KEDARNATH INDUSTRIES,DEHRADUN V. INCOME TAX OFFICER WARD-1(1)(5), DEHRADUN

ITA 30/DDN/2024

AI Insights

Kedarnath Industries appealed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which upheld the additions made by the A.O. in the assessment for the year 2017-18. The A.O. had made additions of Rs. 3,23,50,000 as unexplained cash deposit under section 69A and Rs. 56,12,871 by estimating the profit at 6.22% of turnover. The Assessee contested the rejection of their books of account, arguing that they maintained proper records which were not adequately considered by the A.O. and the CIT(A). The Tribunal found merit in the Assessee's arguments regarding the rejection of the books of account without proper opportunity to present all documents, leading to the decision to remit the case back to the A.O.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830845 (ITAT-DEHRADUN)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 09-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A. S. RANA
• Assessee Lawyers: SHIVAM MALIK
• Keywords: Opportunity of being heard; Rejection of books of accounts
• Section: 143(3)

Judgement Text

"1 ITA No. 30/DDN/2024 Kedarnath Industries Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, DEHRADUN BEFORE SH. YOGESH KUMAR U.S., JUDICIAL MEMBER & SH. MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 30/DDN/2024 :Asstt. Year : 2017-18 Kedarnath Industries House No. 1, 1st Floor, Sarrafa Bazar, Dhamawala, Dehradun Uttarakhand PAN: AALFK6129M Vs Income Tax Officer, Ward-1(1)(5) Dehradun, Uttarakhand Appellant Respondent Assessee by Sh. Shivam Malik, Adv Revenue by Sh. A. S. Rana, Sr. DR Date of Hearing 08/12/2025 Date of Pronouncement 23/01/2026 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, (‘Ld. CIT(A)/NFAC’ for short), dated 13/02/2024 pertaining to Assessment Year 2017-18. 2. Brief facts of the case are that, the Assessee filed return of income, which was selected for scrutiny through CASS. An assessment order came to be passed on 31/12/2019 u/s 143(3) of the Income Tax Act, 1961 ('Act' for short) by making addition of Rs. 3,23,50,000/- u/s 69A of the Act r.w. Section 115BBE and also made addition of Rs. 56,12,871/- by estimating the profit by considering the net profit @ 6.22%. Aggrieved by the assessment order dated 31/12/2019, Assessee preferred an Appeal before the Ld. CIT(A). The Printed from counselvise.com 2 ITA No. 30/DDN/2024 Kedarnath Industries Vs. ITO Ld. CIT(A) vide order dated 13/02/2024, dismissed the Appeal filed by the Assessee. Aggrieved by the order of the Ld. CIT(A) dated 13/02/2024, Assessee preferred the present Appeal. 3. The grievance of the Assessee in the present Appeal is against making/upholding the addition of Rs. 3,23,50,000/- on account of unexplained cash deposit u/s 69A of the Act and estimated profit of current year ofRs. 56,12,871/- by considering the net profit of the appellant @6.22% of turnover by considering the historical NP data of the Assessee. 4. The Ld. Counsel for the Assessee vehemently submitted that the reasons for rejecting the books of account that the Assessee has not maintained the proper stock register, sales were not genuine and also for not maintaining thesalary register, however, the Ld. CIT(A) failed to appreciate the fact that the Assessee has indeed maintainingproper stock registers and also salary register and the A.O. without giving proper opportunity to the Assessee to produce the salary register, held that the Assessee is not maintaining the proper salary register and rejected the books of accounts which resulted in making the impugned addition. Thus, submitted that the A.O. committed error in making the additions which have been erroneously upheld by the Ld. CIT(A). Printed from counselvise.com 3 ITA No. 30/DDN/2024 Kedarnath Industries Vs. ITO 5. Per contra, the Ld. Departmental Representative submitted that the reasons for rejecting the books of accounts of the Assessee were valid and A.O. after going through the material available on record, rightlyrejected the books of accounts and thereafter made the additions, which have been sustained by the Ld. CIT(A), therefore, the order impugned required no interference at the hands of the Tribunal. Further, the Ld. Department's Representative relying on the findings and the conclusion of the orders of the Lower Authorities, sought for dismissal of the appeal of the Assessee. 6. We have heard both the parties and perused the material available on record. It is the specific case of the Assessee that the A.O. committed error in rejecting the books of account, wherein Assessee has filed all the documentary evidence including cash books purchases and sale register, stock register etc. and the turnover has been duly disclosed in the VAT return which has also been accepted by the concerned Departments. Further contended that there is no prescribed format to maintain the stock register and the A.O. recorded incorrect facts and without providing proper opportunity to the Assessee to provide the salary register, rejected the books of accounts. Further, it is contended that on behalf of the Assessee that the Ld. CIT(A) has altered the provision which is contrary to the settled position of law. Printed from counselvise.com 4 ITA No. 30/DDN/2024 Kedarnath Industries Vs. ITO 7. Considering the fact that the authorities have not considered the documents provided by the Assessee and without giving opportunity to produce the salary register and other documents, the books of the Assessee has been claimed to have been rejected, we are of the opinion that if the issue is restored to the A.O. for de-novo adjudication substantial justice would be rendered. In so far as, the contention of altering/mentioning the wrong provision while making the addition is concerned, we are of the opinion that non-mentioning of the provision or mentioning wrong provision will not be fetal to the addition made by the A.O.In view of the above, the matter is remitted to the file of the A.O. with a liberty to the Assessee to produce all the documents and A.O. shall consider the documents produced by the Assessee and shall frame the fresh assessment in accordance with law. Needless to say, the Assessee shall be provided with opportunity of being heard. 8. In the result, appeal of the Assessee is partly allowed for statistical purposes. Order pronounced in the open court on 23rd January, 2025. Sd/- Sd/- (MANISH AGARWAL) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 23 .01.2026 R.N, Sr.P.S* Printed from counselvise.com 5 ITA No. 30/DDN/2024 Kedarnath Industries Vs. ITO Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "