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2022 (8) TMI 1023 - ITAT LUCKNOWEstimation of net profit - estimation of assessee turnover - Assessing Officer’s estimation of net profit rate at 8% - HELD THAT:- As in applying the net profit rate of 8%, arbitrarily and illegally ignored the history of net profit rates of the assessee himself. Undisputedly, in the immediately preceding assessment year 2013 – 14, the assessee’s case stands assessed in scrutiny assessment under section 143(3) of the I.T. Act, at a net profit rate of 0.172%, which has been accepted by the assessee. The Assessing Officer’s order was thus a result of complete non-reading of material documentary evidence in the shape of comparable case of the assessee’s own assessment order for assessment year 2013–14, non-applicability of res judicata to the income tax proceedings notwithstanding. It goes without saying that where the books of account have been rejected, the history of the case, of both earlier as well as succeeding assessment years, becomes the most relevant criterion for estimation of income. The transactions for assessment year 2013 – 14 having not been found to be a sham or malafide, the ld. CIT(A) has correctly applied that year’s net profit rate of 0.172% to the year under consideration. CIT(A) has duly taken into consideration the afore-discussed shortcomings in the assessment order. It cannot, as such, be said that the ld. CIT(A) did not give any reasonable cause for deleting the addition, or that he did not point out any discrepancy in the view expressed by the Assessing Officer in his order. - Decided against revenue.
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