2023 (12) TMI 1034 - AT - Income Tax

Estimation of income - bogus purchases - HELD THAT - Estimation of profit of the assessee @4% is reasonable - Therefore, direct the AO to estimate the profit of the assessee @4% instead of 5%. Grounds raised by the assessee are partly allowed.

Summary

Issues involved:
Condonation of Delay, Assessment of Profit Percentage

Condonation of Delay:
The appeal was filed with a delay of 346 days due to various reasons such as the appellant being unaware of the order of the Ld.CIT(A), advice from her ITP to approach a senior counsel only in November 2022, a scooter accident causing medical treatment and bed rest, and being informed about the appeal filing after her bank account was attached and frozen. The appellant had no malafide intention and requested condonation of delay. The Tribunal found a justifiable cause for the delay and admitted the appeal for hearing.

Assessment of Profit Percentage:
The appellant, engaged in retail liquor trade, filed a return for A.Y. 2014-15 with total income at Rs. 6,56,800/-. The AO passed an assessment order u/s 143(3) on 05.06.2017, assessing total income at Rs. 17,86,590/- with an addition of Rs. 11,29,791/- by estimating profit @5% on purchases put to sale. The CIT(A) dismissed the appeal ex-parte. The appellant raised grounds at the Tribunal, arguing that the profit estimation was arbitrary and should be at 3% based on precedents. The Tribunal, after hearing both parties, directed the AO to estimate the profit at 4% instead of 5%, partially allowing the appellant's appeal.

Separate Judgement:
No separate judgment was delivered by the judges.