SHUBHAM,BHAGALPUR vs. DCIT/ACIT, CENTRAL CIR-1, PATNA
Facts
During a survey, a stock variation of Rs.18,15,887/- was found for the assessee. The Assessing Officer applied a GP rate of 35.13% based on the previous assessment year's GP rate, which was confirmed by the CIT(A). The assessee was found to be non-cooperative before the CIT(A).
Held
The Tribunal considered the GP rates of the earlier four years (average around 26%) and the current year's GP rate (28.34%). In the interest of justice, the Tribunal directed the Assessing Officer to determine the GP rate at 30% for the stock shortage addition.
Key Issues
Whether the GP rate applied by the Assessing Officer/CIT(A) is justified, and if not, what should be the correct GP rate for the stock variation.
Sections Cited
Section not specified
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC BENCH”, PATNA
Before: SHRI GEORGE MATHAN
This is an appeal filed by the assessee against the order of the Id. CIT(A), Patna-3, dated 30.11.2023 for the assessment year 2019-2020. 2. None appeared on behalf of the assessee. Shri Ashwani Kumar, ld. Sr. DR appeared on behalf of the revenue.
It was submitted by the ld. Sr. DR that there was a survey on the premises of the assessee and in the course of survey variation in stock to an extent of Rs.18,15,887/- was found. It was the submission that the ld. Assessing Officer had adopted a GP rate @35.13% on the said variation. It was the submission that percentage of 35.13% was on the basis of GP rate disclosed by the assessee for the immediately preceding assessment year being A.Y.2018-2019. It was the submission that the ld. CIT(A) has also confirmed the same. It was the prayer that the order of the ld. CIT(A) and that of the ld. Assessing Officer should be upheld.
2
I have considered the submission of the ld. Sr. DR and perused the orders of the lower authorities. A perusal of the facts of the present case clearly shows that the assessee was non-cooperative before the ld. CIT(A) even multiple opportunities having been given by the ld. CIT(A). A perusal of the order of the ld. CIT(A), more specifically at page 4, shows that the GP rate of the earlier four years being AY 2015-16, 2016-17, 2017-18 & 2018-19 were submitted before the ld. CIT(A). The average of the GP rate for all the earlier four years shows that the same comes to nearly 26%. For the impugned assessment year, the assessee has shown GP rate @28.34%. This being so, in the interest of justice, I am of the view that the GP rate of the assessee in respect of shortage of stock should be determined at 30%. The Assessing Officer is directed to redo the addition in respect of GP rate on the shortage of stock by applying GP rate @30%.
In the result, appeal of the assessee is partly allowed. Order dictated and pronounced in the open court on 06/08/2025. (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER Kolkata; दिनाांक Dated 06/08/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to :
Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT आदेशािुसार/ BY ORDER, विभागीय प्रविविवि, आयकर अपीलीय अविकरण, पटना / DR, ITAT,
Patna गार्ड फाईल / Guard file.
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