ANIL KUMAR SAH,GARHWA vs. ASSTT/DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1 , RANCHI

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER AND SMT. RAJANI GUDURI, JUDICIAL MEMBER I.T.A. No. 295/RAN/2026 (Assessment Year: 2017-18) (Physical Hearing) Anil Kumar Sah, ACIT/DCIT, H. No. 32, Sangbariya P.O. Latdang, Central Circle-1, Vs. Garhwa-822114 (Jharkhand) Ranchi. PAN No. AYUPS 8817 M Appellant/ Assessee Respondent/ Revenue

I.T.A. No. 299/RAN/2026 (Assessment Year: 2018-19) Anil Kumar Sah, ACIT/DCIT, H. No. 32, Sangbariya P.O. Latdang, Central Circle-1, Vs. Garhwa-822114 (Jharkhand) Ranchi. PAN No. AYUPS 8817 M Appellant/ Assessee Respondent/ Revenue

I.T.A. No. 364/RAN/2026 (Assessment Year: 2018-19) ACIT, Anil Kumar Sah, Ranchi. H. No. 32, Sangbariya P.O. Latdang, Vs. Garhwa-822114 (Jharkhand) PAN No. AYUPS 8817 M Appellant Respondent

Assessee represented by Shri B.K. Ishwar, C.A. Department represented by Shri Sandipan Khan, Sr.DR Date of hearing 24/09/2026 Date of pronouncement 14/10/2026 O R D E R PER: BENCH 1. These are the appeal and cross appeal filed by the assessee and the revenue directed against the separate orders of the ld. CIT(A), Patna-3, Patna all dated

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals 26/03/2026 for the Assessment Years (AY) 2017-18 & 2018-19 respectively. Since all the appeals have common facts and grounds, therefore, with the consent of parties, all were clubbed and heard together and being decided by this common order. As a lead case, we take up ITA No. 295/Ran/2026 for the A.Y. 2017-18, wherein the assessee has raised following grounds of appeal: "1. That the LD CIT(Appeal) erred both in Facts and Law by not considering the Facts evident from Seizure memo which was apprised during Appellate Proceedings and accepted the assumed/Hypothetical Turnover based on incomplete Remand Report even though the same was not matched with Seizure Memo and the Said remand report had not any workings for arriving the Per day Average Turnover. 2. That the LD CIT(Appeal) erred both in Facts and Law by Confirming the Turnover based on extrapolation which was nearly Double the Actual Trading Sales and not based on Seized document found during the Survey For Concern Assessment Year and as against deficit of only 15.15 Per cent in 8.30 months that too only in respect of trading sales arbitrarily confirmed the extrapolated turnover and without any basis and evidence confirmed the estimated Turnover which is excessive and exorbitant. 3. That the LD CIT(Appeal) erred both in Facts and Law by confirming the Profit Percentage 18.49 Per cent which was wrongly Calculated by the Assessing Officer and arbitrarily rejected the Book Profit as per Audited Accounts 14.42 Per cent other than Bank Interest. 4. That, the appellant craves leave to adduce additional grounds and/OR to amend OR without any of the foregoing grounds before OR at the time of hearing of appeal." 2. Facts of the case, in brief, are that the assessee Shri Anil Kumar Sah, is a Doctor by profession and showing income as consultancy charges and sale of medicines from his clinic. The assessee filed his return of income for the assessment year under consideration on 30/11/2017 and declared a total income of ₹ 14,78,060/-. The case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 (in short, the Act) and notice under

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals Section 148 of the Act dated 21/02/2020 was issued and assessee was asked to file return of income for the said assessment year. In response to that the assessee filed his return of income showing the same total income of ₹ 14,78,060/-. Thereafter, notice under Section 143(2) of the Act was issued to the assessee and subsequently under Section 142(1) of the Act alongwith questionnaire. In this case, a survey operation was conducted under Section 133A of the Act held on 10/10/2017 in the business premises of the assessee at M/s Jyoti Clinic, Sanbaria, Meral, Garhwa and several incriminating documents marked as AKS-24, AKS-27, AKS-34 and AKS-39 were found and inventorised. During the course of survey operation, the total sales of the medicines and the consultancy fee charges as per the impounded register for one month and total sales was worked out at ₹ 17.00 lacs for that month which was extrapolated by the Assessing Officer for the whole year and the turnover was estimated at ₹ 2,04,00,000/- where the assessee's turnover was shown at ₹ 89,66,019/-. The assessee was asked to explain the difference between the two turnovers. However, no explanation whatsoever was filed by the assessee. It was found from the assessee's Profit and Loss account that net profit was worked out @ 18.49% on the gross receipts of ₹ 89,66,019/-, the same profit rate was applied by the Assessing Officer on the turnover worked out by the Assessing Officer at ₹ 2,04,00,000/- which comes to ₹ 37,71,960/-. The Assessing Officer also found photo copies of purchase deed No. 2807/2777/2016 dated 17/10/2016 amounting to ₹ 35.00 lacs. From the sale deed, it was found that the assessee had purchased a flat (duplex unit) measuring 1466 square feet at M/s Sai Akhil Construction (P) Ltd., so the

