TaxTMI 
TaxTMI 
2024 (7) TMI 894
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....ay be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount disputed. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 343/JP/2024 is taken as a lead case. 4. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. 343/JP/2024 on the following grounds; "1. Under the facts and circumstances of the case the ld. CIT(A) is not justified in Estimating the Net Profit of Rs. 17095760/- by applying NP rate of 5% on Estimated Gross Receipts of Rs. 341915196/- against net Profit of Rs. 3710130/- as per Audited Profit & Loss Account. 2. Under the facts and circumstances of the case the ld. CIT(A) is not justified in sustaining the Separate Addition of Rs. 317048/- towards Income from Interest and commission. 3. Under the facts and circumstances of the ld. CIT(A) is not justified in sustaining the Separate A....
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....ed in the show cause notice as fair and reasonable estimate of income. Accordingly, the net profit of the assessee's business comes to Rs. 2,88,00,000/- @ 8 % on turnover of Rs. 36,00,00,000/-. 5.3 Besides as per information available on record, the assessee had also earned Income from interest & commission at Rs. 3,17,048/- and Income from rent at Rs. 2,21,800/-, details of which were also not provided by the assessee, the same was also added in the profit so estimated. Accordingly total income of the assessee was determined at Rs. 2,93,38,850/-. 6. The assessee challenged the finding of the assessing officer before the ld. CIT(A). The appeal of the assessee was allowed in part by the ld. CIT(A). The relevant finding of the ld. CIT(A) is reproduced here in below: "6. DECISION: The order u/s 144 rws 147, statement of facts and the submission furnished by the appellant have been considered. 6.1. The appellant's case was decided by the Commissioner of Income Tax (Appeals)-3, Jaipur vide order dated 28/03/2019. The appeal was dismissed as the appellant had not paid the advance tax payable by the appellant for AY 2014-15. The Hon'ble ITAT observed th....
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....the case of the appellant was treated as case with no books of accounts and the Net Profit is assessed @ 8% of the gross receipts. The gross receipts, after excluding rent, interest and commission/brokerage of Rs 5,38,848/- the business receipts deposited in the bank were computed at Rs 34,19,15,196/- However, the gross receipts from business were estimated at Rs 36,00,00,000/- to include any cash receipts which the appellant might not have deposited in the bank. The business income of the appellant was estimated @ 8% at 2,88,00,000/- and the other income of Rs 5,38,848/- was added to the same The appellant has raised two substantive grounds of appeal wherein the appellant has averred that there was no justification in estimating the profits @ 8% of the estimated gross receipts and that the net income from interest income & commission was wrongly assessed at Rs 5,38,848/-. The appellant has submitted written submission dated 04/12/2023 on 04/12/2023, 6.3. In the submission dated 04/12/2023, the appellant claims that it was maintaining regular books of accounts which were duly audited. The audited Balance Sheet, Profit & Loss Account and schedules thereto were e-filed as pr....
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....ll affect the power of the [Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub- section (1) of section 251 or the imposition of penalty under section 271. The following issues arise. - (i) The appellant claims to have been prevented by sufficient cause from producing the evidence which is relevant to any ground of appeal. The sufficient cause is stated to health reasons of the Director of the assessee company and his wife. In this regard, it is noted that the appellant has not produced any evidence whatsoever to prove that the Director who was normally instrumental in the finalisation of books of accounts and financial statements was suffering from an illness which prevented him from filing of return of income from the due date for AY 2013-14 i.e. 31/10/2014 till the completion of the re-assessment proceedings on 28/12/2017. Similarly, no....
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....lar books of accounts on the basis of which the Financial Statements were drawn. Hence, the application of the appellant to submit the documents as additional evidence in terms of Rule 46(1)(c) of the Income Tax Act is hereby rejected. 6.4 The appellant has also taken exception to the estimation of the receipts and net profit. On going through the assessment order, it is seen that it was found that the total deposits from business in the Bank Accounts of the appellant were Rs 34,19,15,196/-i.e. aggregate of deposits in bank account as reduced by the commission and interest received (342454044 - 538848) It has been further observed that, "Considering the circumstances & fact there may have been cash sale which may have not been deposited in the bank a/c. Thus total bank receipts & other receipts are estimated at Rs 36,00,00,000/- in-spite of Rs 34,19,15,196/- There is no discussion regarding the circumstances and the facts of the case which lead to the conclusion that there was some cash sale which was not deposited in the bank account. Thus, the estimation on the higher side is on the basis of surmises and conjectures and there is no material on record to support such esti....
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....es claimed and to produce books of accounts along with subsidiaries, the ends of justice would be served by adoption of the net profit @ 5% as against the rate of 8% adopted earlier. Hence, the profit of the appellant is estimated at Rs 1,70,95,760/-. The ground of appeal is decided accordingly. 6.5. In the second ground of appeal raised, the appellant has contested the addition of the commission and interest over and above the estimated profits of the business. It is seen that while estimating the turnover the commission and interest were reduced from the gross deposits in the bank accounts on the premise that the interest & commission received were part of deposits in the bank account. The income of the appellant from the business was computed @ 8% on the turnover estimated at a figure of Rs 25.00 crores. However, the revised computation of the business turnover is the figure of total deposits in bank account as reduced by the receipts from interest & commission. The profit is computed on the balance amount. The appellant has not explained the nature of commission and interest received and the expenses incurred thereon. Therefore, no case is made out for allowing any exp....
