Chinmastika Sidhartha (JV) Vs ITO (ITAT Patna)
The Income Tax Appellate Tribunal (ITAT), Patna, has remitted the case of Chinmastika Sidhartha (JV) vs. ITO back to the Assessing Officer (AO), directing a fresh examination of the assessee’s books of account. The decision provides the assessee, a joint venture, with a new opportunity to present evidence after the lower authorities had rejected its books and estimated its income.
The dispute arose during the Assessment Year 2015-16. The assessee, a joint venture company, had filed a tax return showing a total income of nil. The case was selected for scrutiny, and the AO discovered that while the assessee had received significant contract receipts, it had also paid out a substantial portion of that amount to its members. Citing the assessee’s failure to produce supporting documents for its books of account, the AO rejected them under Section 145(3) of the Income Tax Act. The AO then estimated a net profit of 6% on the total contract receipts of over ₹2.36 crore, adding more than ₹14 lakh to the assessee’s taxable income.
Aggrieved by this action, the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)]. However, the appeal was dismissed ex-parte, as the assessee reportedly failed to appear or present the required documents.
