Case Law Details
Shri Raghubir Singh Vs ITO (ITAT Delhi)
A.O. has passed the ex-parte assessment order Dated 06.01.2014 under section 144 of the I.T. Act, 1961. The A.O. has recorded on several pages of the assessment order in non-compliance by the assessee and about the production of the books of account and other details. Some part details were submitted which were not sufficient to explain any of the issues. The A.O, therefore, in the absence of any explanation from the side of the assessee, made all the four additions. It is an admitted fact that assessee did not produce books of account, bills and vouchers before the authorities below and even same are also not produced before the Tribunal. Therefore, rejection of books of account is justified in the matter. The A.O. while estimating income of assessee, has applied net profit rate of 12%. However, Learned Counsel for the Assessee has filed chart of net profit rate for earlier year as well as subsequent years which shows that in subsequent assessment year assessee has declared 8.134% as net profit rate, however, in A.Y. under appeal, net profit rate is 3.014%. The assessee submitted before the Ld. CIT(A) that net profit rate of 7% may be applied as was also done by ITAT, Chandgarh Bench in the case of Sudershan Kumar Shekhar vs., ACIT ITA.No.101/Chd./2011. However, considering the non-cooperation from the side of the assessee and non-production of the books of account and that assessee declared net profit rate of 8.134% in subsequent assessment year, we are of the view that application of net profit rate of 12% by the authorities below is excessive and unreasonable. Therefore, considering the history of the assessee, we direct the A.O. to apply net profit rate of 8% against the total turnover and made addition accordingly.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-2, Gurgaon, Dated 09.02.2016, for the A.Y. 2011-2012.
2. Brief facts of the case are that return declaring income of Rs.6,11,170/- was filed on 13.09.2011. The assessee derives income from contract work. During the course of assessment proceedings, the A.O. asked the assessee to produce complete books of accounts along with details/documents as per questionnaire issued by him. The A.O. also asked the assessee to furnish evidence with regard to cash deposits of Rs.83 lakhs in savings bank account with Corporation Bank. The assessee failed to furnish the requisite details or produce books of accounts. The A.O. issued show cause notice as to why the income may not be estimated by taking net profit @ 12%. in spite of repeated opportunities and show cause notice the assessee failed to produce books of accounts, bills and vouchers and the requisite information. The AO accordingly estimated the income of the assessee by applying net profit rate of 12%. Addition of Rs.18,93,183/- was accordingly made. The AO further noted that as per the form 26AS, the income tax return filed by the assessee furnished the difference of Rs.5,74,637/- as per details of Form No.26AS. This discrepancy was also confronted to the assessee. The A.O. noted that as per the copy of the bank account of the assessee with State Bank of Bikaner and Jaipur, the assessee had received Rs.3 lacs on 08.07.2010 from M/s Om Track Builders and Rs.1,50,000/- on 15.07.2010 from M/s Shiv Ram Construction. These receipts had not been detected by the assessee in the receipts shown in the return. The A.O. asked the assessee to explain why addition of Rs.4,50,000/- may not be made on this account. In spite of opportunity, no reply was submitted by the assessee. The A.O. accordingly made an addition of Rs. 4,50,000/-.
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