Atul Mohan Bhandari Vs DCIT (ITAT Pune)
Case Summary: The present case arose from an assessment order passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961 for Assessment Year 2023-24, wherein the assessee, engaged in the business of manufacturing automotive tubular components, CNC machining, steel tube cutting and trading of steel tubes, had declared a total income of Rs. 4.74 crore.
The case was selected for complete scrutiny primarily on account of an alleged mismatch between the turnover reported in the Income Tax Return and the turnover disclosed in GSTR-9C. During the assessment proceedings, the Assessing Officer issued notices under Section 133(6) to various sundry creditors. Based on the replies received from certain parties and non-response from others, the AO observed discrepancies in creditors’ balances and rejected the books of account. Thereafter, without disproving the correctness of the books through any independent inquiry, the AO estimated the assessee’s net profit at 7.5% by relying upon general market information and made an addition of Rs. 3.61 crore as additional business income.
Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The CIT(A) confirmed the addition. Thereafter, the assessee filed a further appeal before the Income Tax Appellate Tribunal, Pune Bench.
