Estimated cable subscription income addition deleted where verification of cable connections was not properly made.

Estimated cable subscription receipts based on third-party information and local inquiry were found unsustainable where the Assessing Officer did not properly verify the assessee's claim regarding the number of cable connections. The Tribunal noted that in a similar earlier year, the matter had been restored and the returned income was later accepted, and it followed a coordinate bench view that the addition rested only on estimation without contrary material from the Revenue. On that basis, the estimated addition was deleted and the assessee's challenge succeeded.

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Issues: Whether the addition made by estimating cable subscription receipts on the basis of third-party information and local inquiry, without proper verification of the assessee's claim, was sustainable.

Analysis: The dispute turned on the correctness of the estimated turnover and profit applied by the Assessing Officer. The Tribunal noted that in the assessee's own case for a similar year, the matter had earlier been restored and, upon fresh examination, the returned income was accepted. It also relied on the coordinate bench's finding that the addition had been made purely on estimation without verifying the correctness of the assessee's claim regarding the number of cable connections. On the same reasoning and in the absence of contrary material from the Revenue, the estimate adopted by the lower authorities was held to be unsustainable.

Conclusion: The addition of Rs. 1,20,06,010 made on estimate was deleted and the ground challenging the addition was allowed in favour of the assessee.

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