DINESH KUMAR,GODDA vs. DCIT, CIRCLE-III, DEOGHAR
What did the Tribunal hold?
The Tribunal found merit in the assessee's plea that the CIT(A) erred in estimating profits when accounts were duly furnished. Due to the department's failure to provide a remand report and traceable case records, the additions made on estimation were deemed unsustainable.
What were the facts?
The assessee appealed against the CIT(A)'s order estimating net profit at 8% on gross receipts, higher than the 5.6% disclosed. The Assessing Officer had initially rejected the assessee's books and estimated profit at 10%.
What were the issues?
Whether the CIT(A) was justified in estimating net profit when the assessee had furnished audited accounts and the Assessing Officer failed to conduct proper verification or provide case records.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RANCHI
Before: Sri Sanjay Garg
order : April 30, 2021 ORDER The present appeal has been preferred by the assessee against the order dated 23.10.2019 of the Commissioner of Income Tax (Appeals), Dhanbad [hereinafter as ‘CIT(A)’]. The assessee in this appeal has taken the following grounds of appeal:
1. For that Ld. CIT(Appeals) erred in estimating net profit @8% on the gross receipts of Rs. 1,22,05,011/- from civil construction as against net profit of Rs.6,83,480/-@5.6% disclosed by the appellant. The appellant had filed duly Tax Audited accounts and the entire receipts and expenditures were fully verifiable. Ld. CIT(A) erred in not appreciating the past records of the appellant where lower rate of profit was duly accepted by the department. As such the addition made is unjustified and be deleted. In any view the estimate made is highly excessive.
2. For that Interest charged u/s 234B may be directed to be charged on tax payable on returned income, as per decision of Hon'ble Jharkhand High Court Dtd. 25th July, 2012, in Tax Appeal No.38 of 2010, in the case of Sri Ajay Prakash Vema vs. Income Tax officer, Range-1, Ward-1, Dhanbad reported in MANU/JH/2120/2012 and in 2013 (4) J.LJ.R. 389 (Jharkhand) and also the decisions of jurisdictional Hon'ble ITAT. 3. For that other grounds, if any, will be taken up, argued at the time of hearing.” 2. No one has put in appearance on behalf of the assessee. An application for adjournment has been filed by one of the brothers of the assessee, Shri Mukesh Kumar, stating that the assessee was in imprisonment, therefore, he could not put appearance before this Tribunal.
Assessment Year: 2008-09 Dinesh Kumar 3. After considering the grounds of appeal and material on record and hearing the ld. DR, I find that since a simple issue is involved in this appeal and the assessee has a fair case, therefore, this appeal can be disposed off after hearing the ld. DR.
4. Vide Ground No.1 of the appeal, the assessee has agitated against the action of the CIT(A) in estimating net profits of the assessee @8% of the gross receipts as against 5.6% declared by the assessee from its business of civil construction.
6. During the assessment proceedings, the Assessing Officer rejected the books of accounts of the assessee since the assessee failed to produce bills and vouchers before him. He, therefore, estimated the net profit of the assessee @10% of the gross receipts.
7. In appeal before the ld. CIT(A), the assessee pleaded that the books of accounts of the assessee were duly audited. The assessee produced the necessary details like books of accounts etc. before the ld. CIT(A) whereupon the remand report was called upon from the Assessing Officer. However, the Assessing Officer failed to conduct necessary verifications from the respective parties regarding the bills, vouchers etc. The ld. CIT(A) requisitioned the case from the Assessing Officer vide its letter 09.05.2016. Thereafter, a fresh letter calling for the case records was issued to the Assessing Officer but the Assessing Officer even failed to send the records to the ld. CIT(A) stating that the same were not traceable. The ld. CIT(A), therefore, did not consider the plea of the assessee that the accounts of the assessee were duly audited and there was no discrepancy in the same. However, he, giving some relief to the assessee, estimated the net profits @8% as against 10% estimated by the Assessing Officer.
8. The assessee, therefore, has come in appeal before this Tribunal pleading that there was no justification on the part of the ld. CIT(A) in estimating the profits when the accounts were duly furnished by the assessee and remand report was called upon by the ld. CIT(A) from the Assessing Officer. I find merit in the above plea of the assessee. The assessee has duly furnished his accounts, bills and vouchers whereupon the ld. CIT(A) has called for remand report from the Assessing Officer,however, the Assessing Officer failed to conduct necessary verifications 2
Assessment Year: 2008-09 Dinesh Kumar etc. from the parties and did not send any remand report. Even the Assessing Officer did not send the case records stating that the same were not traceable. Because of the lack on the part of the officials of the Department, the assessee cannot be punished. In view of this, the additions made on estimation basis in the case of the assessee, in my view, are not sustainable in the eyes of law. Therefore, the Assessing Officer is directed to assess the net profit as per the return of income furnished of the assessee.
In the result, the appeal of the assessee stands allowed.
More judgments on Section 234B
- Vikas Ashokkumar Masand, Ahmedabad vs The Dy. Commissioner of Income Tax…ITA 3130/AHD/2026[A.Y. 2017-18]Status: Disposed19 Oct 2026
- Shalin Jayantbhai Desai, Vadodara vs ACIT, Circle-4(2), Vadodara Present…ITA 2569/AHD/2026[2010-11]Status: Disposed19 Oct 2026AY 2010-11
- Sarvjeet Singh Through Legal Heir Manjit… vs ITO Ward 1(1), AlwarITA 355/JPR/2025[2013-14]Status: Disposed16 Oct 2026AY 2013-14
- Parthasaradhi Mutually Aided Co-Operative… vs Income-Tax Officer, Ward-17(1), HyderabadITA 2322/HYD/2026[AY 2016-17]Status: Disposed16 Oct 2026
- Cornerstone Ondemand International Limited… vs Assistant Commissioner of Income Tax…ITA 2128/MUM/2025[2022-23]Status: Disposed16 Oct 2026AY 2022-23
Recent GST High Court judgments
Search GST case law →- Sanjay Maheshwari vs. Union Of INDIA & Ors.Delhi · 14 Oct 2026
- Sanjay Maheshwari vs. Union Of INDIA & Ors.Delhi · 14 Oct 2026
- Iyyanan Eswaran vs. The Appellate Deputy Commissioner (St) (GST)Madras · 14 Oct 2026
- M/S Dc Security Services vs. Commissioner Of Central Goods And Services TaxUttarakhand · 14 Oct 2026
- M/S Shreekanth Enterprises vs. Joint Commissioner AppealsUttarakhand · 14 Oct 2026