SAHEB JAAN,BALLIA vs. INCOME TAX OFFICER, WARD - 2(5), BALLIA

The assessee has filed this appeal challenging the order dated 18.01.2018 passed by Ld CIT(A), Varanasi and it relates to the assessment year 2009-10.

The assessee is aggrieved by the decision of the ld. CIT(A) in confirming the addition of Rs.6,56,420/- due to increase in the gross profit rate.

None appeared on behalf of the assessee. Hence, we proceed to dispose of the appeal ex parte without the presence of the assessee. The assessment of the year under consideration was reopened u/s 148 of the Act on noticing that the assessee has deposited a sum of Rs.93,66,272/- in his bank account during the year under consideration. In the reopened assessment, the AO has noticed that the assessee is a wholesaler of fruits and vegetables and he has declared total turnover of Rs.99.52 lakhs and gross profit of Rs.3.38 lakhs. Thus, above-said gross profit works out to Rs.3.40%. The assessee was asked to produce bills and vouchers relating to purchases & sales and expenses. However, the assessee did not produce them. Accordingly, the AO estimated gross profit @ 10% which worked out to Rs.9,95,201/-. Accordingly, the AO added the difference of Rs.6,56,420/- to the total income of the assessee.

Before the ld.CIT(A), the assessee did not press this ground and, hence, the ld.CIT(A) sustained the addition. However, the assessee has filed this appeal challenging the said decision of ld.CIT(A).

As noticed earlier, the assessee did not appear before us. In the grounds of appeal, the assessee has submitted that the average rate of profit in fruits business works out to 5% only and, accordingly, prayed that the gross profit should be estimated @ 5%. However, we noticed earlier that the assessee did not press this ground before the ld.CIT(A) and, hence, the ld.CIT(A) did not have occasion to examine the above-said claim of the assessee. Accordingly, we are of the view that in the interest of justice, the assessee should be provided one more opportunity to press his case before the ld.CIT(A). The Ld D.R submitted that the assessee cannot agitate the additions which have been agreed to. However, we are of the view that if the assessee discovers any new facts to support his case, then it can be agitated. Accordingly, we set aside the order passed by the ld.CIT(A) and restore this issue to the file of the ld.CIT(A) for examining it afresh. After affording 2 adequate opportunity of being heard to the assessee, the ld.CIT(A) may take appropriate decision in accordance with the law.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.