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Facts
The assessee filed an appeal against the order of the CIT(A) for AY 2013-14. The AO initially assessed income under Sec. 44AF, but the assessee had declared a net profit of only 0.83%. The CIT(A) noted that the turnover exceeded the threshold for presumptive taxation and estimated profit at 5%.
Held
The Tribunal held that since the assessee could not furnish sufficient documentary evidence for its profit margins and relevant bills/vouchers were not provided, the authorities were justified in estimating the income. The estimation of 5% by the CIT(A) was considered reasonable and could not be faulted.
Key Issues
Whether the CIT(A) was justified in estimating the income at 5% when the assessee could not provide sufficient documentary evidence for its declared profit margins.
Sections Cited
Sec. 44AF, Sec. 44AB, Sec. 143(3)
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Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: HON’BLE SHRI SATBEER SINGH GODARA, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 08-12- 2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 21-03-2016. Having heard rival submissions and upon perusal of case records, the appeal is disposed- off as under. 2. In the assessment order, Ld. AO invoked the provision of Sec.44AF and assessed income on presumptive basis at Rs.88.94 Lacs. The assessee had declared net profit of 0.83% only. The assessee filed elaborate written submissions during appellate proceedings which were duly considered by Ld. CIT(A). It was noted that the books were duly audited u/s 44AB. The turnover was above threshold limit of Rs.2 Crores and therefore, the presumptive provisions could not be applied to the case of the assessee. Considering the totality of fact, Ld.CIT(A) estimated profit of 5% and granted partial relief to the assessee. Aggrieved, the assessee is in further appeal before us.
From the facts, it emerges that the assessee could not furnish sufficient documentary evidences in support of its profit margins. The relevant bills and vouchers were not furnished. In such a situation, the authorities would be left with no option but to estimate the income of the assessee. The estimation of 5%, in our opinion, in assessee’s line of business is quite reasonable. The Ld. AR could not controvert the impugned estimation with concrete evidences. Therefore, the adjudication of Ld. CIT(A) could not be faulted with.
The appeal stands dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) �ाियक सद� /JUDICIAL MEMBER लेखा सद� / ACCOUNTANT MEMBER Dated: 28.03.2025 आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR
ITAT AGRA