CLASSONE EXPORTS PVT. LTD.,NEW DELHI vs. ITO WARD -6(2), NEW DELHI

(ASSESSMENT YEAR 2014-15) ITO, Ward-6(2) Class One Exports New Delhi. Pvt. Ltd. Vs. Flat No.10, C ½ Model Town, Delhi-110009 PAN: AAACC3806H (Appellant) (Respondent) Assessee by Sh. Ajay Kumar, Employee of Company Department by Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 25/02/2025 Date of Pronouncement 25/02/2025 O R D E R

PER MANISH AGARWAL, AM:

That the learned AO and learned CIT erred in the eyes of law and on facts while doing assessment on the basis of estimation by rejecting the books of accounts of the assesse without bringing out any discrepancy in the audited books of accounts.

That the learned AO and learned CIT erred in the eyes of law and on fact wherein the material collected on the back of the assessee. i.e., in the form of report of the inspector as mentioned in the assessment order was never been brought into the knowledge of the assessee inspite of specific request made to them in writing.

That the learned AO and learned CIT erred in the eyes of law and on fact wherein the material collected on the back of the assessee i.e., in the form of report of other comparable entities case engaged in same trader i.e., Capital Market Publisher India Put Ltd was never been brought into the knowledge of the assesse inspite of asking in written and illegally relied upon in the assessment order.

That the learned AO and learned CIT erred in the eyes of law and on facts while rejecting the books of accounts without any basis and merely on false and contradictory stands.

Class One Exports Pvt. Ltd. vs. ITO That the learned AO and learned CIT erred in the eyes of law and on facts while merely on doubting of trading with few party as doubtful without bringing any cogent evidence in support of their contention.

That the learned AO and learned CIT erred in the eyes of law and on facts while making the estimation of the income without putting any comparable cases of same trade and without bringing out on record any defect in the books of accounts.

That the learned CIT erred on facts and without application of mind wherein he hold that false fact in his order that purchases were not verifiable wherein the learned AO mentioned that sale with two parties were not verifiable which shows the learned CIT passed the order without appreciating the actual facts of the case. That the learned AO and CIT (A) erred in the eyes of law and on facts wherein rejecting the expenditure incurred by the company during the year. That the learned AO and CIT (A) erred in the eyes of law and on facts wherein it is the settled law when the books of accounts are rejected and estimation of income is done no other addition is allowed. That the learned AO as well as learned CIT appeal erred in the eyes of law and on facts wherein he failed to appreciate the fact that the independent enquiry conducted u/s 133(6) Of the income tax act, 1961 were duly served on parties and further such enquiries were duly complied by. All the documents as required by the learned AO during such proceedings were duly filed by those parties, No discrepancy in any record filed by them be noted by the learned AO. That the learned AO as well as learned CIT erred in law and on facts wherein declaring the purchases and sale doubtful and unverifiable but without bringing any adverse material to support his findings which is bad in law. That the learned AO as well as CIT erred in law and on facts wherein he ignored the assessment order passed u/s 143(3) of the Income Tax Act, 1961 of the supplier parties few of whom filed with the learned AO in which it has been held that they are doing the business of commodities In such situation without bringing any adverse material on record the finding of the learned AO are unlawful and hence the inference drawn merely on surmises and conjectures which is not tenable in the eyes of law.

Class One Exports Pvt. Ltd. vs. ITO That the learned AO as well as learned CIT erred in law and on facts wherein determining the income of the assessee on estimation basis without bringing on record any deficiency in the rates of the commodities traded by the appellant. That the learned AO as well as CIT failed to consider the audited books of accounts along with quantitative date wise stock register reflecting inflow and outflow of each and every inward and outward of stock. No discrepancy is found out by the learned AO in the stock register, therefore in presence of audited stock register and tax audit report rejection of books result is illegal and order is liable to be quashed. That the learned AO as well as CIT erred in law and on facts wherein rejecting part of books of accounts wherein it is the settled law there is no provision in income tax act to partly reject the books of accounts. That the learned AO as well as CIT erred in law and on facts wherein ignored the fact that the Assessing Officer accepted the transaction of sale and purchase with the same set of parties in subsequent years, then how the parties in preceding year may be doubtful and rule of consistency must be maintained. That the learned AO erred in the eyes of law and on facts wherein he imposed penalty u/s 271(1)(c) on the assessee wherein it is settled position of law by the jurisdictional higher authority Income Tax Appellate Tribunal Delhi benches that no penalty u/s 271(1)(c) can be imposed wherein income is estimated. This is without prejudice to the right of the appellant to claim that it had not filed any inaccurate particulars of income or concealed any income. The appellant craves and reserves its right to alter, add or modify any grounds of appeal or whole grounds of appeal before the final adjudication of this appeal by your honor. The appellant further submits that the detailed written submission will be filed at the time of hearing of this case.”

3. Since, the assessee has taken multiple grounds, however, all such grounds are roving around. The issue of estimation of income though assessee is trading in shares and commodities through online mode.

Class One Exports Pvt. Ltd. vs. ITO 4. Before us, the Ld. AR submits that the assessee is dealing in trading of shares and securities and commodities during the course of assessment proceedings, the AO has made enquiry from various parties from whom the assessee is transacted towards purchase and sales of shares and commodities. In response some parties have made compliance and in some cases, there was difference in the amount of purchases and sales. The Ld. AR submits that the Assessing Officer has failed to appreciate the nature of business of the assessee and treat him as normal trader in goods which is evident from the observations made in sub para 1 of para 6 of the order wherein the Assessing Officer has alleged that hire charges claimed was of only Rs. 47,197/- and of Rs.30,000/- as against sales on Rs.31,28,79,852/-. He further submit that AO also alleged that assessee has shown substantial stock of Chana, refined RBD palm oil, Sugar etc. but no details of the go-downs or business premises etc. was given. The Ld. AR submit that when the assesse has made transactions through stock exchange or through commodity exchange where the transaction were done online, the question of physical delivery has not arises. Further 2% of the profit rate is applied without their being any comparative case brought on record. He further submit that the assessee has provided all the necessary details and correct addresses of the parties, however, ld. AO ignored the same and merely on general observations that normally 2% net profit rate has declared on whole sale business, has applied 2% profit rate on the turnover related to such parties. The assessee itself in preceding assessment years has declared G.P from 0.31% to 0.07% and there Class One Exports Pvt. Ltd. vs. ITO was net loss during the same period. He, therefore, prayed that looking to the past history of the assessee no addition should be made.