RADHESHYAM TOSHNIWAL,KOLKATA vs. I.T.O., WARD - 44(2), KOLKATA, KOLKATA

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ITA 1248/KOL/2024Status: DisposedITAT Kolkata06 September 2024AY 2017-2018Bench: Shri Sanjay Garg (Judicial Member), Shri Rakesh Mishra (Accountant Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found the CIT(A)'s estimation of 20% gross profit to be unjustified as it lacked basis, comparative data, and ignored the assessee's books of account and past profit margins.

What were the facts?

The assessee appealed against the CIT(A)'s order which estimated profit at 20% of sales. The assessee argued that all necessary documents were provided, including audited reports and prior year profit details, showing a gross profit of 4.36%.

What were the issues?

Whether the CIT(A) was justified in estimating the profit at 20% of sales without proper basis and ignoring the assessee's submitted financial data.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH KOLKATA

Before: Shri Sanjay Garg & Shri Rakesh Mishra

order : September 06, 2024 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 10.05.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The sole issue raised in this appeal is relating to the estimation of profit @ 20% of the sales by the ld. CIT(A).

3.

At the outset, the ld. counsel for the assessee has invited our attention to the impugned order of the CIT(A) to submit that the ld. CIT(A) has not given any basis to estimate the profit @ 20% of the sales. The only reasoning given by the CIT(A) is that the assessee did not furnish the complete documentary evidence with respect to sale/purchase transaction. However, the ld. counsel for the assessee has brought to our attention to paper-book to submit that the assessee Assessment Year: 2017-18 Radheshyam Toshniwal has duly furnished all the requisite documents not only before the Assessing Officer but also before the ld. CIT(A). Even, the audited tax report was also furnished before the Assessing Officer though not along with the return but during the assessment proceedings. Even the assessee had also furnished the details of the gross profit/net profit of earlier years and demonstrated before the ld. CIT(A) that the gross profits during the year were at 4.36%, which were more than that of earlier year. The ld. counsel has further submitted that even the books of accounts have not been rejected and that the action of the ld. CIT(A) in estimating the gross profit @ 20% without any basis, was not justified.

4.

The ld. DR, on the other hand, has relied upon the findings of the CIT(A).

5.

Considering the rival submissions, we find that the action of the ld. CIT(A) in estimating the gross profit @ 20% without giving any basis and without even considering any comparative data, without rejecting the books of account and even ignoring the gross profits of the past years, cannot be held to be justified. In view of this, the action of the ld. CIT(A) in estimating the gross profit @ 20% is set aside and the Assessing Officer is directed to accept the gross profit/net profit as shown by the assessee in the books of accounts.

6.

In the result, the appeal of the assessee stands allowed.

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