KALPATARU HOUSE FIN & TRADING PRIVATE LIMITED,KOLKATA V. DCIT, CENTRAL CIRCLE 1(1), , KOLKATA

ITSSA 64/KOL/2025

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The case involves Kalpataru House Fin & Trading Private Limited, which appealed against the orders of the Commissioner of Income-tax (Appeals), Kolkata, concerning the assessment years 2013-14 to 2019-20. The primary issue was the profit rate applied on unrecorded sales discovered during a search operation under section 132(1) of the Income Tax Act. The assessee had initially disclosed a 5% profit on these sales, which was contested by the Assessing Officer who applied an 8% rate, later reduced to 5.5% by the CIT(A). The Tribunal, after considering the submissions and precedents, reinstated the 5% profit rate as declared by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712281 (ITAT-KOLKATA)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: Prakash Rameshbhai Nanda Hasmukh Kunj vs ITO, DCIT vs Ajay Vishandas Kamnani, M/s Swarna Kalash Commercial Pvt. Ltd. vs ACIT, M/s Ashtvinayak Sales Pvt. Ltd. vs ACIT, CC-2(2), Kolkata
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.N. BARNWAL
• Assessee Lawyers: AKKAL DUDHWEWALA; VIDHI LADIA; ARS
• Section: 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM IT(SS)A Nos.61 to 67/KOL/2025 (Assessment Years: 2013-14 to 2019-20) Kalpataru House Fin & Trading Private Limited 29, Ganesh Chandra Avenue Dalhousie, 1st Floor, Kolkata-700013, West Bengal Vs. DCIT, Central Circle 1(1), 110, Shantipally, E.M. Bypass, Aaykar Bhavan, Kolkata-700107, West Bengal (Appellant) (Respondent) PAN No. AABCK2172R Assessee by : Shri AkkalDudhwewala& Ms. Vidhi Ladia, ARs Revenue by : Shri P.N. Barnwal, DR Date of hearing: 23.07.2025 Date of pronouncement: 29.07.2025 O R D E R Per Rajesh Kumar, AM: These are appeals preferred by the assessee against the orders of the ld. Commissioner of Income-tax (Appeals), Kolkata-20 (hereinafter referred to as the “Ld. CIT(A)”] dated 29.03.2025, 28.03.2025for the AYs 2013-14 to 2019-20. As the facts and circumstances are similar in all the appeals, hence, we will take ITA no.61/KOL/2025 as lead case and decide the issue accordingly. 02. The issue raised in ground no.1 is not pressed at the time of hearing and accordingly, the same is dismissed as not pressed. 03. The issue raised in ground No.2 is against the order of ld. CIT (A) applying the profit element of 5.5% on the unaccounted sales which was excessive and ought to have restricted to 5%. 04. The facts in all the appeals are that a search action u/s 132(1) of the Act was carried out on the assessee on 17.01.2019 and subsequent Printed from counselvise.com Page | 2 IT(SS)A No. 61 to 67/KOL/2025 Kalpataru House Fin & Trading Private Limited; A.Y. 2013-14 to 2019-20 dates as well as in ‘Shyam Sel Group’ of cases. Besides survey u/s 133A was also conducted on the different business premises of the group. During the course of search action various incriminating materials were found from the premises of M/s Shyam Sel Power Limited, M/s Shyam Metalics Pvt. Ltd., M/s Salagram Power and Steel Pvt. ltd. The ld. AO on examination of the said documents observed that the certain transactions were not recorded in the books of account. The assessee also admitted that it had made trading/sales which were not recorded in the books of account and accordingly, disclosure of income was made by offering the income /profit @ rate of 5% on the total turnover/ sales/ payment receipts. The ld. AO as against the said disclosure estimated the income of the assessee at the rate of 8% of the total unrecorded sales/ trading not recordedin the books of accounts and accordingly, added to the income of the assessee. 05. In the appellate proceedings, the ld. CIT (A) after taking into consideration the submission and evidences filed by the assessee restricted the profit at the rate of 5.5% of the suppressed turnover and thus partly allowed these appeals. The ld. AR vehemently submitted before us that the profit estimated by the ld. CIT (A) is excessive and unreasonable. The ld. AR submitted that the assessee has already offered/ disclosed during search more than the reasonable profit of 5% on the said unrecorded sales and therefore, the action of the ld. CIT (A) applying the profit rate of 5.5% is without any basis and therefore, may kindly be reduced to 5%. In defense of his argument the ld. AR relied on the decisions as under:- Prakash Rameshbhai Nanda Hasmukh Kunj vs ITO [ITA Nos. 13-16/Raj/2018] DCIT vs Ajay VishandasKamnani [ITA No. 88/Nag/2023] Printed from counselvise.com Page | 3 IT(SS)A No. 61 to 67/KOL/2025 Kalpataru House Fin & Trading Private Limited; A.Y. 2013-14 to 2019-20 M/s Swarna Kalash Commercial Pvt. Ltd. vs ACIT [I.T.(SS)A. No.53/Kol/2022] M/s Ashtvinayak Sales Pvt. Ltd. vs ACIT, CC-2(2), Kolkata [IT(SS)A No.54/Kol/2022]” 06. In all the above decisions, the profit has been estimated at the rate of 5%. The ld. AR therefore prayed that the order of ld. CIT (A) may be modified accordingly by allowing the appeals of the assessee. 07. The ld. DR on the other hand heavily relied on the decisions of the ld. lower authorities. 08. After hearing the rival contentions and perusing the materials available on record and also the decisions cited before us, we find that the assessee has declared 5% profit on the unrecorded sales. In the assessment proceedings, the ld. AO estimated 8%, which was restricted to 5.5% by the ld. CIT (A) for which we do not find any substantive basis. Therefore, we are inclined to accept the contention of the assessee that suo moto profit disclosed by the assessee during the search proceedings is reasonable. The case of the assessee also filed support from the various decisions cited above in which the co- ordinate benches of this Tribunal has applied 5% on the unrecorded sales. Consequently, we are inclined to modify the order of the ld. CIT (A) and direct the ld. AO to accept the profit at the rate of 5% as declared by the assessee. 09. In the result, all the appeals of the assessee are allowed. Order pronounced in the open court on 29.07.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 29.07.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 4 IT(SS)A No. 61 to 67/KOL/2025 Kalpataru House Fin & Trading Private Limited; A.Y. 2013-14 to 2019-20 Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "