ZUBAIR AHMAD BHAT,SRINAGAR vs. DCIT CENTRAL CIRCLE, SRINAGAR

PDF · subscribers
ITA 770/ASR/2025Status: DisposedITAT Amritsar30 July 2026AY 2015-164 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the assessee and a searched person were in the same business. Since the AO estimated net profit at 4% for the searched person, the Tribunal directed the AO to adopt the same rate for the assessee.

What were the facts?

During a search operation, documents related to the assessee were seized, leading to proceedings under section 153C. The assessee failed to furnish books of accounts and substantiate expenses. The AO estimated net profit at 8% of turnover, which was upheld by the CIT(A).

What were the issues?

Whether the estimation of net profit at 8% of turnover by the AO was justified, and if a lower rate applied based on comparable cases.

Which sections of the Income-tax Act were involved?

Section 132,Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: SHRI M. BALAGANESH AM, &

For Appellant: CA राज की ओर से/
Hearing: 29.07.2026Pronounced: 30.07.2026

आदेश/Order PER M. BALAGANESH, AM: These appeals have been preferred by the assessee against the separate orders, each dated 16.08.2025, passed by the learned Commissioner of Income Tax (Appeals)-5, Ludhiana [herein referred to as ‘ ld. CIT(A)’], for the captioned assessment years 2. Identical issue is involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.

2 769 to 774/Asr/2025 3. The only identical issue to be decided in these appeals is as to whether the Learned CIT(A) was justified in confirming the action of the Learned AO in estimating the net profit @ 8% of turnover in the facts and circumstances of the instant case.

4.

We have heard the rival submissions and perused the materials available on record. The assessee is engaged in the business of Cross LOC / local trade / resale of trading goods in the name of M/s Original M.S.Z. Traders, Proprietor Shri Zubair Ahmed Bhat, which is primarily engaged in the business of export of dry fruits and vegetables. A search and seizure operation under section 132 of the Act was carried out in the case of Showkat Ahmad Kuloo Group on 14-03-2019. During the course of search, certain documents were seized which were pertaining / relating to the assessee herein. Accordingly, proceedings under section 153C of the Act stood initiated on the assessee. Notice under section 153C of the Act was issued to the assessee herein on 18-09-2020 . In response, the assessee filed his return of income declaring total income of Rs 5,66,960 on 9-03-2021 for the assessment year 2014-15. The assessee during the course of assessment proceedings did not furnish the books of accounts and did not substantiate the various expenditures claimed by him in the profit and loss account. The learned AO had tabulated in page 4 of the assessment

3 769 to 774/Asr/2025 order the complete details of purchases, sales, cash deposits, other deposits, import details, export details, sales and purchases as per GST for assessment years 2013-14 to 2019-20. For want of the books of accounts and supporting evidences, the learned AO proceeded to determine the total income of the assessee by estimating the net profit at the rate of 8% of turnover. This action of the learned AO was upheld by the learned CITA. 5. Before us, the learned AR submitted that search had happened under section 132 of the Act in the case of Showkat Ahmad Kuloo who was also engaged in the same line of business of the assessee herein. The Learned AR also placed on record a copy of the search assessment order framed under section 153A of the Act dated 02-07- 2021 in the case of Showkat Ahmad Kuloo (searched person) for the Assessment Year 2014-15, wherein the net profit was estimated at the rate of 4% of turnover by the very same learned AO and he pleaded for the adoption of the very same percentage of net profit in the case of the assessee also. No serious objection was raised by the learned DR in this regard.

6.

Considering the fact that both the parties were engaged in the same business, we are inclined to agree to the contentions of the Learned AR and accordingly direct the Learned AO to determine the net profit at the rate of 4% of the turnover qua the assessee herein

4 769 to 774/Asr/2025 before us. Accordingly, the grounds raised by the assessee are partly allowed. 6. The decision rendered by us herein above for assessment year 2014-15 shall apply mutatis mutandis for other assessment years also except with variance in figures. 7. In the result, all the appeals of the assessee are partly allowed. Order pronounced in the open court on 30.07.2026 Sd/- Sd/- (U. DASGUPTA ) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 30.07.2026 rkk आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar

More judgments on Section 132

All 14,598 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →