ITAT estimates Cheque Discounter’s Taxable Income at 10% of Cash and Other Credit due to Possible Revenue Leakage

The ITAT ruled that cheque discounters’ taxable income should be estimated based on the cash and credit flow and due to possible revenue leakage. The tribunal acknowledged that cheque discounting involves certain risks, including potential tax evasion or underreporting of income, and thus, taxable income should be estimated based on both actual cash and credit entries. This decision sets a precedent for tax authorities to apply reasonable estimations when determining taxable income for cheque discounters.