GMA PINNACLE AUTOMOTIVES PRIVATE LIMITED,ALUVA, ERNAKULAM vs. CIT-ADDITIONAL-JOINT-DEPUTY-ASSISTANT COMMISSIONER OF INCOME TAX,NATIONAL E-ASSESSMENT CENTRE, IS PRESS ROAD,KOCHI

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ITA 393/COCH/2024Status: DisposedITAT Cochin23 April 2025AY 2018-19Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI SOUNDARARAJAN K. (Judicial Member)3 pages

AI SummaryPartly Allowed

Facts

The assessee, an automobile dealer, challenged the CIT(A)'s order concerning the adoption of gross profit at 6% (reduced from AO's 6.08%). The AO had initially made an addition based on estimated gross profit and also disallowed expenses under Section 40(a)(ia) for non-deduction of TDS on staff incentives, though the latter disallowance was deleted by the CIT(A). The assessee contended that the CIT(A) failed to consider relevant annexures (2, 3, and 5) while deciding on the gross profit issue.

Held

The Tribunal held that the CIT(A)'s order was not a speaking order as it failed to consider all relevant documents (Annexures 2, 3, and 5) submitted by the assessee regarding the gross profit. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication, directing the CIT(A) to consider all annexures and pass a speaking order after hearing the assessee.

Key Issues

Whether the CIT(A) erred in confirming the gross profit rate without considering all relevant documents, and whether the CIT(A)'s order regarding gross profit was a speaking order.

Sections Cited

143(1), 143(3), 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN

Before: SHRI INTURI RAMA RAO & SHRI SOUNDARARAJAN K.

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 18/03/2024 in respect of the A.Y. 2018-19.

The assessee is a dealer of automobiles and also engaged in the business of retail sales and service of the vehicles apart from the sale of spare parts / accessories. The assessee filed their return of income on 22/09/2018 and the same was processed u/s. 143(1) of the Act. Thereafter the return of income was selected for scrutiny assessment under CASS and notices were issued for which the assessee filed their reply along with the necessary supporting documents. The AO made the assessment u/s. 143(3) of the Act in which the AO had made additions / disallowances. The AO had estimated the gross profit at 6.08% and made the addition on this core. Similarly, the AO had disallowed the expenses u/s. 40(a)(ia) of the Act since no TDS was effected by the assessee while paying the incentives to their staff. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and filed the written submissions and documentary evidences on 11/03/2024. The Ld.CIT(A) without considering the various documents filed before him, had rejected the contention of the assessee that the gross profit adopted is not correct, but reduced the gross profit to 6% as against the gross profit adopted by the AO at 6.08%. Insofar as the disallowance made u/s. 40(a)(ia) of the Act, the Ld.CIT(A) had accepted the case of the assessee and deleted the said addition. Now the assessee is challenging the order of the Ld.CIT(A) regarding the adoption of gross profit.

At the time of hearing, the Ld.AR submitted that the Ld.CIT(A) had not considered the documents marked annexures 2,3 and 5 before confirming the gross profit at 6% and therefore the order of the Ld.CIT(A) is not a well considered order. The Ld.AR further submitted that if the Ld.CIT(A) had considered the said documents, he could have accepted the claim made by the assessee and therefore prayed to set aside the order of the Ld.CIT(A). The Ld.AR also furnished the copies of the annexures filed before the Ld.CIT(A) and prayed to allow the appeal.