THE GURU NANAK TRUCK OPERATOR UNION,SUNAM vs. ITO WARD,SUNAM, SANGRUR

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ITA 284/CHANDI/2020Status: DisposedITAT Chandigarh18 March 2021AY 2016-178 pages
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What did the Tribunal hold?

The Tribunal held that the net profit rate of 1.5% sustained by the CIT(A) was on the higher side, considering the assessee's past profit history. The Tribunal restricted the net profit rate to 1% of the gross receipts.

What were the facts?

The assessee, an Association of Persons (truck union), declared a lower income than its Form 26AS receipts. The Assessing Officer rejected its books of account and estimated income at 2% of gross receipts. The CIT(A) reduced this to 1.5%.

What were the issues?

Whether the rejection of books of account was justified and if the estimated net profit rate was reasonable considering the past history of the assessee.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 145(3),Section 250(6)

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justice, we partly allow the appeal of the assessee and modify the order passed by the Ld. CIT(A) and restrict the net profit rate to 1% of the gross receipts, which is more than the percentage in the last 3 years. We therefore, direct the Assessing Officer to compute the addition @ 1% of the gross receipts.

In the result, the appeal filed by the assessee is partly allowed.

Order pronounced on 18.03.2021.

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