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Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGOUR
Before: SHRI SATBEER SINGH GODARA
2014, arise against CIT(A)-2, Nagpur Nagpur's Order in Appeal No.CIT(A)-2/69/2016-17/ITBA No.10199, dated 21.07.2020, in proceedings u/s.144 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties. Case file perused.
The Revenue pleads the following substantive grounds in the instant appeal :
“Whether on the facts and circumstances of the case and in law the CIT(A)-2, Nagpur was justified in deleting the addition
2 ITA.No.105/NAG./2020 made by estimating Gross profit @ 8.63% of turnover inspite of non production of the records before the AO by the Assessee. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-2, Nagpur was justified in deleting the addition made on account of disallowance u/s. 40(a)(ia) of the Income
Tax Act, 1961 inspite of the fact that no documents were produced before the AO for non deduction of TDS on interest payment. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-2, Nagpur was justified in deleting the addition made by disallowance of various expenditure amounting to Rs.1,36,03,446/-, inspite of the fact that principal of Res
Judicata is not applicable in the tax matters which was held in the case of Radhasoami Satsang Vyas by the Hon’ble Supreme
Court. 4. Any other grounds of appeal at the time of hearing of the appeal.”
3. It is next noticed that the Ld. CIT(A)'s detailed discussion reversing the assessment findings re-estimating it’s profits, reads as under :
3 ITA.No.105/NAG./2020 4 ITA.No.105/NAG./2020 5 ITA.No.105/NAG./2020
I have given my thoughtful consideration to the vehement rival stands against and in support of the CIT(A)'s impugned lower appellate findings deleting the impugned addition. I find no merit in the Revenue’s stand. This is for the precise reason that the Assessing Officer’s assessment herein dated 28.03.2016 had compared the assessee’s impugned book results vis-à-vis the corresponding figures in assessment years 2012-2013 and 2013-2014 and adopted 8.63% gross profit rate coming to average thereof, for making the addition herein of Rs.2,01,56,810/-. It has already come on record from the CIT(A)'s impugned detailed discussion that the assessee’s manufacturing unit was closed from October, 2013 resulting in the decline of not only in it’s profit rate but also a spike in 6 ITA.No.105/NAG./2020 the loss figures. Be that as it may, this is indeed coupled with the fact that the learned assessing authority had not found any other defect in assessee’s part in declaration of it’s book results of the relevant previous year. And that the CIT(A)'s order for A.Y.2014-15 on the very issue has not been disturbed till date. Faced with this situation, it is deemed appropriate that although the Revenue’s impugned first and foremost substantive ground does not deserve to be accepted in principle, it would indeed be in the larger interest of justice that a lump sum addition of Rs.2 lakhs only would be just and proper in these peculiar facts and circumstances. I order accordingly. Necessary computation shall follow as per law.
This Revenue’s first and foremost substantive ground stands partly accepted in above terms.
Coming to the Revenue’s latter twin substantive grounds seeking to revive sec.40(a)(ia) and other expenditure disallowance(s) involving varying sums; I find no merit therein in light of Indwell Constructions vs. CIT [1998] 232 ITR 776 (AP) that the same would not be applicable once the corresponding book results already stand rejected. It is reiterated here that I have already estimated the assessee’s income declared in preceding paragraph and therefore, these twin substantive grounds must fail. Ordered accordingly.
7 ITA.No.105/NAG./2020
This Revenue’s appeal is partly allowed in above terms.
Order pronounced in the open Court on 15.05.2024.