessee appealed to the CIT(A), but the addition was upheld. The AO also added Rs. 2,22,376 under section 69A due to a difference between the amount deposited from sales and what was transferred to Aircel. The counsel wanted to submit documents showing the 1.75% margin was accepted in past years.
In response, the revenue counsel defended the order and asked for the assessee's appeal to be dismissed. He argued that the assessee had not provided enough proof to the lower authorities and should not be allowed to present new evidence at this stage.
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The two member bench comprising Vikas Awasthy (Judicial Member) and S Rifaur Rahman(Accountant Member) reviewed the case and noted that the nature of the business was not in dispute. The assessee argued that a 1.75% profit margin had been accepted in previous years, and there was no change in the business or margin in the current year. The assessee also claimed that the AO's estimate of 8% was too high and provided evidence from past years.
The appellate tribunal decided to send the case back to the AO for a fresh review, considering the new documents. The AO was asked to reassess the case and allow the assessee to submit more evidence.
In short the order was set aside and the appeal filed by the assessee was allowed.
To Read the full text of the Order CLICK HERE
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