AKM Associates Vs ITO (ITAT Delhi)
Assessee, in its first year of business, faced estimation of net profit @2% by AO. During appellate proceedings, Assessee furnished additional evidences before CIT(A), which were admitted and even subjected to remand proceedings. However, CIT(A) failed to adjudicate or record any finding on such additional evidences and mechanically sustained AO’s NP estimation @2%.
ITAT held that once additional evidences are admitted and remand report is called for, CIT(A) is duty-bound to deal with them by a reasoned order. Sustaining estimation without examining or discussing the evidences amounts to non-application of mind. Accordingly, Tribunal restored the matter to the file of AO to examine the evidences afresh and decide the issue in accordance with law after giving due opportunity to Assessee. Appeal allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee is preferred against the order of the Commissioner of Income Tax (Appeals)/NFAC, Delhi [herein after referred as “CIT(A)”] dated 03.10.2024 for the A.Y. 2022-23 in sustaining the additions made by the AO.
2. The Ld. Counsel for the assessee at the outset submitted that this is the first year of the business of the assessee and the assessee since could not provide certain documents before the AO at the time of assessment, those documents were furnished before the Ld.CIT(A) as additional evidences which the ld. CIT(A) did not adjudicate on additional evidences furnished by the assessee but sustained the net profit estimated by the AO @2% without adjudicating on the additional evidences furnished. Therefore, the Ld. Counsel for the assessee submitted that the matter may be restored to the file of the AO to examine the additional evidences, to which the Ld. DR has no serious objection.
