R.H. Agro Overseas Private Limited Vs ACIT (ITAT Delhi)
The cross appeals in this case arise from Assessment Years 2013-14 and 2014-15, concerning different orders of the CIT(A) dated 20.11.2017 and 29.01.2020, stemming from the Assessment Orders dated 15.03.2016 and 30.12.2016 passed by the Assessing Officer (AO) under Section 143(3) of the Income-tax Act, 1961. The primary issues relate to the estimation of profits by the AO and the alleged rejection of the assessee’s books of account under Section 145(3) of the Act.
The AO had estimated gross profits at 10% despite the assessee declaring a gross profit of 1.98% and net loss of 7.71% in the trading segment. The CIT(A) reduced this addition to Rs. 10.98 crores, partially allowing the assessee’s appeal. The assessee contended that the rejection of books of account was unwarranted because there existed reasonable cause for non-production during assessment proceedings, as many documents were inaccessible due to the factory being sealed by banks over outstanding liabilities. Supporting records such as day-to-day stock registers were filed, and the accounts were audited with no discrepancies noted. The assessee emphasized that the declared gross and net profits were better than those accepted in the previous year (AY 2013-14).
