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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: SH. N. K. BILLAIYA & SH. KULDIP SINGH
This appeal filed by the assessee is preferred against the order of the CIT(A)-1, Gurgaon dated 16.12.2015 pertaining to A.Y. 2012-13.
The grounds raised by the assessee read as under :-
The Main ground of appeal is against the adoption of 4% rate of net profit by the Ld. AO which was upheld by the commissioner
Appeals. During the appeal proceedings the Ld. Commissioner (Appeals)-l has relied on the assessing officer's decision of adopting 4% rate of net profit as the same was followed by his predecessor, which was bad in law and against the provisions of the Income Tax Act. Commissioner (Appeals)-l rejected the appeal vide order dated 16.12.2015 on the ground reproduced below: "It is a fact on record that the additions made by AO were an agreed addition. This fact has been clearly recorded in the assessment order. This issue was also discussed with the AR of the applicant during the course of appellate proceedings. The AR of the appellant confirmed that the addition was an agreed addition. It is settled Saw now that no appeal lies against the agreed addition." The Ld. Commissioner (Appeals) -1 has mentioned in its order that the AR of the appellant confirmed that the addition was an agreed addition and It is a settled law that no appeal lies against the agreed addition. Your honor, It is true that the A.R of the assessee agreed on the net profit of 4% of receipts in the A.Y 2010-11 and not this year for the sole reason that a huge amount of refund was stuck due to pending scrutiny assessment case. In those years, it was very difficult to get the refund back, in that pressure, the A.R of the assessee agreed for the same but in the period under consideration, the A.R of the assessee never submitted that net profit of 4% of receipts is justified in the present case. The A.R has submitted a letter dated 18th Feb 2015 in response against the show cause notice issued by the assessing officer as to why net profit of 4% of receipts would not apply in this case. We would also like to bring to your kind attention that in the A.Y 2013-14, A.Y 2014-15 and A.Y 2015-16 the income of the assessee has been assessed on the basis of books and not on estimation basis, the question of assuming net profit on estimation basis never arose in these years. As per Income tax law in making an assessment for a particular year, the account books for that year have alone to be considered as each assessment year is independent. It cannot be assumed that merely because for some reason the account books in the earlier year(s) were rejected, these stood condemned forever as decided in Ram Autar Ashok Kumar vs Commissioner of Sales Tax on 20 July, 1979 (1980) 45 STC 366 (All) (Copy enclosed for your ready reference and record as Annexure “A”). Aggrieved by the order Commissioner (Appeals)-1, assessee preferred this appeal.”
None appeared on behalf of the assessee inspite of notice. We heard the DR at length. Case record carefully perused.
A perusal of the grounds of appeal mentioned here in above show that though the assessee had agreed for addition but lateron retracted from its surrender claiming that in the succeeding assessment year the income had been assessed as per the books accounts and not on estimation basis.
Before us the DR fairly stated that the appeal may be set aside in the files of the AO for denovo assessment.
We have carefully perused the orders of the authorities below. The assessment year under consideration is A.Y. 2012-13 and the assessee had agreed on the net profit of 4% of receipts in the assessment year 2010-11. The AO has applied the same ratio during the year under consideration without going into the merits of the case.
In the interest of justice and fair play we deem it fit to remit the assessment to the files of the AO. The AO is directed to decide the appeal dehors the surrender made in A.Y. 2010-11, on the merits of the year under consideration. Needless to mention the AO shall give a reasonable and sufficient opportunity of being heard to the assessee.
6. In the result, the appeal filed by the assessee is allowed for statistical purpose.
7. Decision announced in the open court in the presence of both representatives on 11.11.2021.