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Betting is unlawful however there’s nothing unsuitable in including the earnings from it to the whole enterprise revenue of a person for revenue tax function, a tribunal has dominated.
“We’re of the view that the estimate made by the Assessing Officer of the assessee’s revenue at 1 per cent of the whole transactions of cricket betting, as discovered recorded within the laptops seized from the possession of the assessee, is kind of truthful and affordable,” a bench on the Revenue Tax Appellate Tribunal (ITAT), Ahmedabad, stated in a latest order.
Primarily based on a tip-off relating to cricket betting, police had raided the assessee’s home. Money of about ₹43.88 lakh, some incriminating paperwork, and articles reminiscent of laptops, mobiles, TV had been seized. The Revenue Tax Division investigated and the assessee claimed that the money was fee revenue earned from actual property enterprise.
Requested about transactions of over ₹33 crore and ₹111 crore associated to evaluation 12 months 2011-12 and 2012-13, respectively, that had been recorded in his laptop computer, the assessee admitted in writing that he was concerned in cricket betting brokerage. It was defined that in a match the client shares their offers over cellphone, which is entered into computer systems. The match could also be for in the future or three days or seven days and so forth. On the day the match ends, the client pays if there’s a loss and receives cost if there’s a revenue. “As per our expertise, 100 per cent folks take their income however 75-90 per cent folks pay their losses. That is settled in money instantly, for which no data had been maintained,” it was stated.
The assessing officer (AO), nevertheless, rejected the reason. “Contemplating the truth that the transactions contain revenue in addition to loss and in addition contemplating the truth that among the purchasers don’t flip off for cost of their losses, the revenue is estimated @ 1 per cent of the transactions, which works out to ₹33,09,019 for the AY 2011-12 and .₹1,11,18,493 for the AY 2012-13, in respect of enterprise of cricket betting. The identical is added to the whole revenue of the assessee,” the AO stated in his order. This was later confirmed by the primary stage of attraction after which upheld by ITAT.
Money restrict
Om Rajpurohit, Director (Company and Worldwide Tax), AMRG & Associates, says that as a result of unlawful nature of companies reminiscent of betting or hawala, the reason for seized money or such transactions is extraordinarily tough to explain as a result of there’s all the time an absence of correct supporting paperwork and justification for the transactions path.”
Notably, even within the Finance Act of 2017, strict measures had been launched to curb black cash and money transactions, together with the addition of a brand new Part 269ST to the Revenue Tax Act, which states that nobody can obtain ₹2 lakh or extra in money in a single transaction in a day (topic to sure exceptions). Part 271DA was additionally launched, which imposes a penalty equal to the money acquired, whatever the nature of the receipt. “In consequence, now even when your online business is respectable, money transactions of ₹2 lakh or extra are not permitted, and can appeal to a heavy penalty regardless of correct supporting documentation,” he stated.
Revealed on
July 12, 2022
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