CLASSONE EXPORTS PVT. LTD.,NEW DELHI vs. ITO WARD -6(2), NEW DELHI
Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWALClass One Exports Pvt. Ltd. Flat No.10, C ½ Model Town, Delhi-110009
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (the Act, in short) by the ld.
Commissioner of Income Tax (Appeals)-2 in Appeal No.10647/16-17
dated 12.03.2019 for Assessment Year 2014-15. 2. Brief facts of the case are that the assessee is private limited company and engaged in the business of trading in shares and securities. The return of income was filed on 30.09.2014 declared NIL income which stood processed. Thereafter, the case was selected for Class One Exports Pvt. Ltd. vs. ITO scrutiny through CASS and the assessment was completed vide order dated 30.12.2016 wherein the income under the head of business in profession was estimated on the turnover of Rs.31,28,79,852/- by applying profit rate of 2% and net addition of Rs.62,57,597/- was made in the hands of the assessee. Against such order the appeal was filed before Ld. CIT(A) who dismissed the appeal of the assessee. Thus, the assessee has preferred the appeal before the Tribunal by taking following grounds of appeal:-
“That on the facts and circumstances of the case the assessment order and the appeal order passed by CIT as well as by ITO is bad both on facts and in the eyes of law and deserves to be quashed.
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
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 juri ictional 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.”
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. 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 7. With regard to the estimation of the profit, it is seen that in the instant case, the assessee has entered into commodity transaction on NSEL platform and have claimed losses on such trading. The case of the assessee was treated as general trader by the AO and made estimation of profits. Looking to the facts that the transactions were done through NSEL in commodities, no such estimation could be made and the purchases and sales had duly reflected the real income of the assessee earned out of such transactions. Under these facts, the addition made by estimating the income of the assessee at Rs.62,57,597/- is contrary to nature of business and thus is hereby Order pronounced in open court on 25/02/2025. (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20/03/2025
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