VATSALABAI KARBHARI DEORE,NASHIK vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, NASHIK

This appeal at the instance of assessee pertaining to A.Y. 2014-15 is against the order dated 30.06.2025 of the National Faceless Appeal Centre, Delhi passed u/s.250 of the Income Tax Act, 1961 emanating from Assessment Order dated 16.12.2016 passed u/s.144 of the Act.

At the outset, ld. Counsel for the assessee requested for restoring the issues to the file of ld. Jurisdictional Assessing Officer for denovo adjudication on the ground that assessee failed to make any compliance before ld. AO and best judgment assessment has been framed u/s.144 of the Act. He also submitted that against the gross profit rate of 7.35% declared by the assessee, ld.CIT(A) has affirmed the action of the AO applying 8% net profit rate which is excessive. He also submitted that apart from estimating the profits ld. AO has also disallowed the interest expenditure of Rs.57,96,647/- incurred by the assessee on the loans raised for the business purposes. However, for want of necessary details, ld.CIT(A) has affirmed the action of the AO.

On the other hand ld. Sr. DR did not controvert the contentions made by ld. Counsel for the assessee of restoring the issues to the file of ld. JAO for fresh examination of the issues.

We have heard the rival contentions and perused the record placed before us. We observe that the assessee is an individual and carrying on the business of Poultry farm under the name of M/s.Akash Poultry Farm. Income of Rs.27,62,130/- declared in the e-return filed for A.Y. 2014-15 on 26.11.2014. After the case being selected for scrutiny through CASS followed by validly serving of statutory notices u/s.143(2) and 142(1) of the Act ld. AO carried out the assessment proceedings. However, in absence of any response from the assessee and non-submission of any details, ld. AO passed best judgment assessment making two additions firstly by disallowing interest expenses at Rs.57,96,647/- and secondly estimating the net profit @8% on the total turnover after allowing 7.35% gross profit declared by the assessee, and made addition of Rs.21,62,501/-. Against the additions, assessee preferred appeal before ld.CIT(A) but failed to succeed on the impugned additions.

We observe that the assessee has been claiming that its books of accounts are duly audited and the gross profit rate declared during the year is consistent to the gross profit declared in the preceding years and rather it is on higher side and therefore by ld. Counsel for the assessee submitted that 8% net profit rate adopted by the Ld. AO to be on a very higher side. It is also submitted that genuine interest expenditure has not been allowed. Considering the fact that assessee failed to place necessary details before the AO and ld.CIT(A) and under the given facts and circumstances, we deem it proper to remit back all the issues raised in the instant appeal to the file of ld. JAO for denovo adjudication. Needless to mention that in the set aside proceedings Ld. JAO shall afford reasonable opportunity to the assessee to file necessary details. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.