Calcutta High Court
Gng Exports vs Assistant Commissioner Of Income Tax on 6 May, 2025
Author: T.S Sivagnanam
Bench: T.S Sivagnanam
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OD - 8
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction [Income Tax]
ORIGINAL SIDE
ITAT/68/2025
IA NO: GA/1/2025
GNG EXPORTS
VS
ASSISTANT COMMISSIONER OF INCOME TAX
CIRCLE 33, KOLKATA
BEFORE :
THE HON'BLE CHIEF JUSTICE T.S SIVAGNANAM
And
THE HON'BLE JUSTICE CHAITALI CHATTERJEE (DAS)
Date : 6th May, 2025
Appearance :
Mr. Ramesh Kumar Patodia, Adv.
Ms. Megha Agarwal, Adv.
..for the appellant.
Mr. Prithu Dudhoria, Adv.
...for the respondent.
The Court : This appeal filed by the assessee under Section
260A of the Income Tax Act, 1961 (in short, the Act) is directed
against the order dated October 8, 2024 passed by the Income Tax
Appellate Tribunal, C-Bench, Kolkata (in short, the Tribunal) in
ITA/475/Kol/2024 for the assessment year 2013-14.
The assessee has raised the following substantial questions
of law for consideration :
“(a) Whether the Learned Income Tax Appellate Tribunal
erred in finding no infirmity in the action of the Ld.
2CIT(A) in confirming the estimated addition equal to 0.77
per cent of the total turnover of the appellant for the
assessment year 2013-14 even when the Ld. CIT(A) as well as
the learned Income Tax Appellate Tribunal rejected the
action of the assessing officer in rejecting the books of
accounts of the appellant on the basis of no response found
from some of the sundry creditors in response to notice
under section 133(6) of the Act?
(b) Whether the estimated addition equal to 0.77 per cent
of the total turnover of the appellant for the assessment
year 2013-14 can be sustained on the pretext that the same
was offered by the appellant even though when the same was
done under protest in view of erroneous rejection of books
of accounts which rejected was held to be not tenable in
law by the Ld. CIT(A) as well as the Learned Income Tax
Appellate Tribunal?
(c) Whether the non-compliance to notices under section
133(6) of the Act by some of the sundry creditors can be a
ground to make estimated addition equal to 0.77 per cent of
the total turnover of the appellant for the assessment year
2013-14?”
We have heard Mr. Ramesh Kumar Patodia, learned advocate
appearing for the appellant/assessee and Mr. Prithu Dudhoria,
learned senior standing counsel appearing for the
respondent/revenue.
The assessee preferred an appeal before the appellate
authority, namely, National Faceless Appeal Centre (NFAC)
challenging the assessment order passed under Section 143(3) of
the Act dated 4.3.2016 by which the assessing officer rejected
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the books of accounts of the assessee and computed the income of
the assessee by estimation method and fixed the same at 2% of
the contracted work. It is not in dispute that during the course
of assessment in reply to the notices issued under Section
133(6) the assessee referred to the net profit for three
financial years, namely, 2011-12, 2010-11 and 2009-10 and
computed the average at 0.77%. According to the assessee, this
offer was made under protest before the assessing officer. The
appellate authority considered the matter and held that the
rejection of the books of accounts by the assessing officer on
account of non-compliance of notices issued under Section 133(6)
on some of the sundry creditors and subsequent determination of
the income of the assessee at 2% of the contracted work is not
tenable and, accordingly, deleted the same. Further, the
appellate authority noted that the assesseee has in the
alternative admitted before the assessing officer during the
assessment proceedings of determination the net profit of the
current year on the basis of the earlier three years average,
which was computed at 0.77% of the total turn-over. This
percentage was accepted by the appellate authority and,
accordingly, the net profit for the assessment year under
consideration was fixed at 0.77% of the total turn-over and the
appeal stood partly allowed.
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Being dissatisfied with the said order, the assessee
preferred an appeal before the learned Tribunal which has been
dismissed.
The learned advocate for the appellant/assessee reiterated
the submissions made before the learned Tribunal and submitted
that the average net profit for the three financial years was
offered during the assessment proceedings under protest and that
should not have been the basis of the appellate authority to fix
the same. This submission does not merit consideration for
several reasons more particularly when there can be no such
offer made by the assessing officer under protest during the
course of the assessment proceedings. The contents of the reply
given by the assessee during the hearing on March 1, 2016 which
has been extracted by the learned Tribunal clearly shows that
the offer though stated to be under protest, the assessee has
made a calculation by computing the average of the net profit
for three financial years. Therefore, we are of the view that
the appellate authority was right in accepting the said
percentage as net profit for the assessment year under
consideration and we also find that the learned Tribunal rightly
affirmed the order passed by the appellate authority. Thus, we
find no question of law much less substantial questions of law
arising for consideration.
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Accordingly, the appeal fails and the same is dismissed.
The connected application stands closed.
(T.S SIVAGNANAM)
CHIEF JUSTICE
(CHAITALI CHATTERJEE (DAS), J.)
S.Das/
AR[CR]
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