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals assessee was also asked to explain the source of investment in the said flat. Regarding this purchase deed of the said property, the assessee was asked during the course of survey, the assessee admitted on oath that the said investment was an undisclosed investment and accordingly, offered it for taxation. However, the same was not disclosed in his return of income filed in response to the notice under Section 148 of the Act. The Assessing Officer, therefore, added this sum of ₹ 35.00 lacs under Section 69B of the Act to the total income of the assessee and taxed it under Section 115BBE of the Act. 3. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the ld. CIT(A), who vide the impugned order dated 26/03/2026, partly allowed the appeal of the assessee and deleted the addition on account of ₹ 35.00 lacs as unexplained investment under Section 69B of the Act on the ground that since no incriminating documents or material evidencing undisclosed investment of ₹ 35.00 lacs for the period under consideration was found during the course of survey and in the remand report, the Assessing Officer has also accepted that no new investment was found for the period under consideration, the addition made by the Assessing Officer, cannot be confirmed in absence of independent material. 4. Regarding the profit rate of 18.49% applied by the Assessing Officer, the ld. CIT(A) further held that the profit rate adopted by the Assessing Officer at 18.49% after rejecting the books of account under Section 145(3) of the Act is correct and there is no need to make any variation in that on the total turnover of ₹ 1.69 crore instead of ₹ 2,04,00,000/-, as in the remand report, the Assessing Officer himself has admitted that the total turnover comes to ₹

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals 1.69 crore. The ld. CIT(A), therefore, confirmed the addition of ₹ 31,71,960/- by working out the net profit rate of 18.49% of the total turnover. 5. Further aggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal. 6. During the course of hearing, the assessee has made written submission as under: "That the Assessment was made without verifying the Documents during the Survey and Wrong Estimation of Turnover & Calculation of Wrong Percentage of Profit. Neither the Sales Turnover tallies with the Seized Documents AKS -24, 27,39 nor the Percentage of Profit from the Audited accounts. The Seized Document AKS-24 Contain Sales Details & Dues List, AKS-27 Contains Sales Details of F/Year 2015-16 From Page 2 to 135, Dues List & Sales Details. The Department while Calculating the Average Turnover Per day have not Considered these Fact as a Result Wrong Estimates has been arrived at. Further the Estimated sales determined by the department wrongly. The Percentage of Profit was also calculated wrongly ignoring the Interest Income From Bank. The Fact of the case was that the Monthly Receipt Disclosed in the Return was as under :-

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals The Details of Month Wise Shortage From Audited accounts are as under in Gross Receipt

The Department had also Calculated Wrongly the Percentage of Profit. The Profit disclosed other than Bank Interest is Rs 1293244/ as per Return of Income. The Percentage of Profit on a Turnover of Rs 8966019.00 is 14.42 Percent. The Assessing Officer had document of Sales Receipt Only for the Period April 2016 to 10/12/2016. The Sales Details month wise are as per AKS-24,27,39 are as Under :-

The Earlier Details of Sales Filed by the Appellant monthly was a mistake in Calculation & amount. The Average Sales arrived by the Department is based on Wrong data and Calculation because the said Sales are not as Per seized Document. Any Estimation not supported by evidence is illegal & void. The Law does not allow to Estimate the Turnover without any Supportive evidence. Estimation of Turnover without any Supporting evidence is bad & illegal. It was however Found that there was Concealed sales of Rs 1112247.00 in some of the month hence Profit @ 14.42 On Concealed Sales Rs 1112247.00 Only Should be added and Balance Income added Should be deleted.

