The Tax PublishersITA No. 3497/Del./2017
2021 TaxPub(DT) 0703 (Del-Trib)INCOME TAX ACT, 1961
Section 143
Even though assessee did not file certain details called for by AO at assessment proceedings, but no basis was shown as to how the income of the assessee had been estimated by the AO. Further, the AO even while estimating the income did not reject the book results of the assessee and he did not also bring any material on record to justify higher estimation of income and even no comparable case or history of the assessee had been mentioned. Thus, it was a mere estimation of income without any justification and hence, the CIT (A) was justified in deleting such estimation.
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Assessment - Estimation of income - GP rate - Assessee failed to file certain details called for by AO
Assessee filed his return of income for relevant year under consideration. AO noted that there was non-compliance by the assessee in filing details and documents. He further, noted that in spite of providing various opportunities, no financial statements/Audit Report had been filed by the assessee. Since the assessee failed to file any financial statements, Audit Report and other details, except bank statements, the AO estimated the income of the assessee at Rs. 2,50,00,000 as against his returned income. However, CIT(A) deleted the said estimation as made by the AO and accepted trading results of the assessee. Aggrieved, Revenue was in appeal. Held: Even though the assessee did not file certain details called for by the AO at assessment proceedings, but no basis was shown as to how the income of the assessee had been estimated at Rs. 2.50 crores. AO even while estimating the income did not reject the book results of the assessee. Further, the AO did not also bring any material on record to justify higher estimation of income and even no comparable case or history of the assessee had been mentioned. Thus, it was a mere estimation of income without any justification. Further, the AO also referred to his order for preceding assessment year while making estimation of income, but the CIT (A) found that in preceding assessment year, the AO rejected the book results of the assessee and estimated the G.P. at 25%. However, in assessment year under consideration, there was a significant fall in the turnover of the assessee and also the AO did not reject the book results of the assessee. Further, the assessee disclosed G.P. at 24% during assessment year under consideration. Therefore, the CIT(A) considering the history of the assessee and nature of the business of the assessee correctly deleted the addition.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
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