Appellate Tribunal adjusts profit rate, allows appeal, considers industry standards and assessee's profit margins.

The Appellate Tribunal partially allowed the appeal by adjusting the profit rate applied to the undisclosed turnover, setting it at 1.25% instead of 8%, based on industry standards and the assessee's profit margins. The Tribunal also condoned the delay in filing the appeal, attributing it to genuine health reasons.

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Issues:
1. Delay in filing the appeal
2. Addition of undisclosed turnover by AO
3. Application of profit rate @8%

Issue 1: Delay in filing the appeal
The assessee appealed against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi for the AY 2017-18, citing a delay of 95 days in filing the appeal due to health reasons. The assessee submitted an affidavit affirming illness and incapacity during the period of delay. The Appellate Tribunal, after considering the reasons for the delay, condoned the delay and admitted the appeal for adjudication.

Issue 2: Addition of undisclosed turnover by AO
The AO observed cash deposits during the demonetization period in the assessee's bank accounts, leading to an assessment of undisclosed turnover. The AO added Rs. 42,08,115/- to the income of the assessee under Section 44AD of the Act, applying a profit rate of 8% to the undisclosed turnover of Rs. 5,26,01,438/-. The Ld. CIT(A) upheld the AO's decision, emphasizing the lack of proper records and evidence from the assessee to support lower profit margins claimed.

Issue 3: Application of profit rate @8%
The only contention in the appeal was against the application of the profit rate at 8%, deemed higher than the prevailing profit margins in the assessee's trade. The Appellate Tribunal noted that the assessee's business of jute bag trading typically had profit margins ranging from 0.75% to 1%. Considering the industry standards and the assessee's profit margins, the Tribunal set aside the Ld. CIT(A)'s order and directed the AO to apply a profit rate of 1.25% on the undisclosed turnover instead of 8%, partially allowing the appeal.

In conclusion, the Appellate Tribunal partially allowed the appeal, adjusting the profit rate applied to the undisclosed turnover based on industry standards and the assessee's profit margins, while condoning the delay in filing the appeal due to genuine health reasons.

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