RAJESH AGGARWAL,NEW DELHI vs. ACIT CIRCLE 49(1), NEW DELHI

None appeared for the Assessee and no application for adjournment has been filed, therefore, we deem it fit to decide the Appeal on hearing the Department's Representative and verifying the material available on record. 3. Brief facts of the case are that, assessment orders came to be passed u/s 147 r.w. Section 144 of the Act on 19/03/2022 in respect of Assessment Years 2016-17 and 2017-18 respectively by making certain additions. The said ex-pate Assessment orders have been called in question by the Assessee before the CIT(A) in two separate Appeals. The Ld. CIT(A) vide orders impugned dated 12/02/2024 and 13/02/2024 respectively, dismissed the Appeal of the Assessee. Aggrieved by the orders of the Ld. CIT(A), the Assessee preferred the present Appeals. As could be seen from the order sheet, the Assessee has been represented by an advocate initially. Thereafter neither the Assessee nor the representative of the Assessee appeared before us and remained absent. In this juncture, we observe that the Assessee who has not participated in the assessment proceedings, remained absent before the Ld. CIT(A) and also before the Tribunal despite service of notice.

We have heard the Department's Representative and perused the material available on record. The Assessee during the first appeal raised identical grounds of Appeal as the similar issues were involved in both the Assessment Years. The Ld. CIT(A) partly allowed the appeals. For the sake of convenience, the operative portion of the order of the Ld. CIT(A) for Assessment Year 2016-17 is reproduced as under:- “Decision:- 6. I have gone through the grounds of appeal, statement of facts and the assessment order and written submissions of the appellant. As seen from the assessment order, the appellant was issued notice u/s.148 of the Act on the basis of information with the AO that appellant was non-filer and had exported goods to the tune of Rs.3,22,48,034/-. Though notice was issued to the appellant u/s.148 of the Act, the appellant did not file any return and neither replied to 03 notices issued u/s.142(1) of the Act. On 11.02.2022, a show cause notice was issued asking the appellant as to why the ex-parte assessment should not be completed in his case. As the appellant did not file any reply, the AO completed the assessment u/s.144 r.w.s 147 of the Act assessing total income of Rs.3,22,48,034/-. Aggrieved by the said addition, the appellant is in appeal and has raised 15 grounds which are adjudicated as under:-

Ground no.1, 14 & 15 are general in nature and hence, not adjudicated.

Ground no.2 is challenging the juri iction invoked u/s.147 of the Act and completing the assessment u/s.144B of the Act. During the impugned AY the appellant had exported goods to the tune of Rs.3,22,48,034/-. In spite of that the appellant did not file any return of income on his own. Subsequently, when the AO received the information that the appellant had not filed the return even though had huge export turnover, the AO issued the notice u/s.148 of the Act after recording reasons to believe that appellant's income had escaped assessment as provided in section 147 of the Act. Thus, the notice issued is valid as the same is issued after recording reasons which are on the basis of credible information received from NMS data. Accordingly, the notice u/s.148 of the Act is upheld. As the appellant did not furnish the return and did not respond to the notices issued even the assessment completed u/s. 144 r.w.s 144B of the Act is also upheld. Ground no.2 is dismissed.

Ground no.3 to 8 are relating to the addition made by the AO treating the entire export proceeds of Rs.3,22,48,034/- as the income of the AO without considering the cost incurred and without giving proper opportunity of being heard. As seen from the assessment order, the AO has given sufficient opportunity of being heard to the appellant during the assessment proceedings. The same is evident on page 2 of the assessment order. The appellant has not availed the opportunities given by the AO for which AO Rajesh Agarwal Vs. ACIT cannot be found fault with. As regards not considering the cost of goods exported, the same is because of the failure of the appellant firstly to file the return and secondly for not responding to the notices issued u/s.148 and Section 142(1) of the Act and show cause notice.

1 During appellate proceedings, it was pleaded that due to lockdown, the appellant's premises were locked and electricity was also disconnected and due to water seepage the documents got spoiled. Appellant has not produced any evidences in support of his contention that his books and documents got spoiled due to water seepage. Considering for the moment that the incident was true, nothing prevented the appellant from getting the duplicate purchase bills from the suppliers to justify that he had incurred cost for exporting the goods. In absence of all these, appellant's request only to tax 1% of the turnover cannot be acceded to. However, considering the fact that the appellant would have incurred certain cost for exporting the goods, 8% of the turnover is treated as the net profit and 92% of the turnover is considered as direct or indirect cost which appellant would have incurred for exporting the goods. Thus, profit @ 8% of the turnover of Rs.3,22,48,034/- comes to Rs.25,79,843/-. Out of addition made by the AO of Rs.3,22,48,034/-, the addition of profit to the tune of Rs.25,79,843/- is sustained and appellant gets relief of Rs.2,96,68,191/-. Ground No.3 to 8 are treated to have been partly allowed.

Ground no.9 to 13 are relating to initiation of various penalties u/s.270A, 272A(1)(d) & 271F of the Act. All these grounds are premature for the reason that the penalties are merely initiated and not levied. Hence, Ground no.9 to 13 are dismissed being pre- mature.

In the result, the appeal is treated as partly allowed for statistical purpose.”

The Ld. CIT(A) has decided the Appeal on its merit, the Assessee has not appeared and made any submission to controvert the findings and the conclusion of the Ld. CIT(A). Thus, finding no merits in the Rajesh Agarwal Vs. ACIT