TMI Blog2021 (11) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case that turnover of the assessee is increased, the estimation of 10% Gross Profit will meet the possibility of Revenue leakage and would meet the end of justice, therefore, we direct the AO to estimate the Gross Profit @10%. Penalty u/s 271(1)(c) - HELD THAT:- There is no dispute that AO while passing the assessment order under section 143(3) on 16.02.2015, made addition by rejecting books of accounts and thereby made addition on estimation basis by estimating Gross Profit @10.31%. The AO levied penalty on the said estimated additions. We find that similar penalty were levied in earlier years i.e. 2009-10, 2010-11 and 2011-12. The same was deleted by the ld.CIT(A) and on further appeal before the Tribunal, the order of ld.CIT(A) was upheld. - Decided against revenue. - ITA Nos’.21/SRT/2017 & ITA No.571/SRT/2018, ITA No.191/SRT/2019 - - - Dated:- 1-11-2021 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Assessee : Shri Bharat Jhaveri Advocate For the Revenue : Shri Deependra Kumar Sr.DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. These three appeals out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is well-know, the assessee get more work. Moreover, there is a tough competition in the business of assessee and margin is very less. There is increase in the cost of raw material during this financial year. The assessee also explained that they are maintaining day to day purchase register as well as job receipt register. It is not possible to maintain day to day stock register as there are hundreds of colour chemicals. The assessee is maintaining inventory of stock item at the end of accounting year. The reply of the assessee was not accepted by the AO. The AO held that assessee has given a general reply in response to show cause notice. The AO rejected the books of accounts and estimated the Gross Profit @10.31% by following the order of earlier years ,thereby the AO made addition on account of low Gross profit of ₹ 38,40,763/-. On appeal before the ld.CIT(A), the action of AO was upheld. Further aggrieved, the assessee filed present appeal before this Tribunal. 3. We have heard the submission of learned authorised representative (ld.AR) of the assessee and the learned senior departmental representative (ld. Sr.DR) for the Revenue and have gone through the orders of auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts after giving proper show cause notice. The AO reasonable estimated the Gross Profit @10.31% as per the order of Tribunal in earlier years. 5. We have considered the rival submission of both the parties and have gone through the authorities below. In our view, a very narrow controversy is involved in the present appeal. There is no doubt that assessee Gross Profit was estimated @10.31% in A.Y. 2010-11 to 2012-13. For the year under consideration, the assessee has declared Gross Profit @8.38%. The assessee claimed that in the immediately preceding year the Gross Profit percentage was Nil and the profit of assessee increase substantially and it should be accepted as it is. We find that the Gross Profit of the assessee has been consistently adjudged being estimated @10.31% in preceding years. It is a matter of fact that there cannot be any consistent Gross Profit for several years. And on perusal of comparative chart of gross profit, we find that business of assessee in terms of turnover has increased from ₹ 14.64 crore in A.Y. 2012-13 to ₹ 19.87 crore in the year under consideration. The assessee claimed that incidental cost and cost of raw material is increased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Before, us the ld. AR for the assessee undertook to be vigilant and to appeal before the ld. CIT(A). We, instead of going into controversy, whether the assessee defaulted in attending the proceedings before the ld. CIT(A). We find that the order of the ld. CIT(A) is not in accordance with mandate of section 250(6) of the Income Tax Act. Section 250(6) of the Act mandates that the Ld. CIT(A) while deciding the appeal is required to pass order on various grounds of appeals, decision therein on and reasons for such decision. Therefore, considering the facts and circumstances of the case, the appeal of the assessee is restored back to the file of the ld. CIT(A) to decide all the grounds of appeal on merit in accordance with law. The assessee is directed to appear before the ld. CIT(A) as and when the date of hearing is fixed and to provide all necessary evidence and information without any further delay and not to seek the adjournment without any valid reasons. Accordingly the ground of appeal by assessee is allowed for statistical purpose. 11. In the result, appeal for the A.Y. 2014-15 of the Assessee is allowed for statistical purpose. ITA No.191/SRT/2019 for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 2011-12. The ld.AR further submits that it is settled legal position under the law that no penalty under section 271(1)(c) is levieable on estimated addition. 17. We have considered the rival contention of both the parties and perused the order of Lower Authorities. There is no dispute that AO while passing the assessment order under section 143(3) on 16.02.2015, made addition by rejecting books of accounts and thereby made addition on estimation basis by estimating Gross Profit @10.31%. The AO levied penalty on the said estimated additions. We find that similar penalty were levied in earlier years i.e. 2009-10, 2010-11 and 2011-12. The same was deleted by the ld.CIT(A) and on further appeal before the Tribunal, the order of ld.CIT(A) was upheld in A.Y. 2010-11 in ITA No.2936/AHD/2016 dated 23.03.2018 and A.Y. 2009-10 in ITA No.3146/AHD/2015 dated 08.01.2018 and in A.Y. 2008-09 ITA No.1686/AHD/2015 dated 09.01.2018. Considering the fact that penalty was levied on estimated additions, it is settled position under the law that no penalty under section 271(1)(c) is leviable of such estimated additions, therefore, we uphold the order of ld.CIT(A) and in deleting the penalty. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
