SHIVAM BUILDERS PRIVATE LIMITED,AHMEDABAD vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), AHMEDABAD, AHMEDABAD

The Assessee has raised the following grounds of Appeal:- 1. The order passed by the Ld. CIT (A) is against law, equity & justice.

The relevant facts in brief are that the Assessee, a resident company, filed a return of income for the Assessment Year 2018- 2019 on 31/10/2018 declaring loss of INR.75,19,5052/-. The case of the Assessee was selected for scrutiny. During the assessment proceedings the Assessee furnished revised computation of income on 30/01/2021 providing the following explanation:

During the assessment proceedings the Assessing Officer examined the original return of income filed by the Assessee, the revised computation of income filed by the Assessee and the disclosures made in the financial statement and, thereafter, concluded that there were discrepancies in the books of account maintained by the Assessee. The Assessing Officer rejected the books of account of the Assessee for the relevant previous year and estimated net-profits of the Assessee at 10% of turnover. Thus, the Assessing Officer estimated the income of the Assessee at INR.11,85,006/-. The Assessing Officer also made an addition of INR.89,13,635/- in respect of interest income which according to the Assessing Officer was claimed by the Assessee to be exempted from tax. Further, the Assessing Officer also made an addition of INR.6,61,500/- under head income from house property, and an addition of INR.1,21,517/- under the head capital gains. Thus, the Assessing Officer assessed the income of the Assessee at INR.1,08,81,658/- vide Assessment Order, dated 01/03/2021, passed under section

Being aggrieved the Assessee filed appeal before the Learned CIT(A), inter alia, challenging the rejection of books of accounts, and addition of INR.11,85,006/- made by the Assessing Officer estimating profits at the rate of 10% of turnover. The aforesaid appeal was disposed by the Learned CIT(A) as partly allowed vide Order, dated 07/11/2025. The Learned CIT(A) declined to grant any relief to the Assessee on the aforesaid issue.

Being aggrieved the Assessee has preferred the present appeal before this Tribunal on the grounds reproduced in paragraph 2 above.

We have heard both the sides and have perused the material on record.

Learned Authorized Representative for the Assessee vehemently contended that the Assessing Officer failed to appreciate the correct facts and had rejected the books of accounts of the Assessee without considering the explanation offered by the Assessee. As the books of account of the Assessee were rejected substantial, the loss claimed by the Assessee was not allowed. The Assessing Officer estimated income of the Assessee at the rate of 10% turnover. The conclusion reached by the Assessing Officer was completely contrary to the state of affair of the Assessee prevailing during the relevant previous year.

Per contract, Learning Departmental Representative submitted that the Assessee had failed to produce relevant documents/details before the Assessing Officer as well as the First Appellate Authority. Therefore, there was no infirmity in the order passed by the Learned CIT(A).

We have considered the rival submissions and have perused the

We find that Learned CIT(A) has recorded that the Assessee has voluntarily revised the computation of income during the assessment proceedings. We note part of the additions made by the Assessing Officer were not challenged by the Assessing Officer before the Learned CIT(A) since the same were in line with the revised computation of income furnished by the Assessee during the assessment proceedings. . As regards rejection of books of accounts, estimation of income and disallowance of net loss, the Assessee had taken a stand that there was no discrepancy in the books of accounts and that the revised computation was filed to correct the bonafide mistake in the classification, disclosure and the computation of income. We note that both the Assessing Officer and the Learned CIT(A) had rejected the aforesaid contention of the Assessee recording that the Assessee had failed to furnish the supporting documents/details. Given the aforesaid, we are of the view that interest of justice would be served in case issue of rejection of books of accounts and consequent issue of estimation of income and disallowance of loss claimed are restored back to the file of Assessing Officer for de-novo adjudication with the directions to the Assessee to place before the Assessing Officer relevant documents/details to establish that proper books of account were maintained by the Assessee and the same reflected the correct state of affairs. Accordingly, we overturn the order passed by the Learned CIT(A) to this extent and set-aside Assessment Order to the extent of rejection books of account, estimation of business income at the rate of 10% and denial of business loss (as claimed by the Assessee in the revised computation of income). The aforesaid issues are restored back to the file of the Assessing Officer for de-novo adjudication. It is clarified that the Assessing Officer would be at liberty to carry out such enquiry/verification as the Assessing Officer may deem fit. The Assessee would be granted reasonable

In terms of the above Ground No. 2 to 4 raised by the Assessee are allowed for statistical purposes, while Ground No.1 is dismissed.

In result, the appeal preferred by the Assessee is partly allowed.