Adworld Communications Pvt. Ltd. Vs DCIT (ITAT Jaipur)
Income Tax Appellate Tribunal (ITAT), Jaipur bench, has partially allowed an appeal filed by Adworld Communications Pvt. Ltd. against an order from the Commissioner of Income Tax (Appeals) [CIT(A)] concerning the assessment year 2011-12. The dispute centered on the estimation of the company’s income by the tax authorities after rejecting its book results.
The case originated from an assessment order dated December 24, 2018, which followed a notice issued under section 148 of the Income Tax Act, 1961, for the assessment year 2011-12. The assessment was triggered after a survey action under section 133A revealed that the company had not filed its income tax return for the year, despite having total business receipts amounting to Rs. 7,96,67,680/-.
In response to the section 148 notice, Adworld Communications Pvt. Ltd. filed a return on April 25, 2018, declaring a total income of Rs. 1,49,170/-. This declared income represented a net profit rate of approximately 0.187% on the reported gross receipts.
The Assessing Officer (AO) found the declared income and the company’s accounts unsatisfactory. Key reasons cited for the dissatisfaction included the failure of the assessee to produce a cash book, bill vouchers, and the inability to verify numerous cash expenses and payments made via self-created vouchers. Furthermore, the AO noted that despite the company’s turnover exceeding the threshold requiring a tax audit under section 44AB of the Act, no such audit had been conducted.
