KRISHNA KUMAR AGARWAL,DEHRADUN vs. ITO, UTTRAKHAND

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ITA 3248/DEL/2015Status: DisposedITAT Dehradun12 January 2026AY 2011-12Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal partly allowed the appeal, estimating a lumpsum GP of 8% on the suppressed valuation of brick sales, considering the corresponding business expenditure. It also deleted all other additions/disallowances, including those under Section 40A(3), citing that no further disallowance is warranted after rejecting books under Section 145(3) and making a GP addition.

What were the facts?

The assessee's appeal for AY 2011-12 challenged the CIT(A)'s order upholding the re-estimation of suppressed valuation in brick sales and disallowances under Section 40A(3). The assessment was completed under Section 144, and the assessee's books were rejected under Section 145(3).

What were the issues?

The key legal issues were the re-estimation of suppressed valuation in brick sales without considering corresponding expenditure and the validity of disallowances under Section 40A(3) after the rejection of books of account and GP addition.

Which sections of the Income-tax Act were involved?

Section 144,Section 145(3),Section 40A(3)

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Income Tax Appellate Tribunal, DEHRADUN “DB” BENCH, DEHRADUN

Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL

For Appellant: Ms. Shilpa Gupta, CA
Hearing: 12.01.2026Pronounced: 12.01.2026
1.

This assessee’s appeal for assessment year 2011-12, arises against the Commissioner of Income Tax (Appeals)-II [in short, the “CIT(A)”], Dehradun’s order dated 20.03.2015 passed in case no. 173/CIT(A)-II/DDN/2013-14, involving proceedings under section 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

2.

Learned counsel vehemently argues at the outset that both the learned lower authorities have erred in law and on facts in re- estimating the assessee’s alleged suppressed valuation in sale of bricks to the tune of Rs.14,68,030/- in assessment order dated 07.03.2013 as upheld in the lower appellate discussion.

3.

That being the case, the Revenue could hardly dispute that both the learned lower authorities have added the assessee’s alleged suppressed valuation of sale of bricks without even considering the corresponding claim of business expenditure which ought to have been pleaded and proved by filing the relevant cogent evidence. Be that as it may, we are of the considered view that at this stage since much water has flown under the bridge, a lumpsum GP estimation @ 8% of the impugned addition amounting to Rs.14,68,030/- would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.

2. The Revenue next seeks to buttress the point that the learned Assessing Officer has disallowed the assesseee’s cash payments under section 40A(3) alleged unaccounted purchases and other

2 | P a g e business expenditure. We are of the considered view that given the fact that the assessee’s books of account has been rejected under section 145(3) followed by GP addition, no further disallowance/addition is found to be warranted going by Indwell Construction Vs. CIT (1998) 232 ITR 776 (AP). We thus delete all the remaining additions/disallowances made in the assessee’s hands in very terms.

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