Tribunal allows assessee's appeals for A.Y. 2009-10 & 2012-13, directs deletion of disallowances.

The tribunal partially allowed the assessee's appeals for A.Y. 2009-10 and 2012-13. For A.Y. 2009-10, the net profit was estimated at 5.2%, leading to the deletion of certain disallowances. The tribunal directed the deletion of disallowances under sections 43B and 40(a)(ia) and held that provisions for bad debts were wrongly disallowed. For A.Y. 2012-13, the tribunal directed the Assessing Officer to use the same 5.2% net profit rate instead of a 10% ad-hoc disallowance, resulting in a partial allowance of the appeal.

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Issues Involved:
1. Estimation of net profit and rejection of books of accounts for A.Y. 2009-10.
2. Disallowance of expenses and estimation of net profit for A.Y. 2012-13.

A.Y. 2009-10:
The case involved two separate appeals filed by the assessee against the orders of CIT (A)-2, Delhi for A.Y. 2009-10 and 2012-13. The Assessing Officer observed a decline in the profit ratio compared to previous years and rejected the books of accounts. The net profit was estimated at 6.5%, resulting in an addition of Rs. 4.07 crores. The CIT(A) estimated the net profit at 5.2% and confirmed certain additions. The tribunal found the estimation of profit at 5.2% reasonable, directing the deletion of certain disallowances. The tribunal further directed the deletion of disallowances made under sections 43B and 40(a) (ia) of the Act. Regarding provisions for bad and doubtful debts, the tribunal held that the lower authorities erred in disallowing them, directing the Assessing Officer to delete the disallowance.

A.Y. 2012-13:
For A.Y. 2012-13, the Assessing Officer disallowed 10% of expenses, which was confirmed by the first appellate authority. The tribunal noted that since the net profit rate of 5.2% was estimated for A.Y. 2009-10 and accepted by the revenue, the same rate should be adopted for A.Y. 2012-13. The tribunal directed the Assessing Officer to adopt the net profit rate of 5.2% instead of making ad-hoc disallowances of 10% of total expenditure. Consequently, the appeal for A.Y. 2012-13 was also partly allowed.

The stay petitions for both years were deemed unnecessary as the appeals had been decided. The tribunal's order was pronounced on 26.09.2018, partially allowing the appeals filed by the assessee for both assessment years.

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