Jaswinder Singh Vs DCIT (ITAT Amritsar)
The ITAT Amritsar adjudicated appeals filed by the assessee against the order of the CIT(A)/NFAC dated 03.06.2025 concerning the assessment proceedings for the years covered by the connected appeals. The assessee, an individual carrying on retail liquor business through a proprietorship concern in Punjab, challenged rejection of its books of accounts and estimation of income by applying a 1% net profit rate.
For the relevant year, the assessee had filed its return declaring total income of Rs.94,13,460/-, including profit of Rs.63,70,099/- from the proprietary business. The business had gross turnover of Rs.139,17,92,236/- and declared net profit at approximately 0.46%. The assessment was completed under Section 143(3) of the Income-tax Act, 1961. The AO rejected the books under Section 145(3), citing, among other matters, non-maintenance of branch-wise sale bills, item-wise stock registers and salary registers, and the declaration of an “Ahata” licence fee without corresponding ancillary revenue. The AO initially applied a 1.50% net profit rate, resulting in an addition of Rs.1,45,06,784/-.
Before the CIT(A), the assessee challenged rejection of the books and the estimated profit. The CIT(A) upheld the rejection under Section 145(3) but, noting that a 1% net profit rate had been applied for the subsequent assessment year under similar facts, restricted the rate to 1%. The CIT(A) consequently sustained the estimated income at Rs.1,39,17,922/- and deleted the remaining addition of Rs.69,58,961/-, while directing that statutory depreciation of Rs.8,95,589/- be allowed.
