TaxTMI 
TaxTMI 
2025 (9) TMI 276
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...., 1961 (hereinafter referred to as 'the Act'), dated 11.05.2024, which in turn arises out of an assessment order passed by Assessing Officer u/s 143(3) of the Act vide order dated 28.12.2017. 2. The grounds of appeal raised by the assessee are as follows: "1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as the "CIT(A)"] in confirming rejection of book results and thereby confirming the estimated addition. 3. Ld. CIT(A) erred on facts as also in law in retaining estimation of gross profit @ 10.05% as against returned loss 53.54% shown by the appellant and thereby con....
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....sideration, on total turnover of Rs. 2,53,48,115/-, the assessee has declared gross loss of Rs. 1,35,71,576/-, in place of gross profit. Despite opportunity availed by the assessee, no justification with regard to the gross loss declared, has been filed by the assessee. Therefore, a show cause notice u/s. 142(1) of the Act was issued on 18.12.2017 and duly served upon the assessee requiring to furnish its reply to the queries raised by the assessing officer. The operative part of show-cause notice is reproduced as below: " In preceding year i.e. 2014-15, on total turnover of Rs. 7,41,42,759/- you have declared gross profit at Rs. 14,30,998/- @ 10.05% whereas in A.Y, 2015-16 under consideration, on total turnover of Rs. 2,53,48,116/....
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....ns of Section 145(3) of the Act. The assessing officer observed that in the immediate preceding year, i.e. AY 2014-15, the GP was declared @ 10.05% at Rs. 74,50,998/-, against the total turnover of Rs. 7,41,42,759/-, whereas in the A.Y. 2015-16, the assessee has declared gross loss of Rs. (-)1,35,71,576/-, in place of gross profit against the total turnover of Rs. 2,53,48,115/- and the ratio of loss, as against the total turnover, during the year comes 53.54%. As discussed, the GP with regard to immediately preceding year i.e. AY 2014-15 was declared @ 10.05% and during the year it was declared @ (-)53.54%. Therefore, it is clearly seen that the assessee has declared the GP lower side by 63.59% [53.54% + 10.05%] during the year. Thus, GP @6....
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.... the returned GP loss of 53.54% to the estimated GP rate of 10.05%. In doing so, assessing officer had failed to appreciate that the estimation of GP ratio based on preceding years has already taken into account the unsubstantiated loss claimed and therefore no further addition is warranted thereon. In view of the above facts, addition based on estimated GP was restricted to 10.05%, by the Id. CIT(A), as against the rate of 63.59% adopted by the assessing officer. 7. Aggrieved by the order of Ld. CIT(A) the assessee is in further appeal before us. 8. Learned Counsel for the assessee, argued that addition based on estimated GP which was restricted by the Id. CIT(A) to 10.05%, is very higher side, as the assessee, during the year under ....
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...., and perused the fact of the case including the findings of the Id CIT(A) and other materials brought on record. The Ld. Counsel submitted before as following documents and evidences. Viz: (1) copy of acknowledgement of return, computation of Income and audit report along with audited financial statement; (ii) copy of reply dated 21.12.2017 filed before assessing officer; (iii) copy of acknowledgement of return and ITR form for AY 2016-17 and (iv) copies of acknowledgement of return of income for AYs 2017-18 to 2021-22. We have gone through the above documents and evidences submitted by the assessee, before the lower authorities. We find that profit estimated by the Id. CIT (A) is on higher side, considering the facts of the assessee's....