THE RAVIDASS BALIAYALA COOPERATIVE LABOUR CONSTRUCTION SOCIETY LIMITED,FATEHABAD V. INCOME TAX OFFICER, FATEHABAD

ITA 862/CHANDI/2024

AI Insights

The case involves The Ravidass Baliayala Coop. Labour Construction Society Ltd., a society registered under the Haryana Societies Registration Act, which appealed against the order of the learned Addl. / Joint Commissioner of Income Tax (Appeals)-12, Mumbai. The primary issue was the assessment of estimated income of Rs.28.30 Lacs for the Assessment Year 2017-18, as determined by the Assessing Officer under section 143(3) of the Income Tax Act. The Assessing Officer estimated the income based on a 6% profit rate on a turnover of Rs.471.77 Lacs, citing the unavailability of the assessee's books, which were reportedly burnt. The CIT(A) upheld this assessment, leading to the current appeal. The Tribunal found the estimation arbitrary and adjusted the profit rate to 2% to re-compute the income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633103 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Haryana Societies Registration Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: PRINCE GOYAL LD
• Section: 143(3)

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.862/CHANDI/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-18) The Ravidass Baliayala Coop. Labour Construction Society Ltd. Village Baliyala, Tohana, Haryana. बनाम/ Vs. ITO Ward-2 Fatehabad, ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.AACAT-3532-H (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Prince Goyal (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 03-06-2025 घोषणाकीतारीख /Date of Pronouncement : 09-06-2025. आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-12, Mumbai [CIT(A)] dated 19-01-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 24-12-2019. The sole grievance of the assessee is assessment of estimated income of Rs.28.30 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2 The registry has noted delay of 147 days in the appeal, which stands condoned. The assessee is a society duly registered under Haryana Societies Registration Act. The prime objective of the assessee society was to promote the interest of manual labour. 2. Upon perusal of assessment order, it could be seen that Ld. AO computed excessive contribution to provident fund for Rs.12.70 Lacs. The assessee declared profit @0.34% on turnover of Rs.471.77 Lacs which was held to be very low. The assessee stated that the books were not available and the same were burn-out. On these facts, Ld. AO estimated income of 6% against turnover of Rs.471.77 Lacs and assessed the income at Rs.28.30 Lacs. Since the income was so estimated, no adjustment of excess provident fund was made by Ld. AO. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. 3. It clearly emerges that the books of the assessee are not available and there is no other alternative but to estimate the income of the assessee. The Ld. AR has stated that the assessee reflected Net Profit (NP) rate of 0.48% in AY 2015-16 and NP rate of 0.43% in AY 2016-17. Therefore, the estimation of 6% is quite arbitrary and far from reality. We find that the declared rates could be accepted only if the assessee was able to substantiate the same. With a view to put an end to the litigation, we direct Ld. AO to estimate Net Profit Rate of 2% of the turnover and re-compute the income of the assessee. No other ground has been urged in the appeal. 3 4. The appeal stand partly allowed. Order pronounced on 09-06-2025. Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 09-06-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH "