CLASSIC LOGISTICS,HYDERABAD vs. INCOME TAX OFFICER, WARD-9(1), HYDERABAD

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ITA 1223/HYD/2019Status: DisposedITAT Hyderabad25 March 2021AY 2015-162 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the lower authorities did not consider the assessee's corresponding expenses before invoking Section 145(3). Therefore, the estimated profit rate was restricted from 11.0% to 8% on a lumpsum basis, with a rider that this would not be a precedent.

What were the facts?

The assessee's appeal for AY 2015-16 concerned the rejection of its books of accounts and the estimation of profit at 11.0% of turnover in its transport business. The assessee did not press the issue regarding the rejection of books of accounts.

What were the issues?

The correctness of estimating profit at 11.0% of turnover in the transport business without considering corresponding expenses, and the rejection of books of accounts.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 145(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘A-SMC’ BENCH : Hyderabad

Before: SHRI S.S. GODARA

Hearing: 23/03/2021Pronounced: 30/03/2021

Date of Hearing : 23/03/2021 Date of Pronouncement : 30/03/2021 O R D E R This assessee’s appeal for A.Y. 2015-16 arises against the Commissioner of Income Tax (Appeals) “[CIT(A)]” – 7, Hyderabad’s order dated 27.05.2019 passed in case no.031/2018-19, in proceedings u/s 143(3) of the Income Tax Act, 1961 [in short ‘the Act’].

Heard both the parties. Case file perused.

2.

Coming to the assessee’s former substantive grievance that leared lower authorities have erred in law and on facts in rejecting his books of accounts u/s 143(3), learned counsel is fair enough that the same be declined as not pressed. Ordered accordingly.

3 Coming to the assessee’s later issue of correctness of both the lower authorities action estimating the profit element @ 11.0% of turnover in M/s Classic Logistics, , Hyd. transport business, learned Departmental Representative vehemently contended that the Assessing Authority has rightly gone by the earlier book results. The fact also remains that neither the assessment order nor the lower appellate order takes into consideration the assessee’s corresponding expenses as well in all these assessment years before invoking sec145(3) of the Act. Faced with this situation, I deem it appropriate to restrict income estimation element taken as 11.0% to 8% on lumpsum basis with a rider that the same shall not be taken as a precedent in any other assessment year. It is made clear that the above estimated rate will be before depreciation claim only as assessed by the Assessing officer. Necessary computation to follow as per rules.

This assessee’s appeal is partly allowed for statistical purposes.

Order pronounced in Open Court on 30/03/2021.

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