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....self and his wife, could not could not participated in relevant assessment proceedings. 6. The AO vide impugned assessment order dated 28.12.2017 estimated Net Profit of the assessee by applying NP Rate @8% on estimated Gross Receipts of Rs. 360000000/-and made separate Additions towards Interest, Commission and Rental Income and thus assessed Total Income of Rs. 2,93,38,850/-. 7. The assessee preferred appeal before ld. CIT(A)-III Jaipur against the relevant assessment order dated 28.12.2017. 8. The ld. CIT(A)-III Jaipur observed that the assessee has not deposited the Self Assessment/Advance Tax as provided u/s 249(4)(b) of IT Act, therefore vide order dated 28.03.2019 dismissed the appeal of the assessee as un admitted (PB No.5-7) 9. The assessee after depositing the requisite Amount of Tax Equivalent to Advance Tax as provided u/s 249(4)(b) of IT Act 1961, preferred appeal before this Hon. Bench.(PB No.8-12) 10. This Hon. Bench vide order dated 30.07.2021 set aside the matter to the file of the ld. CIT(A) with the directions to verify and consider the payment of taxes towards due discharge of the assessee's liability as per provision....
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....plication dated 31.07.2017 filed during the course of assessment proceedings drawn attention of the AO towards illness of Director of the company, therefore the same cannot be ruled out.(Para 3 on page No.2 of the assessment Order.) 3. The assessee has submitted the copy of the Audit Report E-filed on 02.09.2013 on the Income Tax Portal (PB No.42-50), therefore relevant finding of ld. CIT(A) is contradictory to documents available on record ande perverse. 4. The Challan towards filing Fee of Financial Statements before Registrar of Companies is generated after filing of the relevant documents, therefore the ld CIT(A) is not justified in holding that the same cannot be treated as acknowledgement for filing of the Financial Statements and existence of the same. 5. The additional Evidences submitted by the assessee goes to the root of determination of correct Income of the assessee, therefore ld. CIT(A) is not justified in rejecting the application for admission of the same on technical/perverse considerations. Ground No.1,2, and 3: 6. The assessee has disclosed Net Profit of Rs. 3710130/- as per Audited Books of Accounts and corresponding ....
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....fore ld. CIT(A) 1-4 2. Order dated 28.03.2019 of ld. CIT(A) in original Appellate Proceedings 5-7 3. Self Assessment Tax Deposit Challans 8-12 4. Order Dated 30.07.2021 of this Hon. Bench in original Appellate Proceedings. 13-24 5. Application u/r 46 A of IT Rules 1962 before ld. CIT(A) in Set aside Appellate Proceedings, for admission of Additional Evidences 25-26 6. Audited Balance Sheet and Profit & Loss Account along with Schedules. 27-40 7. Receipt dated 25.10.203 of E- filing of Audited Statements with Registrar of Companies dated 25.10.2013. 41-41 8. Audit Report in Form No.3CA and 3CD e filed on Web Site of IT Department dated 02.09.2013 42-50 9. Computation of Total Income on the Basis of Audited Balance Sheet and Profit & Loss Account. 51-51 9. The ld. AR of the assessee vehemently argued that the assessee was running in financial difficulty, without payment of the self-assessment tax the assessee was unable to file the return. The assessee filed the additional evidence before the ld. CIT(A) under rule 46A(1)(c) and the same was placed in the paper book filed by the assessee [ page 25-26]. As re....
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.... in the normal course of the business. The Books of Accounts are written on the basis of subsidiary record consisting of sale bills, purchase bills. expense bills/vouchers, cash receipts issued, record of stock and bank statements. In absence of books of accounts and the subsidiary record, the financial statements have no evidentiary value. Therefore, by themselves the Financial Statements do not constitute evidence or additional evidence as contemplated u/r 46A of the Income Tax Act. Hence, on the basis of the aforesaid discussion it is found that the appellant has not given any plausible reason for failure to produce any of the documents in the re-assessment proceedings which are now sought to be produced as additional evidence. Furthermore, the appellant has also not submitted any evidence to show that the documents sought to be produced are primary evidence which have any bearing on the computation of income done by the assessing officer on the basis of estimation of the gross turnover and the profit margin or which would dislodge the finding that appellant was not maintaining regular books of accounts on the basis of which the Financial Statements were drawn. Hence, t....
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....ited accounts and Tax audit report were made available even though the return of income was not filed by the assessee. The reasons for non-filling the return were explained and accepted in the first round of litigation. Now the issue in this round of litigation whether considering the nature of business and activities being carried out the estimation of profit @ 5 % is correct while assessing the income of the assessee or not. As argued by the ld. AR that considering the facts and circumstances of the case and considering the profit of the past the estimation of profit by the ld. CIT(A) is much higher side. The bench considered the overall aspect of the matter, since the dispute relates to the estimation of profit, we have considered the certificate of Chartered Accountant produced, wherein the profit rate is certified based on the records already available in the form of audited accounts for A.Y 2009-10 to 2014-15. The year under dispute relates to A.Y 2013-14, the previous two years net profit declared are more or less similar to the year under consideration. As it is seen that in the A.Y 2012-13, net profit was @ 1.10% whereas in the year under consideration, turn over has incre....