PARMOD KUMAR,NEW DELHI vs. ITO WARD 45(2), NEW DELHI

PER KUL BHARAT, JM:

This appeal, by the assessee, is directed against the order of the learned

Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC),

Delhi, dated 14.09.2023, pertaining to the assessment year 2011-12. The assessee

has raised following grounds of appeal:

“1(1). The learned CIT (Appeal) failed to appreciate the submission made before him.

2 ITA No. 3104/Del/2023 (ii) That irrespective of the fact that the learned CIT(Appeal) reproduced the submission of the appellant in appellate order but in his decision has given the contrary factuals. 2(i). The learned CIT(Appeal) was not justified in confirming the estimation of profit @25% on receipts. (ii) The aggregated receipts ascertained by the learned A.O. is to be reduced by an amount of salary, inter transfer and contra entries. 3. That an estimation @ 25% is on very very higher side where the declared results @ 2% has been accepted in the earlier years. 4. The appellant is lawfully eligible to have the credit of TDS deducted by the deductors. 5. That the appellant craves his right to amend, delete or add any grounds of appeal at or before the time of hearing.”

that the assessment order was passed ex parte to the assessee. He submitted that the

assessee has been filing income-tax returns and declaring profit from business

carried out by him. He submitted that during the year under appeal the assessee

suffered brain hammarage and, therefore, he could not carry out the business. He

submitted that the AO on the basis of cash deposited in the bank account treated

the same as gross profit and applied 25% profit, thus added Rs. 49,83,916/- to the

income of the assessee. Aggrieved against this the assessee preferred appeal before

learned CIT(A), who also sustained the addition without making due inquiry in

respect of the nature of business and the past history.

3 ITA No. 3104/Del/2023 3. On the other hand, learned DR opposed the submissions and supported the

orders of authorities below.

The Revenue has not disputed the fact that the assessee has been filing his return of

income and during the year under consideration the return was filed in response to

the notice u/s 148 of the Act. However, the learned DR opposed this submission

that any return was filed in response to the notice u/s 148. However, the learned

counsel for the assessee has demonstrated that return was filed in the office of the

AO.

4.1 Considering the totality of the facts and the material placed before me, there

is no dispute with regard to the fact that the AO had applied profit rate @ 25% of

the gross receipts, meaning thereby the AO has treated the cash deposit into the

bank account as business receipts of the assessee. Hence, the AO, in my considered

view, ought to have examined the past history and the profit declared by similarly

situated assessees. Under these facts the orders of the authorities below cannot be

sustained. Hence, I hereby set aside the impugned order and restore the assessment

to the file of the AO to make assessment afresh, in accordance with law, after

making due inquiry regarding business carried out by the assessee and also take

into consideration the past history of the profit declared by the assessee. Needless

4 ITA No. 3104/Del/2023 to say, the AO will provide adequate opportunity to the assessee of being heard.

Grounds raised in this appeal are allowed for statistical purposes.

Order pronounced in open court on 29.12.2023.

Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI