2017 (6) TMI 2 - AT - Income Tax

Discrepancies in the books of accounts - import purchases of 53,410 kg. not found recorded in the import register - AO has rejected books of accounts of the assessee and estimated gross profit at 10% in place of gross profit 3.8% shown by the assessee - Held that - We found that in the A.Y.2010-11, assessee has made GP of 4.55% in the year 2011-12, 4.02% and during the year under consideration at 3.87%. Looking to the amount of sale vis- -vis GP disclosed by the assessee, and deficiency pointed out by AO and reply filed by assessee needs to be considered afresh in the light of documentary evidences alleged to be filed before him. It is clear that AO has not properly appreciated the evidence filed before him. We found that CIT(A) has also not dealt with the issue on merit and has just relied on the findings of the AO without addressing the reply filed by the assessee and without considering the documentary evidence in support of the same. In the interest of justice and fair play, we set aside both the orders of the lower authorities and restore the matter back to the file of the AO for deciding afresh after considering the documentary evidence filed in support of the short comings pointed by him which was produced by learned AR during the course of hearing before us as well as before the CIT(A) during the appellate proceedings. Appeal of the assessee is allowed for statistical purposes.

Issues involved:
1. Rejection of the claim by the Commissioner of Income Tax (Appeals) without proper consideration.
2. Rejection of the books of accounts of the appellant under section 145(3).
3. Justification of estimating the income of the appellant on rejection of books of accounts.
4. Confirmation of the estimation of gross profit by the Commissioner of Income Tax (Appeals).
5. Addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals).
6. Failure to consider evidence produced by the appellant during appellate proceedings.
7. Treatment of income under the head Profits and Gains of Business and Profession instead of Income from Other Sources.
8. Levy of interest under section 234B.

Detailed Analysis:

1. The appellant contested the rejection of their claim by the Commissioner of Income Tax (Appeals), arguing that their claim was substantiated through various documents and written submissions. They contended that the rejection without addressing any aspect of the submissions was contrary to the law.

2. The appellant challenged the rejection of their books of accounts under section 145(3), asserting that the deduction was unjustified based on the circumstances of the case and requested acceptance of the book result.

3. The appellant disputed the justification for estimating their income after the rejection of books of accounts, alleging that the Commissioner of Income Tax (Appeals) overlooked evidence and provisions of the law requiring income determination based on the case facts.

4. The Commissioner of Income Tax (Appeals) confirmed the estimation of gross profit, leading to an addition to the appellant's income. The appellant sought deletion of this addition.

5. Another addition to the appellant's income, confirmed by the Commissioner of Income Tax (Appeals, was challenged by the appellant for deletion.

6. The appellant raised concerns about the failure to consider evidence during the appellate proceedings, arguing that their submissions and proof were not adequately reviewed.

7. The appellant requested a change in the treatment of income from Other Sources to Profits and Gains of Business and Profession, emphasizing the need for the claim to be accepted.

8. The appellant objected to the levy of interest under section 234B, seeking the deletion of the interest amount.

The detailed analysis of the judgment outlines the appellant's arguments, the authorities' decisions, and the reasoning behind the final decision to set aside the lower authorities' orders and remand the matter back to the Assessing Officer for a fresh decision after considering the documentary evidence provided by the appellant.

← Previous Next →