Case Law Details
Sayqul Islam Vs ITO (ITAT Guwahati)
We note that assessing officer had not specifically identified any specific defects in the purported evidences and also taking note of the fact that the assessing officer has not held that the expenses so claimed by the assessee in his books of accounts were not incurred by the assessee for the purpose of its business. The assessee has produced all books of accounts, vouchers, bills and other documents but the Assessing Officer without pointing out any mistake and error in the bills/vouchers and in the books of accounts made addition @ 8% which was reduced by the ld CIT(A) to5%. It is also admitted fact that assessee`s books of accounts were not rejected by the assessing officer although these were not audited under section 44AB of the Act by a Chartered Accountant. We note that the AO could have ventured into estimation only after rejecting the books of accounts of the assessee u/s 145(3) and thereafter by best judgment assessment u/s 144 of the Act. Here in this case, the AO has not passed any order u/s 144 of the Act. The AO thus without rejecting the books of account of the assessee has gone for estimation on suspicion and conjectures that the assessee may be inflating its expenses and showing net profit ratio at a very low rate. Therefore, based on the factual position narrated above we find merits in the contention of the Counsel. Therefore, taking into account merits of the assessee`s case, as narrated above, in our opinion the ends of justice would be met, if a net profit rate of 2.50% is adopted. Thus, we direct the assessing officer to estimate the income @ 2.5% of the turnover which comes at Rs.5,58,999/-( 2.5% of Rs. 2,23,59,967).
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeal filed by the assessee, pertaining to assessment year 2014-15, is directed against the order passed by the Commissioner of Income Tax (Appeal)—1, Guwahati, in appeal no. 374494271250118/343, dated 07.02.2019,which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) /147 of the Income Tax Act, 1961 (in short the ‘Act’) dated 27/12/2017.
2. The grounds of appeal raised by the assessee are as follows:
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