UJJAL DAS ,BURDWAN vs. ITO, WARD - 1(3), BURDWAN , BURDWAN

The assessee in the present case is an individual, who is carrying on the business under the name and style of his proprietary concern M/s. Ulex Computer. The return of income for the year under consideration was filed by him on 14.10.2010 declaring total income of Rs.2,44,430/-. The case of the assessee was selected for scrutiny and a notice under section 143(2) was issued by the Assessing Officer to the assessee on 26.09.2011. The said notice as well as the notices issued by the Assessing Assessment Year: 2010-2011 Ujjal Das Officer subsequently under section 142(1), however, remained un- complied with by the assessee. The Assessing Officer, therefore, was left with no option but to complete the assessment to the best of his judgment under section 144 on the basis of material available on record. In the assessment so completed vide an order dated 12.03.2013, the Net profit of the assessee’s business of retail sale was estimated by the Assessing Officer at Rs.9,86,235/- by applying a Net Profit rate of 5% as stipulated in section 44AF on the gross receipts of Rs.1,97,24,693/- and after making a further addition of Rs.9,13,568/- on account of commission income received by the assessee from Lenovo, the total income of the assessee was determined by the Assessing Officer at Rs.18,99,803/-.

Against the order passed by the Assessing Officer under section 144, an appeal was preferred by the assessee before the ld. CIT(Appeals) and keeping in view the non-compliance on the part of the assessee during the course of assessment proceedings as well as during the course of remand proceedings, the ld. CIT(Appeals) dismissed the appeal of the assessee and upheld the action of the Assessing Officer in estimating the income of the assessee at Rs.18,99,803/-. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

I have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the ld. Counsel for the assessee, the gross receipts of the assessee for the year under consideration being Rs.1.97 crores, the provision of section 44AF is not applicable and the Net Profit rate of 5% specified in the said provision cannot be applied to estimate the income of the assessee. He has also contended that keeping in view the Net Profit rate of 0.71% and 0.85% declared by the assessee for A.Y. 2009-10 and 2011-12, a Net Profit rate of 1% to 2% can be applied to estimate the income of the assessee and no separate addition can be made on account of commission income as the Assessment Year: 2010-2011 Ujjal Das same was forming part of the turnover of the said business. The ld. D.R., on the other hand, has contended that the income of the assessee was estimated by the Assessing Officer by applying a Net Profit rate as the assessee failed to produce the books of account maintained by him regularly. He has contended that if the books of account are regularly maintained by the assessee and the same are also duly audited as claimed by the assessee, the assessee may be directed to produce the same for verification before the Assessing Officer so that true and correct income of the assessee can be assessed without resorting to any estimation. We find merit in this contention of the ld. D.R. and since the ld. Counsel for the assessee has also agreed to produce the books of account and other documents, which are necessary for the purpose of assessment, I set aside the impugned order passed by the ld. CIT(Appeals) and restore the matter to the file of the Assessing Officer with a direction to make the assessment afresh after examining/verifying the books of account and other relevant documents claimed to be regularly maintained by the assessee.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on April 22, 2019.