9911796707
TMI Blog2025 (1) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee can justify such expenses, we deem it appropriate to restore this issue to the file of the Jurisdictional AO for de novo adjudication after considering the submissions and details as may be filed by the assessee after granting opportunity of being heard to the assessee. The assessee is directed to furnish all the details/evidence as may be sought by the AO for complete adjudication of this issue and also duly cooperate in the assessment proceedings. With the above directions, the impugned order is set aside and the grounds raised by the assessee and the Revenue are allowed for statistical purposes. - Shri Om Prakash Kant, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Satish Mody For the Revenue : Shri Raj Singh Meel, Sr. DR ORDER PER SANDEEP SINGH KARHAIL, J.M. The assessee and the Revenue have filed the present cross-appeal challenging the impugned order dated 22.05.2024, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [ learned CIT(A) ], for the Assessment Year 2017-18. 2. The assessee s appeal is delayed by 31 days. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in estimating the business income of the assessee at 3.30% of the total turnover for the year concerned which is Rs. Rs.4,79,47,053/- against the AO's estimation at 5.59% without bringing on record any cogent reasoning or material to substantiate the basis? 2. Whether the Ld. CIT (A) erred in ignoring the fact that the AO has brought on record the comparable companies to estimate the net profit at 5.59% of the total turnover for the year concerned as business income of the assessee and the same has not been rebutted by the Ld. CIT (A)? 3. Whether the Ld. CIT(A) erred in giving benefit of doubt to the assessee on the issue of rejection of books on basis of non-genuine expenses, ignoring that these expenses were not satisfactory explained by the assessee with sufficient reason and the same would be contradictory to the facts of the case? 4. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in estimating the business income of the assessee at 3.30% of the total turnover for the year concerned which is Rs. 4,79,47,053/- against the AO's estimation at 5.59% without appreciating that the AO has given exhaustive basis in the assessment order for rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee s books of account are not reliable. The AO further held that despite several opportunities, the assessee has not come forth to justify and substantiate the transactions reflected in its books of account and the book results as per the financial statements. Accordingly, the AO proceeded to reject the books of account filed by the assessee and the net profit of 0.33% declared by the assessee during the year under consideration. By considering the companies engaged in similar business, viz. Chika Overseas Pvt. Ltd. Hitech Specialities Solutions Ltd., the AO computed the net profit of the assessee for the year under consideration at 5.59%. Since during the year under consideration, the assessee declared a total turnover of Rs. 14529.41 lakh, by applying the aforesaid net profit rate of 5.59%, the AO computed the business income of Rs. 8,12,19,000/- as taxable during the year under consideration. 8. In its appeal before the learned CIT(A), the assessee submitted that in the year under consideration the assessee decided to indulge in the physical trading of goods and started physically importing the goods into India and clearance under its own name. Therefore, the same nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had to appoint many commission agents in order to facilitate sale of goods during AY 2017-18 in which Rs. 1,82,61,592/- was incurred towards payment of commission of goods while there was no any expense claimed by the appellant during AY 2016-17. 7.11 As the commercial activities grew during AY 2017-18, the appellant had to incur more overheads like travelling, legal and professional expenses, transportation outward, stationery printing, insurance charges and other related overheads in which the total expense was Rs. 3,84,14,393/- as compared to Rs. 2,29,143/- during AY 2016-17. 7.11 As the commercial activities grew during AY 2017-18, the appellant had to incur more overheads like travelling, legal and professional expenses, transportation outward, stationery printing, insurance charges and other related overheads in which the total expense was Rs. 3,84,14,393/- as compared to Rs. 2,29,143/- during AY 2016-17. 9. After considering the submission of the assessee, the learned CIT(A) vide impugned order, though agreed to the fact that the nature of business of the assessee has drastically changed to a physical trader and thus is responsible for the huge expenses incurred by it, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven an opportunity the assessee can duly explain the increase in expenditure compared to the earlier years. 11. From the perusal of the record, it is evident that the assessee did not respond to the last two notices issued by the AO seeking various details in respect of the expenditure claimed by the assessee. We further find that before the learned CIT(A) the assessee tried to explain the nature of the expenditure incurred by it during the year under consideration, however, the learned CIT(A) without pointing out any specific deficiency in such evidence upheld the conclusion of the AO in rejecting the books of account of the assessee. In light of the submissions of the assessee that all the bills and vouchers of the expenses are available with the assessee and the assessee can justify such expenses, we deem it appropriate to restore this issue to the file of the Jurisdictional AO for de novo adjudication after considering the submissions and details as may be filed by the assessee after granting opportunity of being heard to the assessee. Further, the assessee is directed to furnish all the details/evidence as may be sought by the AO for complete adjudication of this issue and als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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