R A AGRI PRODUCTS LTD,DELHI V. DCIT, CENTRAL CIRCLE-II, FARIDABAD

ITA 1301/DEL/2023

AI Insights

The case involves R. A. Agri Products Ltd., which appealed against the consolidated order of the Commissioner of Income Tax (Appeals) - 3, Gurgaon, concerning the assessment years 2008-09 to 2014-15. The appeals were based on the additions made by the AO, which were confirmed by the CIT(A), on account of estimated Gross Profit (G.P.) rates declared on turnover. The AO had rejected the books of accounts and adopted a gross profits margin based on allegedly non-genuine purchases/sales. The Tribunal considered the consistent decisions of Co-ordinate Benches in similar cases and reversed the additions made by the AO, setting aside the CIT(A)'s order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126196 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Other Referred Cases: Shri Kamal Sharma vs DCIT, Sunil Garg vs DCIT, Star International vs DCIT, Kamal Sharma vs DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANU KRISHNA AGGARWAL
• Assessee Lawyers: DEEPAK UPADHYAY; AMIT RAI
• Keywords: Set aside; Rejection of books of accounts; Commissioner; Commissioner of Income Tax; Identical facts; Purchases; 153C; 153A; AY 2010-11; AY 2011-12
• Section: 147; 143(3); 153A; 153C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “F” BENCH: NEW DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA Nos.1298,1299,1300,1301, 1302,1303 & 1304/Del/2023 [Assessment Years : 2008-09 to 2014-15] R. A. Agri Products Ltd. 4119/7, First Floor Naya Bazar, New Delhi-110006 PAN-AAIFR5672D vs DCIT Central Circle-II Faridabad APPELLANT RESPONDENT Appellant by Shri Deepak Upadhyay, CA & Shri Amit Rai, CA Respondent by Ms. Anu Krishna Aggarwal, CIT DR Date of Hearing 09.04.2025 Date of Pronouncement 23.04.2025 ORDER PER BENCH : The captioned appeals have been filed at the instance of the assessee against the common and consolidated order dated 27.02.2023 passed by passed by Commissioner of Income Tax (A)-3, Gurgaon [“CIT(A)”] concerning Assessment Years 2008-09 to 2014-15 respectively arising from the respective assessment orders passed by the AO tabulated hereunder:- Sr. Nos. ITA Nos. CIT(A) Order dated Assessment Order dated Assessment Order passed under section 1. 1298/Del/2023 [AY 2008-09] CIT(A)-3, Gurgaon order dated 27.02.2023 30.03.2016 153A(1)(b) r.w.s. 143(3) of the Income Tax Act, 1961 2. 1299/Del/2023 [AY 2009-10] -Do- -Do- -Do- 3. 1300/Del/2023 [AY 2010-11] -Do- -Do- -Do- 4. 1301/Del/2023 [AY 2011-12] -Do- -Do- -Do- 5. 1302/Del/2023 [AY 2012-13] -Do- -Do- -Do- 6. 1303/Del/2023 [AY 2013-14] -Do- -Do- -Do- 7. 1304/Del/2023 [AY 2014-15] -Do- -Do- 143(3) of the Income Tax Act, 1961 ITA Nos.1298 to 1304/Del/2023 Page | 2 2. As per the respective assessment orders as confirmed by the CIT(A), the additions have been made by the AO on account of estimated Gross Profit (“G.P”) as under:- Assessment Year Addition made by the AO (G.P. rate declared by the assessee on turnover declared by the assessee) 2008-09 INR 1,75,27,932/- 2009-10 INR 2,87,17,822/- 2010-11 INR 95,99,566/- 2011-12 INR 57,92,504/- 2012-13 INR 78.54,870/- 2013-14 INR 39,18,428/- 2014-15 INR 55,93,794/- 3. Aggrieved by the first appellate order and the assessment order, the assessee is in appeal before the Tribunal. 4. When the matter was called for hearing, the Ld. Counsel for the assessee adverted to the assessment order, first appellate order, financial statement etc. prepared by the assessee for the respective FYs and submitted that [i] the AO has, in identically worded assessment orders, observed in para 3.1 of the assessment order that basis to arrive at a conclusion towards existence of incriminating material is the seized material found at the business premises of other entity namely, M/s. Sunstar Overseas Ltd. (“SSOL”) giving rise to conclusion that certain entities including that of assessee company are paper concerns of SSOL to manipulate purchases etc. What was found concerning the assessee was paper showing salary and bonus paid by the assessee and audit fee. These payments have been made through the bank account of the assessee in ordinary course and therefore, there is nothing incriminating in it. [ii] Besides, the so-called incriminating documents found at the premises of the other person, can at best give rise to proceedings under s. 153C or 147 of the Act. The assessment carried out under s. 153A based on incriminating material found in the premises of the other concerns does not give rise to jurisdiction under s. 153A of the Act; ITA Nos.1298 to 1304/Del/2023 Page | 3 [iii] having rejected the books of accounts as well as purchase and sales declared by the assessee, the AO has adopted the gross profits margin declared by the assessee based on such allegedly non-genuine purchase/sales declared in the books. As self-evident, the book results have been accepted upto the stage of determination of gross profits after rejecting the books. The action of the AO is thus, apparently inchoate and inconsistent to the rejection of the books itself. The AO has computed estimated profits based in trading account which was rejected as unreliable showing mutually contradictory positions taken. Secondly, such action has resulted in double taxation inasmuch as, based on the book results the assessee has already declared the taxable income which was further enhanced on account of G.P. additions made which was already forming part of the book results; [iv] Significantly, identical G.P additions made in other concerns of M/s. Sunstar Group of cases in identical facts and flowing from similarly worded assessment orders culminated in appeal before the Tribunal. The Co-ordinate Bench of Tribunal in identical facts has adjudicated the issue in favour of group concerns namely (a) Shri Kamal Sharma vs DCIT in ITA Nos. 3400 & 3402/Del/2023 vide order dated 24.10.2024; (b) Sunil Garg vs DCIT in ITA No.1212/Del/2023 & others vide order dated 16.01.2025; (c) Star International vs DCIT in ITA No.1293/Del/2023 & others vide order dated 10.01.2025; and (d) Kamal Sharma vs DCIT in ITA No.1219/Del/2023 & others vide order dated 10.12.2024. 5. The Ld. Counsel for the assessee thus submitted that in the light of judgements consistently rendered in the case of group concerns on identical facts by the Co-ordinate Benches in favour of the assessee, there is no warrant to entertain a different view in the present appeal. Based on other decisions of Co-ordinate Benches, the protracted litigation must come to an end and relief needs to be given from such wrongful additions inconsonance with other judgements. ITA Nos.1298 to 1304/Del/2023 Page | 4 6. The Ld.CIT DR for the Revenue, on the other hand, relied upon the first appellate order and submitted that the documents showing salary payments and audit fee payments managed by the SSOL glaringly show that these concerns are paper concerns and therefore, the assessee is not eligible for any deduction of expenses and the additions made applying the gross profits margin should not be disturbed. 7. We have carefully considered the rival submissions. The controversy raised as narrated in the preceding paragraphs is no longer res integra. The Co-ordinate Bench of Tribunal, in identical facts, have consistently adjudicated the issue in favour of the respective assessee of the group concerns as pointed out on behalf of the assessee in para 4(supra) by taking holistic view of the matter. In identical facts, we thus see no reason to depart therefrom. In consonance with the view expressed by the Co-ordinate Benches as noted in preceding paragraphs, we are inclined to set aside the order of the CIT(A) and reverse the additions made by the AO in the respective assessment years. 8. In the combined result, the captioned appeals of the assessee are allowed. Order pronounced in the open Court on 23rd April, 2025. Sd/- Sd/- (VIMAL KUMAR) JUDICIAL MEMBER (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER *Amit Kumar, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "