What did the Tribunal hold?

The Tribunal upheld the lower authorities' orders, finding no infirmity in the addition made. The assessee failed to demonstrate that other entities in the same business had comparable net profit rates or that their past declared rates were accepted in scrutiny assessments.

The assessee's books of accounts were destroyed in a fire, leading the Assessing Officer to estimate income at 0.7% of turnover. The assessee argued for using their past net profit rates, which were comparable to the current year's rate.

What were the issues?

Whether the estimation of income by the Assessing Officer was justified when the assessee's books were destroyed, and if the assessee's past net profit rates could be used for estimation.

Sarawati Bai Lahoti, Gulbarga vs Inocome-Tax Officer, Gulbarga | ITAT Bangalore 2016

Income Tax Appellate Tribunal, BANGALORE BENCH ‘SMC’, BANGALORE

Before: SHRI A.K.GARODIA, ACCOUNANT MEMBER

For Respondent: Shri Naresh Saka, JCIT

O R D E R PER A. K. GARODIA, A.M.:

This appeal is filed by the assessee. This is directed against the order of learned CIT (A), Gulbarga (Kalaburagi) dated 30.06.2016 for A. Y. 2010 – 11.

The assessee has raised as many as 4 grounds but the only grievance of the assessee is about addition of Rs. 321,552/- made by the A.O. by estimating the income of the assessee @ 0.7% of turnover because the books of accounts could not be produced as the same were said to be destroyed in fire.

None appeared on behalf of the assessee in spite of notice sent by RPAD and there is not even any request for adjournment and hence, this appeal is heard ex parte qua the assessee. Learned DR of the revenue supported the order of CIT (A).

I have considered the facts of the case and gone through the orders of the lower authorities. As per the order of CIT (A), it is seen that the only request of the assessee before CIT (A) was this that instead of applying rate of net profit of other persons, the N. P. rate of the assessee in past should be adopted as per which, the N. P. rate of the present year of 0.46 % is at par with N. P. rate of 0.47 % in A.Y. 2008 – 09 and is better than the N. P. rate in A. Y. 2009 – 10 of 0.39%. I find that this is not a case of the assessee that other entities in same business are also having N. P. rate at par with the rate declared by the assessee. This is also not shown by the assessee that in any earlier year, the N.P. rate declared by the assessee was accepted by the A.O. in a scrutiny assessment. Hence, I feel that there is no infirmity in the orders of the authorities below and therefore, I decline to interfere.

In the result, the appeal of the assessee is dismissed.

Order pronounced in the open court on the date mentioned on the caption page.

SARAWATI BAI LAHOTI,GULBARGA vs. INOCOME-TAX OFFICER, GULBARGA

What did the Tribunal hold?

What were the facts?

What were the issues?

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