KRISHNA KRISHNA JEWELLERS PVT LTD,PANIPAT vs. INCOME TAX OFFICER WARD-1 PANIPAT, HARYANA

Grounds of appeal filed by the assessee, are as under: 1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) [CIT(A)-3 Gurgaon] is bad both in the eyes of law as well as on the facts of the case. 2. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the assessment proceedings in gross violation of principle of natural justice and without providing sufficient opportunity to the assessee to present its case. (ii) That the CIT(A) has erred both on facts and in law in confirming the addition without remanding back the case of the assessee as the assessee had submitted additional evidences under Rule 46A of the Income Tax Rules, 1962. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the total income of the assessee at Rs. 9,35,60,610/- as against the returned income of Rs. 9,24,44,160/-. 4. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the rejection of the books of accounts of the assessee despite the same having kept as per law. (ii) That the learned CIT(A) has erred both on facts and in law in confirming the rejection of books of account of the assessee without pointing out any specific defect or discrepancy therein, despite the same having been duly produced during the course of assessment proceedings. 5. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition made by the Ld. AO of Rs. 11,16,450/- by estimating the net profit at 0.93% on the basis of net profit of the previous financial year as against the net profit of 0.35% declared for the year under consideration.” 3. Brief facts of the case are that the assessment in the case of the assessee was completed by the AO u/s 143(3) of the Income-tax Act, 1961, vide order dated 31.12.2018, wherein the AO made the addition amounting to Rs. 11,16,450/- on account of reduction in the net profit rate from 0.93% as declared in the preceding year and the net profit rate of 0.35% in the year under consideration. On appeal, the same was confirmed by the CIT(A). Page 2 of 5

At the outset, the ld counsel of the assessee stated that the AO has incorrectly taken the net profit rate at 0.35% for the year under consideration while the actual net profit declared during the year under consideration was 46.99%. To verify the same, the ld AR furnished the tax audit report at Page 11 of the paper book and drew our attention to the clause 40 of the audit report. 5. Per contra, the ld DR relied on the order of AO/CIT(A). 6. We have heard the rival submissions and perused the materials on record. We have examined the Audit report wherein at clause 40, on a turnover of Rs 19.29 crore, the assessee has earned a net profit of 46.99%. We therefore are in agreement with the assessee that the AO has wrongly taken the rate of 0.35% instead of 46.99% as declared in the tax audit report and that the financial result of the assessee shows substantial increase in profitability instead of showing any decline. We therefore hold that the comparison made by the AO is factually and fundamentally incorrect and accordingly the addition made is deleted. The appeal is allowed in aforesaid terms. 7. In the result, the appeal in ITA 3408/Del/2026 is allowed. Order pronounced in open court on 30.07.2026. Sd/- Sd/- [SATBEER SINGH GODARA] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 13.08.2026 Page 3 of 5 Priti Yadav, Sr. PS* Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi