NAZIMA SADIQUE RAKHANGE,RATNAGIRI vs. INCOME TAX OFFICER, WARD 1, RATNAGIRI

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ITA 106/PUN/2024Status: HeardITAT Pune27 March 2024AY 2017-18Bench: SHRI SATBEER SINGH GODARA (Judicial Member)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the 15% estimation by lower authorities lacked clarity and was not based on any specific business line or comparables. Therefore, a lumpsum Gross Profit estimation of 11% was deemed just and proper.

What were the facts?

The assessee's appeal for AY 2017-18 was against an order that estimated Gross Profit at 15% on cash deposits. The lower authorities had made an addition of Rs. 3,85,839/- based on this estimation.

What were the issues?

The primary issue was the arbitrary estimation of Gross Profit by the lower authorities without proper justification or basis. The lack of clarity on the estimation percentage was also a key concern.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE “SMC” BENCH : PUNE [VIRTUAL HEARING]

Before: SHRI SATBEER SINGH GODARA

Hearing: 14.03.2024Pronounced: 27.03.2024

Date of Hearing : 14.03.2024 Date of Pronouncement : 27.03.2024 ORDER PER SATBEER SINGH GODARA, J.M. :

This assessee’s appeal for assessment year 2017-18, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No.ITBA/APL/S/250/2023-24/1058218423(1), dated 24.11.2023, involving proceedings u/s.144 of the Income Tax Act, 1961 (in short “the Act”). Case called twice. None appears at assessee’s behest. She is accordingly proceeded ex-parte.

2.

It is noticed with the able assistance coming from the Revenue side that both the learned lower authorities have assessed Gross Profit @15% on estimation basis qua assessee’s cash deposits of Rs.25,72,263/-made in the relevant previous year. The impugned addition comes to Rs.3,85,839/-

2 ITA.No.106/PUN/2024 Nazima Sadique Rakhange therefore. Learned NFAC has affirmed the same in the lower appellate proceedings.

3.

Mr. Nayak vehemently argued that both the learned lower authorities have rightly estimated the assessee’s cash deposits representing the sale proceeds in the regular course of her business. He could hardly dispute that, there is no clarity as to on what basis, they have estimated the addition @15% as neither there is any reference to assessee’s line of business nor any comparables quoted. Faced with this situation, it is deemed appropriate in larger interest of justice that a lumpsum Gross Profit estimation of 11% only would be just and proper since the assessee has also not able to rebut the same by way of filing relevant evidence. Necessary computation in light of 11% Gross Profit estimation shall follow as per law.

4.

In the result, this assessee’s appeal is partly allowed in very terms.

Order pronounced in the open Court on 27th March, 2024.

Sd/- [SATBEER SINGH GODARA] JUDICIAL MEMBER Pune, Dated : 27th March, 2024 Satish

3 ITA.No.106/PUN/2024 Nazima Sadique Rakhange

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