ITO Vs Sanjay Singh (ITAT Agra)
Summary: The Revenue filed two appeals for AY 2018-19 against orders of the CIT(A), NFAC. In the first appeal, the AO rejected the assessee’s books and estimated business income at 10% of turnover after making additions for opening capital, opening stock, sundry creditors and cash deposits. The CIT(A) deleted additions relating to sundry creditors, opening stock and cash deposits. ITAT Agra held that once the books were rejected and business income estimated, separate additions for those business items were not warranted, as they were reflected in the same rejected books and their separate addition would amount to double addition. In the second appeal, the AO had disallowed purchases of ₹225.96 lakh allegedly made from entities involved in input tax credit fraud/evasion and added ₹203.37 lakh after the 10% estimation. The Tribunal held that, having confirmed the CIT(A)’s approach in the first appeal, separate addition of bogus creditors/purchases was also not required once the books were rejected. Both Revenue appeals were dismissed.
Cases Discussed
- Malpani House of Stones vs. CIT (395 ITR 385) (Rajasthan High Court)
- Vijay Trading Co. vs. ITO (76 Taxmann.com 366) (Gujarat High Court)
FULL TEXT OF THE ORDER OF ITAT AGRA
