In a recent case, the Chennai Bench of the Income Tax Appellate Tribunal (ITAT) relieved a ticket agent by lowering the income estimation to a 2% margin. The assessee made the appeal to the ITAT against an order passed by the Commisiioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC) regarding the returns filed in the assessment year (AY) 2016-17.
The assessee, Ananthanarayanan Rajasekaran, was a ticket booking agent. He deposited cash of ₹118.25 lakhs in his bank account during the year under consideration but failed to file the supporting documents. The assessing officer (AO) estimated the income at 10% and made an addition of ₹11.82 lakhs.
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Aggrieved by the order passed by the Assessment officer, the assessee moved the Commissioner of Income Tax (Appeals). The CIT(A), upon studying all materials available in this matter, upheld the AO’s order and confirmed it against the assessee.
In an appeal to the Income Tax Appellate Tribunal, the authorised representative of the assessee placed on record a profitability chart from 2013-14 AY to 2024-25 AY. The AR further submitted that the commission was received in a lump sum or per ticket basis, and the margins were very low. The department representative of the revenue opposed any interference in the income estimated.
After considering the submissions made by both sides, the ITAT observed that the assessee, being a ticket agent, would receive a commission per ticket and that its margins should be low. The ITAT, considering the return of income for the AYs 2013-12 to 2024-25, directed the AO to estimate income at 2% of the deposit of ₹118.25, which would be over and above the returned income as admitted by the assessee.
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The two-member bench consisting of Manu Kumar Giri, the judicial member and Manoj Kumar Aggarwal, the accountant member, partly allowed the assessee’s appeal and lowered the taxable income margin for the assessee.
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