RAMDAS MARUTI YEWALE,KEDARI BLDG vs. ITO PUNE , WARD

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ITA 2608/PUN/2025Status: DisposedITAT Pune20 May 2026AY 2019-20204 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the net profit rate should be estimated based on the past trend. Applying a net profit rate of 5.75% was deemed appropriate to fairly estimate the business income.

What were the facts?

The assessee could not get books of accounts audited and file the return of income for AY 2019-20 due to COVID-19. The Assessing Officer estimated net profit at 8% on contract receipts, whereas the assessee's past net profit rate was between 5% to 5.5%.

What were the issues?

The primary issue was the estimation of net profit rate by the Assessing Officer, deviating from the assessee's consistent past profit margins.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE

Before: DR. MANISH BORAD & SHRI PAVAN KUMAR GADALE

For Appellant: Shri Pankaj G. Shah &, Shri Soumya Bumb
For Respondent: Shri Vinod Pawar
Hearing: 29.04.2026Pronounced: 20.05.2026

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeal at the instance of assessee pertaining to A.Y. 2019-20 is against the order dated 05.09.2025 framed by National Faceless Appeal Centre, Delhi passed u/s.250 of the Income Tax Act, 1961 arising out of Assessment order dated 20.11.2023 passed u/s.147 r.w.s.144 r.w.s.144B of the Act.

2 The grievance of the assessee is against the estimation of higher net profit from contract receipts as against the consistent net profit rate offered by the assessee in the past and subsequent period and the specific grounds have been raised against the 2 Ramdas Maruti Yewale

addition of Rs.94,79,890/- made by the Assessing Officer estimating the business of the assessee.

3.

At the outset, ld. Counsel for the assessee submitted that the assessee could not get books of accounts audited for the year under consideration and not filed return of income for A.Y. 2019- 20 mainly on account of covid-19 pandemic restrictions. He submitted that the turnover of the assessee during the year is Rs.11.85 crore which has been adopted by the Assessing Officer and not disputed by the assessee. However, in the assessment proceedings for A.Y. 2019-20, ld. Assessing Officer has estimated net profit @8% even when in the preceding four years the net profit rate of the assessee is ranging from 5 to 5.5%. Ld. Counsel for the assessee only prayed that the net profit of the assessee may please be estimated as per the past trend of Net Profit rate @5 to 5.5% and not 8% estimated by the Assessing Officer and confirmed by ld.CIT(A).

4.

On the other hand, ld. DR supported the order of ld.CIT(A).

5.

We have heard the rival contentions and perused the record placed before us. The only grievance of the assessee is that the net profit of the assessee should have been estimated by the Assessing Officer based on the past trend. We note that the assessee is having turnover of Rs.11.85 crore. Even though the assessee is required to get the books of account audited but the same has not been carried out nor the income tax return has been filed. However, the turnover of the assessee and nature of contractual business has not been disputed by the Assessing Officer. Ld. Assessing Officer has estimated the income by applying 8% on the total receipts from cab services. Assessee has 3 Ramdas Maruti Yewale

furnished all the details of preceding four years, i.e. A.Y. 2016-17 to A.Y. 2018-19. During those years the books of account have been regularly audited and turnover is also ranging from Rs.9.81 crore to Rs.12.13 crore. Net profit rate as per the audited profit and loss account are ranging from 5 to 5.5%. Considering all these facts and the consistent net profit rate offered by the assessee in the past, we deem it appropriate that net profit rate of 5.75% should be applied to fairly estimate the net profit for the year under consideration. In order to meet the ends of justice, applying net profit rate at 5.75% the business income of the assessee is estimated at Rs.68,13,670/- as against the income estimated by the Assessing Officer at Rs.94,79,890/-. Accordingly, the assessee gets relief of Rs.26,66,220/- and the grounds of appeal raised by the assessee are partly allowed as per the terms indicated hereinabove.

6.

In the result, the appeal of the assessee is partly allowed.

Order pronounced on this 20th day of May, 2026. (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER पुणे / Pune; दिन ांक / Dated : 20th May, 2026. Satish Satish Kumar Madishetty Date: 2026.05.20 18:07:45 +05'30'

4 Ramdas Maruti Yewale

आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent.

2.3.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “B” बेंच, 4. पुणे / DR, ITAT, “B” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,

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