SHOBHIT MALHOTRA,RAMPUR vs. ITO, ITO- RAMPUR

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ITA 6925/DEL/2025Status: DisposedITAT Delhi23 December 2025AY 2017-2018Bench: Sh. Satbeer Singh Godara (Judicial Member)2 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal observed that the lower authorities failed to discuss segmental GP or comparable instances while assessing the assessee at a 5% GP rate. Considering the larger interest of justice, the Tribunal deemed a lump sum assessment of the assessee's GP at 1.5% to be just and proper for the given facts, with the rider that this specific assessment should not be treated as a precedent in any other case.

What were the facts?

The assessee's appeal for AY 2017-18 arose from reassessment proceedings under Section 147 of the Income Tax Act, 1961. The lower authorities assessed the assessee's total receipts in kachha arhatia business at Rs.3,68,17,312/- by applying a 5% Gross Profit (GP) rate, which resulted in an addition of Rs.15,07,342/-. The assessee was proceeded ex-parte as no one appeared on their behalf.

What were the issues?

The key legal issue was the appropriate gross profit rate to be applied to the assessee's kachha arhatia business receipts in reassessment proceedings under Section 147, especially when lower authorities failed to consider segmental GP and comparable instances.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. Satbeer Singh Godara

Hearing: 23.12.2025Pronounced: 23.12.2025

ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/M/250/2025-26/1080362187(1) dated 04.09.2025, in proceedings u/s 147 of the Income Tax Act, 1961 (in short “the Act”).

2.

Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte.

3.

It next emerges during the course of hearing with the able assistance coming from the Revenue side that the assessee/appellant is aggrieved against both the learned lower authorities’ action assessing his total receipts in kachha arhatia business of Rs.3,68,17,312/- @ 5% resulting in addition of Rs.15,07,342/-; made in assessment order dated 21.02.2025 as upheld in the lower appellate discussion.

1.

Shobhit Malhotra 4. That being the case, learned departmental representative could hardly dispute that both the lower authorities have nowhere discussed the segmental GP and comparable instances whilst assessing the assessee @5% in question. It is thus deemed appropriate in the larger interest of justice that a lump sum assessment of assessee’s GP @ 1.5% in the given facts would be just and proper with a rider that the same shall not be treated as a precedent in any other case. Necessary computation shall follow as per law.

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