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals The Details of Sales & Dues List in accordance with Seizure List i.e AKS 24, 27 & 39 is enclosed. The Ld CIT(Appeal) has not observed the Sales details Filed by the Appellant during Assessment Proceedings. He relied on the Assessing Officer Finding even though not based on Seized material. Further the Profit Protested by the Assessee was based on Statement of accounts Filed by the Appellant. The Assessing Officer had wrongly determined the Percentage of profit based on statement of accounts filed. The Ld CIT (Appeal) also had ignored the same. In the Remand report if no compliance is made it does not mean that wrong turnover will be considered for the determination of Profit. CIT(A) Page No 9 Last Para. The deficit in Turnover was only. Rs 1112247.00 i.e in Percentage Term 12.40 Per cent of the Assessee Turnover. The Turnover should be enhanced to that extent and consequently Percentage of Profit to be applied i.e @ 14.42% on enhanced Turnover. The excess income & Turnover thus determined should be deleted." 7. The ld. counsel for the assessee also submitted balance sheet, Profit and Loss account, capital account and the details of sales found during the course of survey on the basis of materials found and impounded during the course of survey. 8. The ld. Sr. DR, on the other hand, supported the orders of the lower authorities. 9. We have considered the rival submissions and we find no infirmity in the order of the ld. CIT(A) wherein he has adopted the same net profit rate of 18.49% which was declared by the assessee himself on the turnover as declared by him in his return filed under Section 148 of the Act. Regarding the actual turnover, the Assessing Officer had earlier worked out the actual turnover at ₹ 2,04,00,000/- on the basis of the impounded material but later on, in the remand report, the same was revised at Rs.1.69 crores. Thus, the Ld. CIT(A)

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals has rightly considered the actual turnover at Rs.1.69 cr. and estimated the net profit rate of 18.49% after rejecting the books of account. It is also found that the ld. CIT(A) did not find any discrepancy in that and thus, the addition made by the Assessing Officer and duly confirmed by the ld. CIT(A) is hereby upheld. 10. In the result, this appeal of the assessee is partly allowed. 11. Now we take appeal of the assessee in ITA No. 299/Ran/2026 for the A.Y. 2018-19 and the cross appeal filed by the revenue in ITA No. 364/Ran/2026 for the A.Y. 2018-19. 12. We find that the grounds of appeal and the facts and circumstances of this case is identical to the facts and circumstances of ITA No. 295/Ran/2026 for the A.Y. 2017-18 but we observe that the net profit of 18.49% on a declared turnover of ₹ 1.69 crore comes to ₹ 31,24,810/- which is correct and there is no need to change that. However, the addition of ₹ 14,08,333/- made on the ground that the assessee has made unexplained investment in unaccounted purchases made out of books, the ld. CIT(A) deleted the said addition on the ground that once the profit rate was estimated after rejecting the books of account, further addition on account of unexplained investment in the purchases cannot be added in the absence of any incriminating material and would amount to double addition. We subscribe to his view and therefore, uphold the same. 13. The Assessing Officer has also made addition of ₹ 75.00 lacs on the ground that during the course of survey operation, the assessee admitted on statement on oath that he had made investment in the construction of new

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals clinic and also made investment in the purchase of land and flat which the assessee himself had disclosed during the course of survey. The ld. CIT(A) however, deleted the addition made by the Assessing Officer on the same principle as followed in the A.Y. 2017-18 in ITA No. 295/Ran/2026. Since we have already held in ITA No. 295/Ran/2026 for the A.Y. 2017-18 that there is no infirmity in the order of the ld. CIT(A), we hold in this year also that there is no reason to interfere with the order of the ld. CIT(A) and we uphold the same. 14. In the result, the appeal of the assessee is partly allowed. 15. Now coming to the cross appeal filed by the revenue in ITA No. 364/Ran/2026 for the A.Y. 2018-19, since we have already upheld the order of the ld. CIT(A) by giving reasons for that in the assessee's appeals in ITA No. 295/Ran/2026 and ITA No. 299/Ran/2026 for the A.Y. 2017-18 and 2018-19, therefore, the appeal of the revenue is dismissed. 16. In the result, both the appeals of the assessee i.e. ITA No. 295/Ran/2026 and 299/Ran/2026 are partly allowed and the appeal of the revenue in ITA no. 364/Ran/2026 is dismissed. Order pronounced in open court on 14/10/2026.

Sd/- Sd/- (RAJANI GUDURI) (RATNESH NANDAN SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Ranchi, Dated: 14/10/2026 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT

I.T.A. No. 295/RAN/2026 Anil Kr. Sah Vs ACIT/DCIT & Ors. Appeals 4. DR By order 5. Guard File

Sr. Private Secretary, ITAT, Ranchi