SHREE GANESH TRACTOR,SEHORE vs. I.T.O. WARD 1, SEHORE

That on the facts and in the circumstances of the case and in law, the initiation of proceedings u / s * 0.147 of the IT Act is without jurisdiction and the issue of notice do not satisfy the judicial requirements of the law and, therefore, the assessment is bad in law and without jurisdiction hence the same be kindly cancelled.

That on the facts and in the circumstances of the case and in law, the learned lower authorities erred in their findings and not justified in rejecting the books of accounts of the appellant without providing reasonable opportunity and, therefore, the said unlawful and unjustified order be quashed and relief to be provided to appellant.

That on the facts and in the circumstances of the case and in law, the learned lower authorities erred in their findings and the estimating the sales at Rs. 13,00,00,000/- and Gross Profit @ 3.60 % and therefore, the said unlawful and unjustified order be quashed and relief to be provided to appellant for addition to gross profit to the tune of Rs. 17,49,945/-.

That on the facts and in the circumstances of the case and in law, F the learned lower authorities erred in their findings, and the lump sum disallowance of 20% of the expenses claimed is

That on the facts and in the circumstances of the case and in law, the learned lower authorities erred in their findings in making the addition on account of capital balance without providing reasonable opportunity and, therefore, the said unlawful and unjustified order be quashed and relief to be provided to appellant for Rs. 11,54,021/-.

The Assessee may kindly be allow to raise additional grounds either before or at the time of hearing of this appeal.”

Ld. AR of the assesse has submitted that the assesse is a partnership firm deriving income from the business of trading in tractors and spare parts. The assessee is maintaining regular books of account which are duly audited. The assessee filed return of income along with tax audit report u/s 44AB of the Act declaring total income of Rs.4,91,082/-. Ld. AR has submitted that the AO has passed ex-parte order u/s 144 and thereby made the addition on account of adoption of GP rate and thereafter on adhoc disallowance expenses @ 20%. He has pointed out that the assessee did not receive alleged notice issued by the AO therefore, assessee could not participate in the assessment proceedings resulting ex- parte order. The AO has made addition by adopting GP rate as well as adhoc disallowance of expenses which is highly arbitrary and unjustified. He has contended that when the assessee is Page 3 of 5

On the other hand, Ld. DR has not seriously objected if the matter is remanded to the AO for fresh adjudication.

We have considered rival submission as well as relevant material on record. The AO has passed ex-parte assessment order when there was no response on behalf of the assessee to the alleged notices issued by the AO. The AO has adopted GP at 3.60% and thereby made an addition of Rs.17,49,945/-. The AO then also disallowed 20% of the expenses on adhoc basis and then made the addition of Rs.13,58,320/-. Further the AO has also made addition of Rs.11,54,021/- on account of remuneration and interest paid to the partners. The assessee has explained that due to lack of service of the notices the assessee could not appear before the AO and filed the submission before the CIT(A) in support of the return income however, the CIT(A) has sustained the additions made by the AO on the ground that the assessee has failed to produce books of account as well as other relevant record for verification of the AO.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 02.04.2024.