TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal reduces profit percentage under Income Tax Act, directs reassessment.</h1> <h3>Krishna Enterprises Versus ACIT, Circle-37 (1), New Delhi</h3> Krishna Enterprises Versus ACIT, Circle-37 (1), New Delhi - TMI Issues:1. Validity of assessment under Income Tax Act2. Compliance with provisions of sec 143(2) of IT Act3. Validity of reassessment proceedings under sec 147 of IT Act4. Mechanical satisfaction in sanction under sec 151 of IT Act5. Estimation of additional income6. Compliance with sec 145(1) of IT ActAnalysis:Issue 1: The appeal challenged the validity of the assessment under the Income Tax Act, claiming it was completed without complying with legal requirements, rendering it void ab initio. However, the representative later withdrew this ground.Issue 2: The appellant contended that the assessment under sec 143(3) of the IT Act was incomplete as it did not comply with sec 143(2) provisions. The representative withdrew this ground as well.Issue 3: The appellant argued that the reassessment proceedings initiated under sec 147 of the IT Act were flawed due to the Assessing Officer's lack of independent examination of the material. The CIT(A) upheld the proceedings, but the appellant sought their annulment due to procedural defects.Issue 4: The appellant challenged the mechanical satisfaction in the sanction under sec 151 of the IT Act, asserting it tainted the reassessment proceedings. However, this argument was not pursued further.Issue 5: The dispute centered on the estimated addition of Rs.24,87,067, with the appellant claiming the AO's estimation lacked basis and was arbitrary. The appellant argued that the estimation was unsustainable under sec 145(1) of the IT Act due to the absence of a finding on the reliability of the books of account.Issue 6: The appellant contended that the estimated addition was unsustainable as it violated sec 145(1) of the IT Act by not considering the reliability of the books of account. The appellant sought a reduction in the estimated profit percentage based on precedents and judgments.The Tribunal, after considering arguments and precedents, reduced the estimated profit percentage to 1% of aggregate credits, following a judgment of the Delhi High Court. Consequently, the appeal was partly allowed, and the Assessing Officer was directed to recompute the addition accordingly.
TaxTMI 