ACIT CIRCLE-14(1), NEW DELHI vs. KAPSONS ENGINEERS PVT LTD, GURGAON

This appeal by the Revenue is preferred against the order of the ld. CIT(A) - 5, New Delhi dated 17.09.2019 pertaining to Assessment Year 2016-17.

The solitary grievance of the Revenue is that the ld. CIT(A) has erred in deleting the addition of Rs. 4,33,56,825/-.

Briefly stated, the facts of the case are that the assessee filed his return of income electronically on 31.03.2017 declaring total income amounting to Rs. 74,29,920/-. Return was selected for scrutiny assessment through CASS and, accordingly, statutory notices were issued and served upon the assessee.

The Assessing Officer issued several notices, which remained uncomplied with by the assessee, and as the assessment was getting time barred, the Assessing Officer was left with no choice but to proceed with the assessment. The Assessing Officer had raised specific queries relating to the business and profit and asked the assessee to produce books of account for verification.

On receiving no plausible reply, the Assessing Officer estimated the profit and made addition of Rs. 4,33,56,825/-.

The assessee carried the matter before the ld. CIT(A) and vehemently objected to the estimation of the Assessing Officer.

Before the ld. CIT(A), the assessee furnished its past financial statements and pointed out that in the year under consideration, the assessee has shown better profit than the previous F.Ys. The ld. CIT(A) found the contention of the assessee to be correct and deleted the entire addition of Rs. 4,33,56,825/-.

Before us, the ld. DR vehemently stated that because of the non cooperation of the assessee, the Assessing Officer had estimated the profit and without considering the facts of the case, the ld. CIT(A) has deleted the entire addition.

The ld. counsel for the assessee reiterated what has been stated before the lower authorities. It is the say of the ld. counsel for the assessee that since the profit during the year under consideration is better than what is shown in the earlier F.Ys, the ld. CIT(A) has rightly deleted the impugned addition.

We have given thoughtful consideration to the orders of the authorities below. The undisputed fact is that the assessee did not cooperate during the assessment proceedings inspite of several opportunities.

Before us, it has been stated that the counsel who was entrusted with the assessment records did not reply to the queries of the Assessing Officer. In our considered view, this is a safe route to put the entire blame on the counsel without any demonstrative evidence.

Without these facts, strong reliance cannot be placed on the financial results of the earlier years. At the same time, a reasonable estimate of profit cannot be ruled out. The Assessing Officer has made addition of Rs. 4.33 crores which is obviously on the higher side. But deletion of the entire addition is also uncalled for.

We, therefore, are of the considered view that in the interest of justice and fair play, and considering the non co-operative attitude of the assessee, addition of Rs. 50 lakhs should meet the ends of justice.

In the result, the appeal of the Revenue in is partly allowed.