RAVI KUMAR RAWAT,JAIPUR vs. ACIT CC-2, JAIPUR

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ITA 257/JPR/2026Status: DisposedITAT Jaipur31 August 2026AY 2021-224 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found no valid reason to interfere with the CIT(A)'s order, which restricted the addition to 1% of the turnover. The assessee's challenge to this estimation was not substantiated.

What were the facts?

Following a search, the assessee's books of accounts were rejected, and an addition was made based on the previous year's GP rate. The CIT(A) upheld the rejection but reduced the addition by applying a 1% GP rate to the turnover.

What were the issues?

Whether the CIT(A) was justified in estimating the addition at 1% of the turnover after rejecting the assessee's books of accounts. Whether the initiation of penalty proceedings under Section 270A was valid.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “SMC” BENCH, JAIPUR

For Respondent: Ms. Aarti Rawat, JCIT
Hearing: 14.07.2026Pronounced: 31.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 257/JPR/2026 (Assessment Year:2021-22)

Ravi Kumar Rawat Vs. ACIT 14, Bhairav Path Central Circle 2 Jawaharlal Nehru Jaipur Jaipur �थायीलेखासं./जीआइआरसं./PAN/GIR No:AATPR 5739 A Appellant .. Respondent Appellant by : Sh. Vinod Gupta Respondent by : Ms. Aarti Rawat, JCIT Date of Hearing 14.07.2026 Date of Pronouncement 31.08.2026 O R D E R The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax Appeal, CIT(A), Jaipur 04 (hereinafter referred to as “Ld. CIT(A)”), dated 26.12.2025u/s 250 of the Income Tax Act, 1961, (hereinafter referred to as “the Act”).

2.

Brief facts relating to the case are that the assessee is an individual engaged in the business of trading of gemstones, diamond and jewellery.For the impugned year the assessee had filed return of

P a g e | 2 ITA No.257/JPR/2026 Ravi Kumar Rawat income declaring income of Rs.5,67,930/-.Thereafter search was conducted at the premises of MPR(Rawat) Group on 22.03.2022 of which the assessee’s also a Member, wherein trading addition of Rs.2,07,770/- was made, by rejecting the books of accounts of the assessee and applying a G.P. rate of 12.84% as declared in the immediately preceding year to the total turnover of the assessee of Rs.1,06,41,499/-, resulting in gross profit of Rs.13,66,368/- as against Rs.11,58,598/- declared by the assessee. Thus an addition of Rs.2,07,770/- was made to the income of the assessee which accordingly was assessed at Rs.7,71,810/- as opposed to Rs.5,76,930/- returned by the assessee. 3. Before the Ld. CIT(A) the assessee challenged the rejection of books of accounts as also the estimation of gross profit by applying the G.P. Rate of the preceding year. The Ld. CIT(A) upheld the rejection of books of accounts of the assessee, however, for the G.P rate adopted by the AO of immediately preceding year he found justification in the assessee’s plea that the G.P. rate adopted of the preceding year was not justified since it was the period of COVID 19 and the sales of the assessee had also fallen to Rs.1.06 crore as compared to Rs.2.82 crores of the preceding year. He accordingly, directed addition of 1% of the turnover to be made to the income of the assessee ,resulting in an addition of Rs.1,06,415/-.Accordingly addition made by the AO of Rs.2,07,770/- was restricted to Rs.1,06,415/- and assessee granted relief of Rs.1,01,355/- .

P a g e | 3 ITA No.257/JPR/2026 Ravi Kumar Rawat 4. Aggrieved by the same the assessee has come up in appeal and has raised following grounds before me:- 1. The Ld. CIT(A) has erred in law as well as on the facts of the case in confirming the action of Ld.AO of passing the order u/s 143(3) of the Income Tax Act, 1961. The very action of the Ld. AO and its confirmation is bad in law and without jurisdiction. Hence, the assessment order as well as the impugned order deserves to be quashed. 2. The Ld. CIT(A) has erred in restricting the trading addition to Rs. 1,06,415/-being 1 percent of total declared turnover of Rs. 1,06,41,499/-without appreciating the facts and circumstances of the case. The said action and resultant addition are excessive and deserves a complete deletion. 3. The Ld. CIT(A) has erred in law as well as on the facts of the case in confirming the action of Ld.AO in initiating penalty proceeding u/s 270A, the initiation so made is against the law and deserves to be deleted. 4. That the appellant craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.

5.

The primary challenge to the order of ld. CIT(A) before me, is against the application by the Ld. CIT(A) of 1% to the turnover of the assessee for the purposes of estimating the addition to be made to the income of the assessee. During the course of arguments before me, no valid reason could be given by the ld. Counsel for the assessee for holding the action of the Ld. CIT(A) to be unjustified on facts or even in law. The ld. Counsel for the assessee did not dispute the decision of the Ld. CIT(A) that the books of the accounts were liable to be rejected. Considering the same, it was but logical for the Revenue to estimate the profits earned by the assessee. The Ld. CIT(A) has estimated the net profit earned by the assessee by making an addition of 1% of the total turnover to the profit declared by the assessee. The ld. Counsel for

P a g e | 4 ITA No.257/JPR/2026 Ravi Kumar Rawat the assessee did not point out any other reasonable basis before me for the estimation of profits of the assessee. 6. In the light of the same, I see no reason to interfere in the order of Ld. CIT(A) restricting the addition made to the income of the assessee to the extent of Rs.1,01,355/-. 7. Grounds raised by the assessee are accordingly dismissed. 8. In effect, appeal of the assessee is dismissed. Order pronounced in the open court on 31.08.2026.

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 31.08.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur

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