Garg Ship Breaking Pvt. Ltd. vs The Dy. CIT, Circle 3(1)(1) Ahmedabad

Parties Involved

Facts Summary

The assessee, Garg Ship Breaking Pvt. Ltd., filed its income return on 05-11-2022 admitting a total income of Rs. 51,95,550/-. The case was selected for scrutiny due to the low income reported from receipts on which TCS was deducted and high liabilities in the balance sheet compared to the low income admitted. The Assessing Officer (AO) provided several opportunities for the appellant to respond, but due to the lack of proper response, AO rejected the books of accounts and estimated the income at 2% of the total turnover reported by the assessee. The assessee filed an appeal against the order passed by the Commissioner of Income Tax (Appeals), which was dismissed by the CIT(A). The assessee then filed this appeal against the order of the CIT(A).…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in law and on facts in passing the impugned order ex-parte and in confirming the assessment framed by the Assessing Officer.
• 2. Whether the Ld. CIT(A) erred in confirming the action of Ld. AO in passing the assessment order in gross violation of procedure prescribed under section 144B, rendering the assessment void/illegal and liable to be quashed.
• 3. Whether the Ld. CIT(A) erred in confirming the action of the Assessing Officer in rejecting the books of account.
• 4. Whether the Ld. CIT(A) erred in confirming the arbitrary estimation of income at 2% of turnover without bringing any comparable cases, past history, industry margins, or any rational basis on record.
• 5. Whether the Ld. CIT(A) erred in confirming the addition of 1,94,32,501/- made by adopting estimated income, despite the returned income and books of accounts being available.
• 6. Whether the Learned CIT(A) erred in law by failing to consider that the Ld. AO did not properly appreciate or consider various pieces of evidence and supporting documents available on record during the assessment proceedings.

Judgment Outcome

Decided in favour of Assessee.

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