Heena Irfan Bepari Vs ITO (ITAT, Pune Bench)
Wrong Sanctioning Authority, Reassessment Falls: ITAT Quashes ₹95.31 Lakh Addition at the Jurisdictional Threshold
Relevant Facts
The principal appeal concerned Heena Irfan Bepari, an individual engaged in purchasing non-breeding or non-milking buffaloes directly from weekly animal markets in different villages. She filed her return for AY 2017-18 on 31 October 2017, declaring total income of ₹7,73,490.
During reassessment, the AO noticed that the assessee’s profit & loss account reflected turnover of ₹11,02,17,911, while the returned income was only ₹7.73 lakh. Various notices were issued seeking an explanation regarding the income disclosed in relation to the substantial turnover.
According to the AO, the assessee failed to furnish an adequate explanation supported by valid documentary evidence. He therefore estimated business income at 8% of turnover & added the difference between the estimated profit & the income already disclosed. This resulted in an addition of ₹95,30,871.
The reassessment was completed u/s 147 read with section 144B on 23 May 2023, determining total income at ₹1,03,04,361. The CIT(A)/NFAC upheld the addition.
The assessee contended on merits that she maintained proper books of account, had them audited u/s 44AB & furnished the relevant details during assessment. She also pointed out that assessments for AYs 2018-19 & 2019-20, involving substantially similar business circumstances, had been completed by the faceless authority by accepting the book results without making comparable additions.
