The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)’s Order on charging the difference of the profit on gross turnover for the year as “Income from other sources”.
The assessee, M/s. Sheo Shakti Coke Industries is a partnership firm engaged in the business of running coke industries. The assessee is claiming deduction under section 80IC of the Act consistently. For the year under consideration, the assessee has claimed deduction u/s 80IC of the Act. E-return of income filed. The case was selected for scrutiny through CASS followed by serving notices u/s 143(3) and 142(1) of the Act.
During the course of assessment proceedings, the Ld. AO examined various details received from the assessee. The Ld. AO noted various anomalies in the financial transactions specially the genuineness of sales and transportation cost and also the purchases from related parties could not be verified. Ld. AO came to a conclusion that the profits shown by the assessee firm are not genuine and are fabricated and transactions are colourable. Ld. AO, accordingly, denied the deduction u/s 80IC of the Act and along with the other minor additions
The coram of Judicial Member, A.T.Varkey and Accountant Member, Manish Borad held that detailed enquiry conducted by the CIT(A), which remained uncontroverted by the ld. counsel for the assessee find no reason to interfere in the finding of CIT(A) applying the gross profit rate of 40% on the turnover disclosed by the assessee as against the gross profit rate of 57.01% disclosed by the assessee and accordingly has rightly charged the difference of the profit that is 17.01% on the gross turnover for the year as “Income from other sources”.
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