ASST CIT 24 (1), MUMBAI vs. SHRI. DEEPAK NAVIN SHAH, MUMBAI

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ITA 6879/MUM/2019Status: DisposedITAT Mumbai17 September 2021AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found the CIT(A)'s order to be well-reasoned, considering the assessee's average net profit ratio and industry averages. Therefore, the Tribunal decided not to interfere with the CIT(A)'s decision.

What were the facts?

The Revenue appealed against the CIT(A)'s order which reduced the estimated net profit on suppressed sales from 7% to 5%. The assessee was engaged in furniture manufacturing and sale, and the assessment was re-opened based on information from the Central Excise Department regarding suppressed sales.

What were the issues?

Whether the CIT(A) was justified in reducing the estimated net profit on suppressed sales. The correctness of the CIT(A)'s modification of the AO's assessment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Hearing: 24/06/2021Pronounced: 17/09/2021

ORDER PER VIKAS AWASTHY, J.M: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-36, Mumbai [hereinafter referred to as ‘the CIT(A)’] dated 29.08.2019 for the Assessment Year (AY) 2010-11.

1.

2 आअसं. 5887/मुं/2019 (िन.व.2009-10) (A.Y.2009-10) 2. The brief facts of the case as emanating from records are: The assessee is engaged in manufacturing and sale of furniture. On the basis of information received from the Deputy Director, Central Excise DGCEI, Zonal Unit, Mumbai, assessment for AY 2010-11 in the case of assessee was re-opened. The Central Excise Department carried out search action on the premises of Amardeep Design, a sister concern of the assessee. As per the information received, the assessee had suppressed sales to the tune of Rs. 1,17,18,211/-, the Assessing Officer (AO) estimated Net Profit at the rate of 7% on undisclosed sales and made addition of Rs. 8,35,724/-. Aggrieved by the assessment order dated 28.12.2016 passed under section 143(3) read with section 147 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], the assessee filed appeal before the CIT(A). The CIT(A) after examining the facts of case and documents on record modified the assessment order by restricting Net Profit to 5% instead of 7% estimated by the AO. Against the relief granted by the CIT(A), the Revenue is in appeal before the Tribunal.

3.

Sh. Sanjay J. Sethi representing the Department vehemently defended the assessment order and prayed for restoring the Net Profit estimated by the AO.

4.

Submissions made by ld. DR heard, orders of the authorities below examined. A perusal of the impugned order reveals that the CIT(A) has granted part relief to the assessee by restricting Net Profit at 5% after considering average Net Profit ratio of the assessee for the last five preceding years and the average net profit of the industry. I find the impugned order well- reasoned, hence, the same warrants no interference.

3 आअसं. 5887/मुं/2019 (िन.व.2009-10) (A.Y.2009-10) 5. In the result, appeal of the Revenue is dismissed, sans merit.

Order pronounced in the open court on Friday, the 17th day of September, 2021.

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