LATE SH. SOHAN LAL AGGARWAL,GURGAON vs. ACIT, NEW DELHI

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ITA 986/DEL/2017Status: DisposedITAT Delhi11 August 2021AY 2013-146 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the entire turnover cannot be treated as profit. It directed that the addition should be restricted to 5% of the net profit on the gross receipt, considering the peculiar facts and circumstances.

What were the facts?

The Assessing Officer added Rs. 49,71,570/- as undisclosed income due to a mismatch between the assessee's reported gross receipts and ITS details. The assessee claimed the difference was due to unreflected TDS and illness of the proprietor.

What were the issues?

Whether the entire difference in gross receipts, due to unreflected TDS and illness, should be treated as undisclosed income, or only the profit element thereof.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “G”: DELHI

Before: SHRI N.K. BILLAIYA

Hearing: 09.08.2021Pronounced: 11.08.2021

per the TDS certificate, then on the said difference, the only embedded portion of the profits is to be taken into consideration and addition is to be made thereon. There are number of judicial pronouncements by which the principle to this effect has been laid down that the total sale cannot represent as the profit of the assessee. The net profit rate has to be adopted and once the net profit is adopted it cannot be said that there is perversity of approach. Thus, taking into consideration the entire aspect of the matter, we do not find any justification in making the addition of the entire turnover to the income of the assessee. Having regard to the peculiar facts and circumstances of the case, we find it justified to restrict the addition at 5% of the net profit on the gross receipt of Rs. 11,93,79,537/-. The Ld.

1.

6 ITA.No.986/Del./2017 Late Sh. Sohan lal Aggarwal. Assessing Officer is directed to grant relief to the assessee as on the above terms.

6.

In the result, the assessee’s appeal is partly allowed.

Order pronounced in the open Court.

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