Assessee cannot claim 8% profit rate under section 44AD after showing higher margins and suppressing turnover

The ITAT Mumbai upheld the AO's decision to apply 20% profit rate on suppressed sales discovered during assessment. The assessee, who had consistently shown profits between 17.36% to 20.58% in current and preceding years, attempted to claim 8% profit rate under section 44AD for admitted turnover. The tribunal rejected this contention, ruling that the assessee cannot adopt contradictory positions after admitting higher profit margins and suppressing turnover. The CIT(A)'s confirmation of 20% profit percentage on detected suppressed sales was upheld, with the appeal decided against the assessee.

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Issues:
1. Condonation of delay in filing appeal due to unavoidable circumstances.
2. Dispute regarding addition of 20% of suppressed sales by Assessing Officer.
3. Appeal against the order of the Commissioner of Income Tax (Appeals) regarding assessment year 2014-15.

Issue 1: Condonation of Delay
The Appellant sought to condone a 124-day delay in filing the appeal, citing reasons such as the death of the Appellant's brother and the engagement of the Income Tax Practitioner in family matters. The Revenue opposed, alleging the delay was malafide. The Tribunal, considering the reasons beyond the Appellant's control, relied on the principle of substantial justice over technicality, condoning the delay based on the Supreme Court's precedent in Land Acquisition Collector vs. MST Katiji & Others.

Issue 2: Addition of Suppressed Sales
The Assessing Officer added Rs. 14,80,125 (20% of suppressed sales) to the Appellant's income, despite the Appellant's contention of applying 8% profit under section 44AD of the Income Tax Act. The Commissioner of Income Tax (Appeals) upheld the addition, noting the Appellant consistently declared profits near 20%. The Tribunal affirmed the decision, stating the Appellant cannot claim a lower profit percentage after admitting higher turnover and suppressing sales.

Issue 3: Appeal Against CIT(A) Order
The Appellant challenged the Commissioner of Income Tax (Appeals) order confirming the Assessing Officer's addition. The Tribunal reviewed the orders, submissions, and relevant facts. Considering the consistent profit percentages declared by the Appellant and the suppression of sales, the Tribunal upheld the CIT(A)'s decision, dismissing the appeal for lack of illegality or perversity in the findings.

In conclusion, the Tribunal dismissed the appeal, upholding the Commissioner of Income Tax (Appeals) decision regarding the addition of suppressed sales to the Appellant's income for the assessment year 2014-15. The Tribunal emphasized the importance of maintaining consistency in profit declarations and rejected the Appellant's attempt to claim a lower profit percentage after admitting higher turnover and suppressing sales.

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