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Issues involved: Assessment of income based on profit rate, challenge to profit rate applied by Assessing Officer, past history of the assessee, comparison with earlier years, application of legal precedents.
Summary: The Appellate Tribunal ITAT Agra heard cross appeals against the order of the ld. CIT(A), Gwalior for the assessment year 2009-10. The assessee declared contractual receipts and net profit, but the Assessing Officer (AO) doubted the accuracy of the book results due to lack of complete vouchers for expenses. The AO applied a profit rate of 12.5% based on an ITAT Hyderabad Bench decision, resulting in an income determination of &8377; 1,27,98,840/-. The ld. CIT(A) reduced the profit rate to 6% after considering the past history of the assessee, leading to an estimated profit of &8377; 72,33,532/-. The assessee appealed against the 6% profit rate, while the Revenue appealed against the reduction from 12.5% to 6%. The ld. Counsel for the assessee argued for further reduction in profit rate based on past history and legal precedents, citing cases from Hon'ble M.P. High Court, Punjab & Haryana High Court, and Rajasthan High Court. The ld. DR supported the AO's order. After considering the submissions, the Tribunal found in favor of the assessee, noting that the issue was covered by previous orders in favor of the assessee for the same business. The Tribunal observed that the assessee's profit rate of 4.16% in the current assessment year was higher than in preceding years, where rates were around 2%. Referring to the history of the assessee and previous Tribunal orders, the Tribunal decided to maintain an addition of &8377; 2,50,000/- instead of applying a 6% profit rate. The departmental appeal was dismissed, and the assessee's appeal was partly allowed. In conclusion, the Tribunal upheld the decision to maintain an addition of &8377; 2,50,000/- instead of applying a 6% profit rate, based on the assessee's past performance and legal precedents.
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