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Cash found in business premises as unaccounted income — Treated as receipts towards business auxiliary service as no other activity except for sale of sim cards and recharge coupons of mobile phone service provider was undertaken by the respondent — Evidence not sufficient — Appeal dismissed.
Facts:
The respondents were in the business of selling sim cards, recharge coupons, mobile phones, etc. On 17-10-2003, they declared unaccounted income, to the Income-tax Officers on survey, of Rs.4,00,000. Since the respondents were engaged in providing business auxiliary services, the unaccounted income was treated to be income from business auxiliary services.
The respondents contended that the entire income of Rs.4,00,000 cannot be attributed to business auxiliary service since the service had become taxable from 1-7-2003, whereas the visit of survey team was on 17-10-2003. Moreover, for generating income of Rs.4,00,000 during the period of three months, a turnover of Rs.2,50,00,000 would be required, which is practically not possible for a small business man. Apart from this, no inquiry was made with the respondent for ascertaining the source of unaccounted income. In absence of any evidence, the income cannot be attributed to taxable services provided by them.
Held:
Since no inquiry was undertaken by the Department as to whether the respondent’s turnover during the period of three months was to the tune of Rs.2,50,00,000 plus the evidence gathered by the Department was insufficient to establish even the prevalence of probability, the Revenue’s appeal was dismissed.
