ACIT Vs Kriti Nutrients Ltd. (ITAT Indore)
Ex-parte Assessment Diluted: ITAT Indore Upholds CIT(A)’s Relief in Kriti Nutrients Case
The Indore Bench of the ITAT dismissed the Revenue’s appeal and affirmed the CIT(A)’s order granting substantial relief to the assessee for AY 2021-22. The Tribunal held that the AO’s ex-parte assessment under section 144—marked by rejection of books, GP estimation, ad-hoc disallowances, and treating trade payables as unexplained—was unsustainable on facts and law.
Key findings:
- Book results could not be rejected mechanically: The assessee, a listed company maintaining SAP-based audited books, furnished quantitative records, explanations for GP fall (COVID impact, price volatility, export slowdown), and corroborative documents. The AO ignored material placed (including submissions via the grievance portal when the e-proceedings tab was deactivated).
- GP estimation unwarranted: CIT(A)’s restriction of GP to 4.75% (returned) was upheld; enhancement to prior-year averages without disproving books was unjustified.
- Ad-hoc disallowances deleted: Deletions of disallowances on sales promotion/commission, travel & conveyance, and foreign exchange loss were sustained as the AO failed to rebut evidence or establish non-genuineness.
- Trade payables not unexplained: Additions u/s 68 on sundry creditors were rightly deleted where confirmations, PANs, and subsequent payments were evidenced.
- Rule 46A complied with: Additional evidence admission was proper; the AO had adequate opportunity for remand but failed to respond.
Accordingly, the Tribunal upheld the CIT(A)’s deletions aggregating ~₹26.6 crore, emphasizing that ex-parte assessments must rest on cogent material and fair consideration of evidence, not presumptions or procedural lapses
FULL TEXT OF THE ORDER OF ITAT INDORE
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