KALPATRU AGENCIES vs. ADDITONAL COMMISSIONER OF INCOME TAX RANGE-1,

ITA 121/JAB/2014Status: DisposedITAT Jabalpur12 November 2020AY 2008-093 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that profit cannot be estimated if the books of account are not rejected. Since the AO accepted the books and no defects were found, the CIT(A) was not justified in rejecting the book results and making an addition.

What were the facts?

The assessee declared profit as per its books of account. The AO estimated profit at 0.5% without rejecting the books. The CIT(A) increased the gross profit by 0.1% after finding the AO's reasoning technically unsound but observing an increase in purchase price.

What were the issues?

Whether the Assessing Officer or CIT(A) can estimate profit when the books of account are not rejected and no defects are found therein.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JABALPUR “SMC” BENCH, JABALPUR

Before: SHRI NRS GANESAN

For Appellant: Shri Dhiraj Ghai, CA
For Respondent: Shri I B Khandel, DR
Hearing: 13/11/2020Pronounced: 13/11/2020

Per NRS Ganesan, JM:

1.

This appeal of the assessee is directed against the order of CIT(A)-1, Jabalpur dated 10.3.2014 and pertains to AY 2008-09. 2. Shri Dheeraj Ghai, ld. Representative for the assessee submitted that the only issue that arises for consideration is estimation of gross profit. According to ld. Representative for the assessee, the assessee has declared profit as per the books of account maintained in the regular course of business. However, the AO, without rejecting the books of account, estimated the profit at 0.5%. On appeal by the assessee, the CIT(A) found that the reason for

The order continues below.

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