Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’, NEW DELHI
Before: SH. H.S. SIDHU
The assessee has filed the appeal against the impugned order dated 20.02.2019 passed by Ld. CIT(A)-32, Delhi relevant to assessment year 2015-16 on the following grounds:- “1. The Ld. CIT(A) erred in law and on facts in upholding the rejection of books of account by the AO.
2. The Ld. CIT(A) erred in law and on facts in upholding the estimation f income @8% by the AO.
The Ld. CIT(A) erred in law and on facts in upholding the addition of Rs. 17,74,544/-.
The brief facts of the case are that the assessee company is engaged in the business of transportation. Assessee has filed its return of income on 30.9.2015 for AY 2015-16 declaring an income of Rs. 1,02,130/-. The case of the assessee was selected for scrutiny with the main reason of ‘low profit shown by transporter’. Thereafter, the assessment was completed u/s. 143(3) of the Income Tax Act, 1961 (in short “Act”) on 28.11.2017 at a total income of Rs. 18,76,676/- against the returned income of Rs. 1,02,130/-. AO in his assessment order, estimated the income of the assessee at 8% of gross receipts of Rs. 2,34,58,450/- and made an addition of Rs. 17,74,544/- after adjusting the income declared by the assessee. Against the assessment order dated 28.11.2017, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 20.02.2019 has sustained the action f the AO by holding that application of 8% at Gross Receipt is reasonable and upheld the same. Against the impugned order dated 20.2.2019, assessee is in appeal before the Tribunal.
3. Ld. A.R. for the Assessee has stated that Ld. CIT(A) erred in upholding the rejection of books of account by the AO and also erred in upholding the estimation of income @8% by the AO, as a result thereof the addition of Rs. 17,74,544/- was sustained. He stated that the estimation of GP is very excessive which may be reduced appropriately.
On the contrary, Ld. DR heavily supported the order of the Ld. CIT(A) and submitted that AO has reasonably estimated the GP rate @8%, which the Ld. CIT(A) has rightly upheld, which does not need any interference.
I have considered the rival submissions and gone through the orders of lower authorities. I find that the sole issue for adjudication is estimation of GP rate @ 8%. Keeping in view of the facts and circumstances of the case and in the interest of justice, I deem just and proper to estimate the GP rate @5% instead of GP rate @8%. I hold and direct accordingly. The AO is directed to re-compute the assessee’s income and assess the GP @5% and then compute the income of the assessee, in accordance with law.
In the result, the appeal of assessee is allowed. The decision is pronounced on 11-03-2020.