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Facts
The assessee's appeal for AY 2010-11 arose against the order of the CIT(A)/NFAC, Delhi. The proceedings involved section 143(3) r.w.s. 147 of the Income-tax Act, 1961. The Assessing Officer rejected the assessee's books of account and estimated profit at 8%, making an addition of Rs. 452708/-. Additionally, the AO made an addition of Rs. 41,34,600/- on account of sundry creditors.
Held
The Tribunal noted that the assessee's books of account had been rejected and a 8% profit was estimated in preceding terms. Citing the case of Indwell Constructions vs. Commissioner Of Income-Tax, the Tribunal held that no other revenue item could be disallowed/added in such a circumstance. Therefore, the addition on account of sundry creditors was deleted.
Key Issues
Whether the addition of sundry creditors was justified when the assessee's books of account were already rejected and profit was estimated.
Sections Cited
143(3), 147
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Income Tax Appellate Tribunal, AGRA BENCH, “DB” AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
This assessee’s appeals for assessment year 2010-11, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1056821256(1) dated 05.10.2023 involving proceedings under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
The assessee pleads the following substantive grounds in the instant appeal:
1. 1. That in the facts and circumstances of the case the learned AO erred in rejecting books of a/c and further mistaken in estimating profit @ 8% of total contractual receipt and made addition of Rs.452708/-. The learned CIT(A) also erred in confirming the same.
2. That the learned AO grossly mistaken in addition entire sundry creditors of Rs.41,34,600/- all though books of account were rejected and learned CIT(A) also mistaken in confirming the same.
3. That the other grounds shall be raised at the time of hearing.
4. Learned counsel representing assessee is indeed very fair in not pressing for assessee’s former ground herein. Rejected in very terms.
5. Next comes the second substantive issue between the parties regarding sundry creditors. The Revenue could hardly dispute that the assessee’s books already stand rejected since he has been assessed @ 8% in preceding terms.
6. That being the case, we hereby quote Indwell Constructions vs Commissioner Of Income-Tax, 232 ITR 776 (AP) that any other revenue item could not be disallowed/added in such a circumstance. We thus delete the impugned sundry creditors’ addition of Rs.41,34,600/- in very terms. Ordered accordingly.
7. No other ground or arguments has been pressed before. 2 | P a g e