M/S SANTOSH PRESERVATION (P) LTD.,ETAWAH vs. ITO-2(2)(5), ETAWAH

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ITA 657/AGR/2018Status: DisposedITAT Agra22 April 2025AY 2014-15Bench: HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL (Accountant Member)2 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found the addition of undisclosed trading receipts to be on the higher side and reduced it to Rs. 10 Lacs. For expenses, the disallowance was directed to be re-computed at 5%.

What were the facts?

The assessee, engaged in cold storage operations, failed to provide complete details of potatoes stored. The Assessing Officer estimated undisclosed trading receipts of Rs. 61.58 Lacs and made an ad-hoc disallowance of expenses.

What were the issues?

The primary issues were the estimation of undisclosed trading receipts from cold storage operations and the validity of ad-hoc disallowance of expenses.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, AGRA

Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

Pronounced: 22.04.2025

(िनधा�रणवष� / Assessment Year:2014-15) M/s. Santosh Preservation (P) Ltd. Income-tax Officer, बनाम/ Rail Mandi, Jaswant Nagar Ward 2(2)(5), Etawah. Vs. Etawah-206245. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AANCS-6321-A (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Anurag Sinha, Adv. – Ld. AR � थ�कीओरसे/Respondent by : Sh. Shailender Shrivastava – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 20-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2014-15 arises out of an order passed by learned Commissioner of Income Tax (Appeals)-2, Agra [CIT(A)] on 28-01-2017 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 30-12- 2016. Having heard rival submission, the appeal is disposed-off as under. The only ground urged by Ld. AR in the appeal is qua confirmation of addition of undisclosed trading receipts for Rs.61.58 Lacs and adhoc disallowance of expenses. The assessee earns income from cold storage operations for preservation of potatoes.

2.

Addition of undisclosed trading receipts 2.1 The assessee could not furnish complete details regarding potatoes kept / stored in cold storage. The total nikasiof potatoes was shown to be 234604 potato packets which were not accepted by Ld. AO. The Ld. AO estimated that 15% of nikasiwas sold by the assessee himself and considering market rate, Ld. AO estimated income of Rs.61.58 Lacs which was confirmed by Ld. CIT(A). 2.2 Upon perusal of factual matrix, it could be ascertained that the assessee furnished partial details only. However, considering assessee’s scale of operations, the said estimation, in our opinion, is on higher side. To settle the litigation, we estimate the addition of Rs.10 Lacs and delete the remaining addition. This ground stand partly allowed.

3.

Adhoc Disallowance of expenses 3.1 Considering estimation of 15% of nikasias trading goods for the assessee, Ld. AO disallowed 15% of loading / unloading expenses and interest on advances to farmers and made addition of Rs.6.34 Lacs. In view of our adjudication on trading goods, we direct Ld. AO to estimate the disallowance @5% and re-compute the income of the assessee.

4.

The appeal stand partly allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.

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