TAJSHREE MOTORS PVT LTD,NAGPUR vs. DCIT/ACIT CIRCLE-4, NAGPUR

Brief facts of the case are that assessee-company did not choose to file the return of income for AY 2018-19. Based on the information available with the Department, 148A proceedings were initiated. In response to the notice issued u/s. 148, assessee neither furnished return of income nor provided any documents. In absence of financial statements /documents, total credits in the bank accounts at Rs.55,88,80,400/- have been taken as gross receipts and estimated the gross profit @ 6.35% which comes to Rs. 3,54,88,905/-, in which depreciation of Rs. 60,60,315/- was deducted. Consequently, Ld. Assessing Officer (AO) completed the assessment making addition of Rs.2,94,28,950/-.

Aggrieved with the above addition, assessee preferred appeal before the Ld. CIT(A). Due to non-compliance to the various notices issued, Ld. CIT(A) dismissed the appeal of

At the beginning, learned counsel for the assessee as punctilious he is ever fairly admitted that assessee could not comply with the notices issued by the Ld. CIT(A) due to circumstances beyond control. The documents whatever was called for by the Ld. CIT(A) are now available with the assessee. He further submitted that due to non-availability of documents/ financial statements, Ld. AO has taken the bank credits to estimate GP which is quite arbitrary. As per the learned counsel, Ld. AO ought to have taken turnover of the assessee as per GST and VAT returns to estimate NP instead of GP. Therefore, he prayed for one more opportunity to appear before the Ld. Jurisdictional Assessing Officer (JAO) to substantiate his averments and to submit the relevant documents and evidences to buttress his claim.

On the contrary, Ld. Departmental Representative (DR) supported the orders of the authorities below and submitted that though various opportunities have been granted, assessee could not avail to produce any documents before 3 (Tajshree Motors Pvt. Ltd.) the Ld. AO. He further submitted that before the Ld. CIT(A) also, assessee did not appear and failed to file any documents, therefore, Ld. CIT(A) has rightly upheld the order of the Ld. Ld. AO and no interference of this Tribunal is required.

We have heard rival contentions and perused the records placed before us. We observe that in absence of documentary evidence, Ld.AO made the addition of Rs. 2,94,28,950/- @6.35% of the total gross receipts as per bank. Admittedly, assessee did not participate in the appellate proceedings before the Ld.CIT(A) and the same has been accepted by the learned counsel for the assessee during the course of hearing before this Tribunal. The main reason for such non-compliance is due to dispute between the owners and the promotors of the company. Before us, learned counsel filed a paper book running into 133 pages and submitted that Ld. AO seriously erred in taking into consideration the bank credits instead of turnover of the company arriving at gross profit ignoring net profit declared.