SH. HARISH KUMAR BANSAL,CHANDIGARH vs. ADDL. CIT, CHANDIGARH

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ITA 206/CHANDI/2017Status: DisposedITAT Chandigarh06 August 2018AY 2009-102 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged the parties' agreement to determine profits at 10.5% on total turnover, directing the Assessing Officer to re-compute the profits accordingly. This was done to resolve the dispute regarding the GP rate estimation.

What were the facts?

A survey at the assessee's business premises revealed excess cash and stock, leading to a surrender. The Assessing Officer rejected the assessee's books of account due to a low GP rate and lack of proper documentation, estimating income at a higher GP rate.

What were the issues?

Whether the rejection of books of account and estimation of income by applying a higher GP rate was justified. The dispute centered on the correctness of the GP rate applied by the Assessing Officer and confirmed by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH’A’, CHANDIGARH

Before: SMT. DIVA SINGH & DR. B.R.R. KUMAR

For Appellant: Shri. Tej Mohan Singh
For Respondent: Smt. Chandrakanta
Hearing: 25/07/2018Pronounced: 06/08/2018

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH’A’, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA No.206/Chd/2017 Assessment Year: 2009-10

Sh. Harish Kumar Bansal Vs. The Addl. CIT SCF 151, Sector 26 Range V Chandigarh Chandigarh

PAN No. AESPB9775P

(Appellant) (Respondent)

Assessee By : Shri. Tej Mohan Singh Revenue By : Smt. Chandrakanta

Date of hearing : 25/07/2018 Date of Pronouncement : 06/08/2018

ORDER PER DR. B.R.R. KUMAR, A.M:

The present appeal has been filed by the Assessee against the order of

the Ld. CIT(A)-2, Chandigarh dt. 18/08/2016.

2.

In the present appeal Assessee has raised following grounds:

1.

That the Ld. CIT(A) has erred in law and facts in upholding the rejection of books of account in utter disregard of the explanation rendered which is illegal arbitrary and unjustified. 2. Without prejudice to the above, the Ld. CIT(A) has further erred in upholding the application of GP rate of 12.5% resulting in an addition of Rs. 9,96,443/- as against 9.35% declared by the assesee in utter disregard of the explanations rendered and as such the addition upheld is illegal, arbitrary and unjustified.

3.

Brief facts on the issue are that a survey was conducted at the business

premises of the assessee on 10/07/2008. As a result of survey excess cash, excess

stock of Rs. 25.23 lacs and other incriminating material was found and to cover

up these discrepancies, the assessee surrendered the same to tax. The Assessing

Officer noted that assessee has shown business loss in the return of income

declaring GP at 9.35% of total sales. On being confronted for low GP, assessee

did not give any satisfactory reasons and for the reasons that the assessee is not

maintaining any stock register, complete bills of purchases and expenses were

not found and failed to produce original bills and vouchers during the course of

assessment proceedings, the Assessing Officer held that books of account of the

assessee are not correct and therefore the income of the assessee was

estimated by applying GP rate of 12.50% on the sales of Rs. 3,18,22,249/- and an

addition of Rs. 9,96,443/- was made.

4.

During the appellate proceedings before the Ld. CIT(A), the assessee filed

additional evidences of valuation and quantitative details of the closing stock

which were forwarded to the Assessing Officer who replied in the remand report

that as per the audit report the assessee is not maintaining stock register and the

quantitative detail submitted as additional evidence have no credibility. Owing

to the reply of the Assessing Officer the Ld. CIT(A) confirmed the addition

determining the profit @12.50 %.

5.

Before us, during the hearing the Ld. AR argued that since it is a case of

estimation of profit from 9.35 % to 12.5% , a reasonable percentage of profit may

be determined. The parties are fairly agreed for determination of profits @10.5%

on the total turnover of the assessee. Hence, the Assessing Officer is hereby

directed to re-compute the profits accordingly.

6.

As a result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court.

Sd/- Sd/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated : 06/08/2018 AG Copy to: 1.The Appellant, 2. The Respondent, 3.The CIT, 4.The CIT(A), 5. The DR

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