ASHOK KUMAR AGARWAL,GHAZIABAD vs. ITO, GHAZIABAD

PDF · subscribers
ITA 1540/DEL/2016Status: DisposedITAT Delhi12 July 2016AY 2008-092 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO cannot estimate the net profit without invoking the provisions of Section 145(3) of the Income Tax Act. Since Section 145(3) was not invoked, the AO lacked jurisdiction to make the estimated addition.

What were the facts?

The Assessing Officer (AO) estimated the assessee's net profit at 1% against the declared net profit of 0.25%. The assessee appealed this addition to the CIT(A) and then to the ITAT.

What were the issues?

Whether the AO has the jurisdiction to estimate net profit without invoking Section 145(3) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 145(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC-I”: NEW DELHI

Before: SHRI P.K.BANSAL

For Respondent: Shri Deepak Garg, Sr. DR
Hearing: 12/07/2016Pronounced: 12/07/2016

Assessee by : None Department by : Shri Deepak Garg, Sr. DR Date of Hearing 12/07/2016 Date of pronouncement 12/07/2016 O R D E R This appeal has been filed by the assessee against the order of the Ld. CIT(A) dated 01.12.2015. None appeared on behalf of the assessee.

I therefore decided to dispose off the appeal after hearing the Ld. DR.

2.

The assessee has taken as many as eight grounds of appeal. The only issue involved in the appeal filed by the assessee relates to the addition made on account of estimating the net profit.

3. I have heard the Ld. DR and carefully considered the submission made by the Ld. DR. I noted that in this case the AO estimated the net profit of the assessee @ 1% against the net profit shown by the assessee @ .25%. I noted that the AO has not invoked the provision of section 145(3). It is only the provision of section 145(3) which empowers the AO to determine the income of the assesee in the manner as laid down u/s 144. Without invoking the provision of section 145(3) in my opinion the AO does not have any jurisdiction to estimate the net profit of the assesee. In view of this fact I delete the addition of Rs. 7,54,811/- made by the AO by estimating the net profit.

4.

In the result the appeal filed by the assessee is allowed.

Order pronounced in the open court on 12/07/2016.

More judgments on Section 145(3)

All 3,640 judgments and leading authorities on Section 145(3) →

Recent GST High Court judgments

Search GST case law →