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Facts
The assessee's appeal for AY 2022-23 arose against an order passed under section 147 read with section 144 of the Income Tax Act, 1961. The core issue was the correctness of the lower authorities' action in assessing/estimating the assessee's net profit in his timber business at 20% instead of the declared 6.17%.
Held
The Tribunal considered the assessee's audited profit rates ranging between 3.94% to 5.33% in subsequent years. In the interest of justice, a lump sum net profit estimation of 7% was deemed appropriate for the assessee's case, with the caveat that it should not be treated as a precedent.
Key Issues
Correctness of net profit estimation in the timber business.
Sections Cited
147, 144, Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2022-23 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1081622510(1) dated 10.10.2025, in proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It transpires during the course of hearing that the sole substantive issue between the parties is that of correctness of both the lower authorities’ action assessing/estimating the assessee’s NP in timber business etc. @20% than that @ 6.17% declared in his computation.
Anuj Jain 4. That being the only issue, learned counsel has invited the tribunal’s attention to the assessee’s profit rate(s) ranging between 3.94% to 5.33% in the succeeding three assessment years as per his audited books. Faced with this situation and in the larger interest of justice, it is deemed appropriate that a lump sum NP estimation @7% in the assessee’s case would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.