ACIT, CIRCLE-58(1), NEW DELHI V. RAJAN KUMAR, DELHI

ITA 1332/DEL/2020

AI Insights

The case involves an appeal by the Revenue against the CIT(A)'s decision, which reversed the Assessing Officer's addition of unexplained cash credits amounting to Rs. 14,19,67,778 under section 68 of the Income-tax Act, 1961. The CIT(A) had applied a Net Profit rate of 8% on the gross receipts of the assessee, Sh. Rajan Kumar, for the assessment year 2014-15, following a similar approach taken in the previous assessment year 2012-13. The Revenue contended that the CIT(A) erred in law and on facts by not adhering to the specific provisions applicable for the current assessment year. However, the Tribunal found no merit in the Revenue's appeal, noting the consistency in the application of the Net Profit rate across the two assessment years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473551 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL YADAV
• Assessee Lawyers: SAMYAK JAIN
• Keywords: Unexplained cash credit; Rejection of books of accounts; Bogus
• Section: 143(3); 68; 145

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.1332/Del/2020 Assessment Year: 2014-15 ACIT, Circle-58(1), New Delhi Vs. Sh. Rajan Kumar, 31, Vijay Block, Laxmi Nagar, Delhi PAN: CAAPK8381E (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This Revenue’s appeal for assessment year 2014-15, arises against the Commissioner of Income Tax (Appeals)-37 [in short, the “CIT(A)”], New Delhi’s order dated 17.01.2020 passed in case no. CIT(A), Delhi-37/10010/2016-17, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Assessee by Sh. Samyak Jain, Adv. Department by Sh. Sunil Yadav, CIT(DR) Date of hearing 24.03.2025 Date of pronouncement 28.03.2025 ITA No.1332/Del/2020 2 | P a g e 2. Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte. 3. The Revenue vehemently argues during the course of hearing that the CIT(A) herein has erred in law and on facts in reversing the Assessing Officer’s action making section 68 unexplained cash credits addition of Rs. 14,19,67,778/-; in course of assessment framed on 30th December, 2016, vide his impugned lower appellate discussion to this effect reading as under: “7.7 The case of the appellant for AY. 2012-13 was completed u/s 143(3) of the Act vide order dated 30.03.2015. The appellant had shown turnover of Rs.28,11,16,102/- on which GP rate @3.57% and NP rate@1.51% was shown. The AO found that the salary and wages shown are unverifiable and the purchases were held to be not genuine/bogus. The AO invoked the provisions of section 145 (3) of the Act and rejected the books of accounts. The AO estimated the NP rate@8% and made an addition of Rs.1,82,39,020/- to total income of the appellant. In appeal the action of the AO was upheld by the CIT(A) and addition made of Rs.1,82,39,020/- by applying NP rate@8% was confirmed. 7.8 In view of the facts and respectfully following the judgments outlined above in paras 7.2 to 7.7 of this order and after considering the written submissions of the Ld.AR as reproduced in para 5 of this order, I am of the opinion that the AO was not justified in adding 100% of receipts of the appellant as total income u/s 68 of the Act. The facts of the case of the appellant for the present assessment year are identical with the facts of the case of the appellant for A.Y. 2012-13. In AY. 2012-13, the AO had estimated income by applying NP rate @8%, which was confirmed by the undersigned as CIT(A). Therefore, following the decisions of the undersigned in the case of the appellant for AY. 2012-13 on identical facts, I am of the considered view that Net Profit @8% of the Gross receipts of Rs.14,51,14,495/- should be taxed as income of the appellant. Addition to the extent of Rs.1,16,09,160/- made by the AO is confirmed and consequent relief is allowed to the appellant. The AO is directed to recompute the income ITA No.1332/Del/2020 3 | P a g e by adopting NP rate @8% on Gross receipts. The Grounds of appeal no. 1, 2 and 3 are partly allowed.” 4. We have given our thoughtful consideration to both parties’ respective stands and perused the case file. We find no merits in the Revenue’s instant sole substantive grievance. This is for the precise reason that it has already come on record that the learned CIT(A) has gone by the Assessing Officer’s findings itself in the preceding assessment year 2012-13 assessing only NP rate @ 8% in the assessee’s case. The Revenue’s sole substantive grievance raised in the instant appeal does not pinpoint any distinction on facts or in law, as the case may be, which could take us to a different conclusion in the impugned assessment year. We thus find no reason to interfere with the learned CIT(A)’s above detailed discussion assessing only the NP rate @ 8% in the assessee’s alleged bogus sales entries in question. Rejected accordingly. 5. This Revenue’s appeal is dismissed. Order pronounced in the open court on 28th March, 2025 Sd/- Sd/- (ANNAPURNA GUPTA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28th March, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT ITA No.1332/Del/2020 4 | P a g e 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "