2022 (11) TMI 940 - AT - Income Tax
Estimation 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.