Loading judgment…
Facts
The assessee, a real estate development company, had its premises searched, leading to the discovery of incriminating documents indicating bogus expenses. The Assessing Officer rejected the assessee's books under Section 145(3) and recomputed the Gross Profit (GP). The assessee filed nine appeals against the recomputed GP for Assessment Years 2014-15 to 2021-22.
Held
The Tribunal noted that the assessee failed to prove its low gross profit computation for the initial six assessment years, and the lower authorities did not discuss comparable segmental revenues when enhancing the GP. Therefore, the Tribunal directed a lump sum GP estimation at 8% or the rate declared by the assessee, whichever is higher.
Key Issues
Whether the Gross Profit (GP) recomputed by the Assessing Officer for the assessment years 2014-15 to 2021-22 is justified, and if not, what would be the correct GP estimation to meet the ends of justice.
Sections Cited
147, 145(3), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Satbeer Singh Godara&
ORDER Per Bench: These assessee’s nine appeals for Assessment Years 2014- 15 to 2021-22, arise against the CIT(A)-26, New Delhi’s DIN & order Nos. ITBA/APL/M/250/2024–25/1091723399(1), 1071723529(1), 1071731183(1), 1071730933(1), 1071730735(1), 1071727190(1), 1071730497(1), 1073086353(1) and 1073010178(1) dated 31.12.2024, 10.02.2025 and 10.02.2025, in proceedings u/s 147 r.w.s.
Heard both the parties at length. Case files perused.
After vehemently arguing in favour of the assessee’s various legal and factual substantive ground identically pleaded in all these cases, learned counsel states very fairly that he would only wish to press for quantification of it’s GP estimation made in both the lower proceedings.
It is in this factual backdrop that we reject the assessee’s all grounds raised in these nine cases in identical terms except GP estimation made by both the learned lower authorities in succeeding terms.
This assessee/appellant is admittedly a company carrying out civil construction in real estate development etc. Learned departmental authorities appear to have carried out the search in question at it’s premises on 02.03.2022 in connection with M/s Gaur Group of companies etc. There is no dispute between the parties that they came across various incriminating documents and evidence indicating it to have booked bogus expenses representing sub-contracts & labour heads etc. This is what made the learned Assessing Officer to reject the others appeal Radha Buildtech (India) Pvt. Ltd. assessee’s books u/s 145(3) of the Act and recomputed it’s GP as under: Assessment Year Gross Profit Gross Profit declared estimated 2014-15 7.10% 10% 2015-16 6.90% 10% 2016-17 7.00% 10% 2017-18 7.70% 11% 2018-19 8.50% 12% 2019-20 7.80% 11% 2020-21 11.30% 14% 2021-22 13.85% 18% 5.1 This is what leaves the assessee aggrieved in all these assessment years in identical terms.
We have given our thoughtful consideration to the assessee’s and the Revenue’s respective vehement submissions. Suffice to say, we make it clear that neither the assessee has been able to prove it’s very low gross profits computation at least in former six assessment years upto A.Y. 2019-20 nor the learned lower authorities appear to have even discussed any comparable segmental revenues whilst enhancing the same to @ 10% to 18% (supra). Faced with this situation and in the larger interest of justice, we are of the considered view that a lump sum GP estimation @8% or that declared at the rate of assessee’s behest hereinabove; whichever is higher, shall meet the ends of justice with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.
No other grounds or arguments have been pressed before us.