LAVANYA JEWELS,CHENNAI vs. DCIT, COIMBATORE

Per G.MANJUNATHA, AM: These two appeals filed by the assessee are directed

against separate, but identical orders passed by the learned

CIT(A)-2, Coimbatore, both dated 30.11.2016 and pertain to

assessment years 2011-12 & 2012-13. Since, facts are identical

and issues are common, for the sake of convenience, these

appeals were heard together and are being disposed off, by

this consolidated order.

appeal for both assessment years, therefore, for the sake of

2 ITA Nos. 742 & 743/Chny/2017

brevity, grounds of appeal filed for the assessment year 2011-

12 are reproduced as under:-

“1. The order of The Commissioner of Income Tax (Appeals) 2, Coimbatore dated 30.11.2016 in l.T.A.No.38/2014-15 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the estimate of the profit at 10% of the turnover for the purpose of taxation without rejecting the books of accounts in the computation of taxable total income without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that the estimation of profit at 10% for taxation was wrong, erroneous, unjustified, incorrect and not sustainable in law. 4. The CIT (Appeals) failed to appreciate that the non production of books of accounts was due to the circumstances beyond the control of the appellant and ought to have appreciated that the lack of opportunity for establishing the said fact would vitiate the related findings in the impugned order. 5. The CIT (Appeals) went wrong in recording the findings in this regard in para 4.0 of the impugned order without assigning proper reasons and justification.

that there is a delay 34 days in filing appeals filed by the

assessee for both assessment years for which necessary

petition along with affidavit explaining reasons for condonation

of delay has been filed. The learned A.R for the assessee

3 ITA Nos. 742 & 743/Chny/2017 referring to petition filed for condonation of delay submitted that

delay in filing is due to mistake of counsel, who was appearing

before the Assessing Officer and learned CIT(A), but not due to

negligence of the assessee. The assessee neither derived any

benefit nor made any deliberate attempt to delay in filing

appeals. Therefore, small delay in filing appeals may be

condoned in the interest of justice.

petition filed for condonation of delay, but fairly agreed that

delay in filing appeals may be condoned.

assessee for condonation of delay, we are of the considered

view that reasons given by the assessee that counsel who

appeared before the learned CIT(A) has not filed appeals in

time due to reasons best known to him, but said delay is neither

intentional nor to derive any undue benefit definitely comes

under reasonable cause for condonation of delay and hence,

delay of 34 days in filing appeals for both assessment years is

condoned and appeals are admitted.

4 ITA Nos. 742 & 743/Chny/2017 6. Brief facts of the case are that the assessee is a

partnership firm which is engaged in business of trading in

jewellery filed its return of income for assessment year 2011-12

on 22.09.2011 declaring total income at Rs.23,37,100/- . The

assessee had also filed return of income for assessment year

2012-13 on 09.03.2013 declaring total income of Rs.

44,44,680/-. The assessment for impugned assessment years

have been completed u/s.143(3) of the Income Tax Act, 1961

and the Assessing Officer has determined total income of the

assessee by estimating 10% profit on total turnover declared by

the assessee for reason that the assessee could not file

necessary details including books of account, sale bills, cash

book and purchase bills. The assessee carried the matter in

appeal before first appellate authority, but could not succeed.

The learned CIT(A) for the reasons stated in his appellate order

sustained additions made by the Assessing Officer towards

estimation of profit on total turnover by holding that the

assessee never produced books of account and the Assessing

Officer left with no option, but to determine total income of the

assessee at its best judgement and thus estimated profit of

10% on total turnover, which is reasonable when compared to

5 ITA Nos. 742 & 743/Chny/2017 gross profit declared by the assessee for both assessment

years which at 8.45% on total turnover. Aggrieved by the

learned CIT(A) order, the assessee is in appeal before us.

learned CIT(A) has erred in sustaining additions made by the

Assessing Officer towards estimation of profit on total turnover

without appreciating fact that the assessee has maintained

proper books of account and such books of account are

audited by an Accountant as per provisions of section 44AB of

the Income Tax Act, 1961. The learned A.R further submitted

that although the assessee has filed certain details, but could

not file further details asked by the Assessing Officer due to

paucity of time, because the Assessing Officer has not given

proper opportunity before passing assessment order and thus,

appeals may be remitted back to the file of the Assessing

Officer to give one more opportunity to justify its case.

the learned CIT(A) submitted that the assessee could not avail

best opportunity of hearing provided by both the authorities,

6 ITA Nos. 742 & 743/Chny/2017 which is evident from fact that the assessee could not file

necessary books of account and other details before the

Assessing Officer and said lapse is continued even before first

appellate authority. Therefore, there is no error in the findings

given by the authorities below to estimate profit on total

turnover and hence, their orders should be upheld.

available on record and gone through orders of the authorities

below. Admittedly, the Assessing Officer has called for various

details including books of account, purchase and sale bills to

support income declared by the assessee in return of income

filed for relevant assessment years. Although, the assessee has

filed certain details including bank statement, details of salary,

e-TDS return statement and depreciation schedule, but could

not furnish books of account along with sale and purchase bills,

when the Assessing Officer has called upon the assessee to

produce the same. The assessee has given reasons for not

producing books of account before the Assessing Officer, as

per which the Assessing Officer had not given sufficient time to

collect books of account and produce for verification.

7 ITA Nos. 742 & 743/Chny/2017 Therefore, he pleaded that one more opportunity of hearing

may be given to substantiate its case before the Assessing

Officer by furnishing necessary books of account and other

details.

on record, we find merit in the arguments of the learned AR for

the assessee for simple reason that the Assessing Officer does

not seem to have given sufficient opportunity of hearing to the

assessee to produce necessary books of account and other

details to justify its case. No proper details are coming out from

assessment order for giving sufficient opportunity to the

assessee. Further, the learned CIT(A) has sustained additions

made by the Assessing Officer without properly recording his

reasons as to how books of account maintained by the

assessee are not correct and profit declared for year under

consideration is not acceptable. Therefore, we are of the

considered view that issue needs to go back to the file of the

Assessing Officer to give one more opportunity of hearing to the

assessee to file necessary books of account and other details

before the Assessing Officer. Hence, we set aside impugned

8 ITA Nos. 742 & 743/Chny/2017 orders passed by the learned CIT(A) and remit the issue for

assessment years 2011-12 and 2012-13 to the file of the

Assessing Officer and direct him to reconsider the issue de

novo, in accordance with law, after giving reasonable

opportunity of hearing to the assessee. It is needless to say, the

assessee shall appear before the Assessing Officer and

produce necessary details as and when the Assessing Officer

calls for same, failing which assessments already framed by the

Assessing Officer stand sustained.

assessment years are treated as allowed for statistical

purposes.

Order pronounced in the open court on 30th November, 2021 Sd/- Sd/- (महावीर �संह) ( जी. मंजुनाथ ) (Mahavir Singh) (G. Manjunatha ) उपा�य�/ Vice-President लेखा सद%य / Accountant Member चे'नई/Chennai, (दनांक/Dated 30th November, 2021 DS

आदेश क� ��त*ल+प अ,े+षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आयु-त (अपील)/CIT(A) 4. आयकर आयु-त/CIT 5. +वभागीय ��त�न1ध/DR 6. गाड� फाईल/GF.