2024 (7) TMI 1184 - AT - Income Tax

Estimation of Gross profit - undisclosed receipts - CIT(A) deleted the addition made on gross receipt as the assessee company never filed the Return of Income for the A.Y. 2012-13 - As per DR assessee herein has neither filed any return for the impugned assessment year nor had he disclosed the turnover in question which saw light of the day only as per verification of 26AS detail - Assessee drawn strong support from the CIT(A)-NFAC s foregoing detailed discussion terming the impugned addition is as a case of double assessment, than estimating GP @ 20% only. HELD THAT - Neither there is any rebuttal from the department side that the AO had made double addition of the impugned alleged undisclosed receipts nor could it deny the involvement of the corresponding expenditure incurred at the assessee s behest regarding the contractual services provided to the payee concerned. Faced with this situation, we are of the considered view that the AO could not have simply brushed aside the assessee s claim of corresponding expenditure which has been duly considered in the lower appellate discussion. We further wish to highlight the fact that even the Revenue s grounds are fair enough in not disputing correctness of the said expenditure items in it s instant lead appeal. Rejected accordingly.

Summary

Issues Involved:
- Appeal against the order of the learned CIT(A)-National Faceless Appeal Centre regarding assessment years 2012-2013 & 2015-2016.

Analysis:

Issue 1: Appeal ITA. No. 195/MUM./2024 for assessment year 2012-2013
1. The Revenue appealed against the deletion of the addition made on gross receipt as the assessee company did not file the Return of Income for the relevant year.
2. The CIT(A)-NFAC restricted the Assessing Officer's action by adding only 50% of the alleged undisclosed receipts due to double addition concerns, followed by estimating GP at 20%.
3. The appellant argued for the addition to be re-computed based on the actual receipts reflected in Form No. 26AS, which was lower than what the AO considered.
4. The appellant submitted additional evidences during the appellate proceedings, including expenses incurred, but failed to provide sufficient corroborative evidence for some expenses.
5. The AO was directed to re-compute the addition based on 20% of the correct undisclosed receipts amount, resulting in a reduced addition.
6. The Revenue's argument that the assessee did not file a return or disclose the turnover was countered by the CIT(A)-NFAC's finding of double assessment and consideration of corresponding expenditure.
7. The Tribunal found no merit in the Revenue's arguments and dismissed the appeal, emphasizing the importance of considering all relevant factors in determining the assessable income.

Issue 2: Appeal ITA. No. 190/MUM./2024 for assessment year 2015-2016
1. The second appeal for the assessment year 2015-2016 raised identical issues as the first appeal for 2012-2013.
2. Following the same reasoning and findings as in the first appeal, the Tribunal ordered the dismissal of this appeal as well.

Conclusion:
Both appeals against the CIT(A)-NFAC's orders for the respective assessment years were dismissed, emphasizing the need for a comprehensive assessment considering all relevant factors and evidence provided by the assessee. The Tribunal highlighted the importance of avoiding double assessments and ensuring accurate computation of the assessable income based on the actual receipts and expenses incurred.