RAGHUREDDY PATHURI,BOLLARAM vs. INCOME TAX OFFICER, WARD-1, SANGAREDDY

PDF · subscribers
ITA 264/HYD/2020Status: DisposedITAT Hyderabad09 February 2021AY 2016-173 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found no reason to agree entirely with the assessee's contention for a lower estimation based on previous years. However, it noted that no comparables were drawn by the lower authorities. The Tribunal reduced the estimated profit to 3.5% but clarified this would not set a precedent.

What were the facts?

The assessee's appeal concerns the rejection of his books of accounts and an estimated profit of 5% on his liquor business for AY 2016-17. The lower authorities had made this estimation.

What were the issues?

The primary issue was whether the rejection of the assessee's books of accounts and the subsequent estimation of profits by the lower authorities were justified. The secondary issue was the appropriate rate of profit estimation.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “SMC”, HYDERABAD

Before: SHRI S.S.GODARA

O R D E R This assessee’s appeal for AY.2016-17 arises from the CIT(A)-2, Hyderabad’s order dated 19-11-2019 passed in appeal No.10038/2019-20/CIT(A)-2, in proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

It transpires at the outset that the assessee’s sole substantive grievance raised herein seeks to reverse both the lower authorities’ action rejecting his books of accounts, thereby estimating profits @5% in liquor business.

3.

Learned counsel vehemently contended that this tribunal’s co-ordinate bench’s order in assessee’s case(s) itself in earlier assessment years in & 472/Hyd/2018 estimate similar profits to 3% only. I find no reason to express my agreement with the assessee’s foregoing contentions in entirety. It is made clear that estimation of profits in the course of any business is purely a factual issue carrying no precedent value. The fact also remains that neither the Assessing Officer nor the CIT(A) have drawn any comparables before arriving at assessee’s profit estimation @5%. I deem it in the above facts and circumstances that the above estimation of income @3.5% would be just and proper with a rider that the same shall not be treated as a precedent.

4.

This appeal of assessee is partly allowed in foregoing terms.

Order pronounced in the open court on 22nd February, 2021

Recent GST High Court judgments

Search GST case law →