2024 (7) TMI 497 - AT - Income Tax

Addition being 20% of suppressed sale - apart from the suppressed sale the assessee shown 20% profit element on the claimed turnover during the year under consideration and during the year and preceding years the assessee has consistently earned the profit @ 17.36% to 20.58% as shown - Assessee contended that since the assessee is not maintaining books of accounts his profit on the admitted turnover at the rate of 8% under section 44AD may be estimated. HELD THAT - We are of the considered view that when the assessee has himself claimed the profit at 20.58% during the year under consideration and 18.80% in the subsequent years and has suppressed the turnover which was detected by the AO, the assessee cannot be allowed to aprobate and reprobate in the face of admitted fact that the assessee has himself admitted turnover of Rs. 72,50,000/- during the year under consideration. So the Ld. CIT(A) has rightly confirmed the profit percentage of 20% for the year under consideration made by the AO. Decided against assessee.

Summary

Issues:
1. Condonation of delay in filing appeal due to unavoidable circumstances.
2. Dispute regarding addition of 20% of suppressed sales by Assessing Officer.
3. Appeal against the order of the Commissioner of Income Tax (Appeals) regarding assessment year 2014-15.

Issue 1: Condonation of Delay
The Appellant sought to condone a 124-day delay in filing the appeal, citing reasons such as the death of the Appellant's brother and the engagement of the Income Tax Practitioner in family matters. The Revenue opposed, alleging the delay was malafide. The Tribunal, considering the reasons beyond the Appellant's control, relied on the principle of substantial justice over technicality, condoning the delay based on the Supreme Court's precedent in Land Acquisition Collector vs. MST Katiji & Others.

Issue 2: Addition of Suppressed Sales
The Assessing Officer added Rs. 14,80,125 (20% of suppressed sales) to the Appellant's income, despite the Appellant's contention of applying 8% profit under section 44AD of the Income Tax Act. The Commissioner of Income Tax (Appeals) upheld the addition, noting the Appellant consistently declared profits near 20%. The Tribunal affirmed the decision, stating the Appellant cannot claim a lower profit percentage after admitting higher turnover and suppressing sales.

Issue 3: Appeal Against CIT(A) Order
The Appellant challenged the Commissioner of Income Tax (Appeals) order confirming the Assessing Officer's addition. The Tribunal reviewed the orders, submissions, and relevant facts. Considering the consistent profit percentages declared by the Appellant and the suppression of sales, the Tribunal upheld the CIT(A)'s decision, dismissing the appeal for lack of illegality or perversity in the findings.

In conclusion, the Tribunal dismissed the appeal, upholding the Commissioner of Income Tax (Appeals) decision regarding the addition of suppressed sales to the Appellant's income for the assessment year 2014-15. The Tribunal emphasized the importance of maintaining consistency in profit declarations and rejected the Appellant's attempt to claim a lower profit percentage after admitting higher turnover and suppressing sales.