BIJROL KHEDA SUCHIT MILK COLLECTION CENTER,SANCHORE V. INCOME TAX OFFICER, WARD-1, PALANPUR, PALANPUR

ITA 2172/AHD/2024

AI Insights

The case involves Bijrol Kheda Suchit Milk Collection Center, an association engaged in running a milk collection center, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The primary contention was the ex-parte order passed under section 250 of the Income Tax Act, and various other grounds related to the jurisdiction of the Assessing Officer, validity of the assessment, rejection of books of accounts, and estimation of business profit. The Assessing Officer had rejected the books of accounts due to lack of supporting documents for purchases and estimated the income at 5% of gross turnover. The CIT(A) upheld this decision, leading to the appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25829 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA
• Assessee Lawyers: ASSESSEE ADJOURNMENT APPLICATION FILED
• Keywords: Set aside; Rejection of books of accounts
• Section: 148; 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.2172/Ahd/2024 (Assessment Year: 2018-19) Bijrol Kheda Suchit Milk Collection Center, Kheda Jalore, Sanchore, Rajasthan-343041 Vs. Income Tax Officer, Ward-1, Palanpur [PAN No.AACAB2938H] (Appellant) .. (Respondent) Appellant by : Assessee (Adjournment Application Filed) Respondent by: Shri Ravindra, Sr. DR Date of Hearing 18.02.2025 Date of Pronouncement 20.02.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 26.10.2024 passed for A.Y. 2018-19. 2. The assessee has taken the following grounds of appeal:- “1. That on the facts and circumstances of the case, the ld. CIT(A), NFAC erred in passing ex-parte order u/s. 250 of the Act, the same is against the equity and natural justice and deserves to be set aside. 2. That on the facts and circumstances of the case, the ld. CIT(A), NFAC erred in dismissing the assessee's legal ground challenging the jurisdiction of the AO i.e. ITO, Ward-1, Palanpur who passed the order u/s. 148A(d) of the Act dated 31-03- 2022, without recording any concrete findings. 3. That on the facts and circumstances of the case, the ld. CIT(A), NFAC erred in dismissing the assessee's other legal grounds challenging the validity of the assessment whereby the assessee contended that assessment order dated 26-02-2024 ITA No. 2172/Ahd/2024 Bijrol Kheda Suchit Milk Collection Center vs. ITO Asst.Year –2018-19 - 2– passed without appreciating true and corrects facts of the case and the issue of estimation of income was not subject matter of notice u/s. 148 of the Act. 4. That on the facts and circumstances of the case, the ld. CIT(A), NFAC erred in dismissing the assessee's grounds challenging rejection of books of accounts and estimation of the assessee's business profit at Rs. 14,23,761/-i.e. @5% of gross turnover of Rs. 2,84,75,214/- without considering the nature of appellant's business. 5. That on the facts and circumstances of the case, the ld. CIT(A), NFAC erred in not issuing direction to the Assessing Officer for dropping penalty proceedings initiated u/s. 270A/271B/272A(1)(d) of the Act. 6. The appellant craves to urge additional ground/grounds, substitute, alter or amend any of the ground of appeal either before or at the time of the hearing of this appeal including reliance on additional case laws.” 3. The brief facts of the case are that the assessee is an Association of Persons, engaged in the business of running a milk collection centre. The assessee had withdrawn cash amounting to Rs. 1,09,61,000/- and deposited a cash of Rs. 11,000/- in it’s bank account during the impugned year under consideration. The assessee did not file it’s return of income. During the course of assessment, the Assessing Officer noted that assessee had shown a sum of Rs. 2.77 crores as purchases and a sum of Rs. 2.84 crores as gross turnover. Further, the Assessing Officer observed that the credits reflected in the bank account were subsequently withdrawn by the assessee in cash. The assessee was requested to provide details of parties to whom cash payment has been made. However, the assessee did not furnish details of parties to whom payments have made in cash nor did the assessee furnish any evidence to substantiate the genuineness of the purchases shown in the Profit & Loss Account. The Assessing Officer noted that the assessee had also failed to get it’s books of accounts audited and therefore, the books of accounts were rejected by the Assessing Officer, since the assessee failed to furnish any supporting documents towards the purchases made. The assessee furnished ITA No. 2172/Ahd/2024 Bijrol Kheda Suchit Milk Collection Center vs. ITO Asst.Year –2018-19 - 3– party-wise details of various parties from whom purchases were made during the year under consideration and also furnished details of sundry creditors to substantiate the amount of purchases. However, the Assessing Officer noted that the assessee failed to provide the PAN of the parties, copies of bills / invoices towards purchase of milk and any further evidence to substantiate that expenses were in fact made by the assessee. Besides this, the assessee also failed to furnish any confirmation from the parties. The assessing Officer was of the view that mere submission of the details of parties does not substantiate the genuineness of the transaction unless the same is supported by bills / invoices / vouchers and also evidence of payment to such parties. Accordingly, the Assessing Officer proceeded to reject the books of accounts and estimated the income of the assessee at 5% of the turnover. 4. In appeal, Ld. CIT(A) dismissed the appeal of the assessee with the following observations: “The Books of Accounts do not have any independent existence, they are based on bills and vouchers. The copy of bills/invoices towards the purchase and also any evidences to substantiate the expenses made have not been submitted by the assessee. The assessee has not furnished any evidence to substantiate the genuineness of the purchases shown in the P&L account nor the other transactions in either assessment or appeal proceedings. The assessee had failed to get his books of account audited. Books of accounts were rightly rejected as the assessee failed to furnish any supporting documents towards the purchases made.” 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A), confirming the addition made by the Assessing Officer. Before us, a request of adjournment has been submitted, wherein no specific reason was furnished as to why the authorized representative of the assessee is unable to cause appearance before us. Accordingly, the request for adjournment filed by the assessee is rejected. On going through the facts of ITA No. 2172/Ahd/2024 Bijrol Kheda Suchit Milk Collection Center vs. ITO Asst.Year –2018-19 - 4– the instant case, we are of the considered view that interests of justice would be served if the profit estimated by the assessee is restricted to 2.5% of the gross turnover of the assessee. Accordingly, the profit of the assessee is directed to be estimated at 2.5% of the gross receipts of the assessee, in the interest of justice. 6. In the result, the appeal of the assessee is partly allowed. This Order is pronounced in the Open Court on 20/02/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 20/02/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 18.02.2025 2. Date on which the typed draft is placed before the Dictating Member 19.02.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 19.02.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 20.02.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 20.02.2025 7. Date on which the file goes to the Bench Clerk 20.02.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "